meritocracy

Some Reflections on Liberal Democracy, Political Meritocracy, and Critical Rationalism

Federico Sosa Valle Politics , , , , , , , , ,

We live in times in which the liberal democracy is challenged by a sort of political meritocracy according to which a performance legitimacy — i.e., the utility that government management brings to the population – would be more important than the legitimacy of origin, based on the consent of the sovereign people. Thus, economic growth and its beneficial consequences for the governed are presented as substitutes for liberal values, which often also encounters difficulties in its governance. The next step would be to replace liberal democracy with a single-party meritocracy, legitimized in its ability to efficiently provide public goods to its population. In this context, is Contractualist Rationalism still a sufficient foundation for liberal democracy? We will seek to respond to this query with the answer to another question, related to the previous one: What position would the so-called anti-Contractualists or anti-Rationalist assume in the current context?

Both for David Hume and later for Edmund Burke, political power lacks legitimacy of origin. They stated that every government is born either by conquest or by usurpation, since for a social contract to even be conceived, it must be preceded by a system of legal norms in which to fit. Therefore, if there is a political obligation on the part of the governed, it has its source in the legitimacy of exercise that, day after day, the rulers gain. However, such source of legitimacy does not come exclusively from the force with which governments impose compliance with their laws, but in the common interest of the rulers and the ruled to maintain the validity of certain norms of coexistence or justice, whose discovery is born of the practice of interactions between different individuals, its fulfillment generates a long-term benefit for society and its application begets concern for the aforementioned common interest among all members of the social and political body.

Norms and human nature

David Hume distinguished, for this, between natural and artificial virtues, belonging those norms of justice to this last category, since the man in himself would not have a natural propensity to comply with them, but they depend on a critical reasoning capable of being able to see the convenience of the universalization of such standards. For this reason, the Scottish philosopher proposed a model of an agent who behaved in accordance with a principle of limited generosity: he was not exclusively selfish, but rather had an empathetic capacity capable of putting himself in the place of his fellow man. In turn, he was not entirely rational, but that same empathy moved him to act according to his passions, such as to prefer his own kind to strangers. Continuous interactions with other human beings following this behavioral model of limited generosity allowed the social fabric to be endowed with certain structuring regularities, by virtue of the habit born from the repetition of actions inspired by said principle of limited generosity -and the consequent expectations regarding the behavior of own and others arising from the aforementioned habits of conduct.

This plexus of habits and expectations allows agents to make decisions based on a given structure of human interactions that can be identified through a standard of expected behavior, distinguishing what should be from what is not expected to be. Such rules of conduct are called by David Hume as “of justice” and their compliance habit configures “artificial virtues,” since on certain occasions they may conflict with the natural virtues concerning the principles of limited generosity that make the agent prefer his own kind to the others.

In this way, David Hume stated that human interactions form a social structure that is built upon notions of justice that he identified as those of stability in possession, its peaceful transmission and the fulfillment of the promises. These consist of social institutions that arise spontaneously from human interaction and that, because on certain occasions they may conflict with private interests, are not universally accepted spontaneously, but rather, on the contrary, need the support of force for their fulfillment. It is by providing such enforced compliance with the norms of justice that governments gain their legitimacy of exercise.

Although, as we said, the observance of these practices and institutions constitutes a particular interest shared by all members of society, since they all share the natural virtues of looking after the interests of their own group and this is what make them peacefully prosper. Nevertheless, it would be useful to illustrate those instances in which the passions that make up the natural virtues conflict with the rules that maintain such a peaceful order of coexistence and exchange: such is the case, for example, of compliance with the promises.

If a person hires another for the manufacture of a certain work that will take a certain time to complete, pays him an advance on account of the payment of the total price at the end of the work, both will be faced with possible conflicts of interest when fulfilling their respective promises. Once the contractor receives the advance of the price, he will be faced with the dilemma of complying with the execution of the work and bringing it to completion or assuming the opportunistic behavior of allocating such a sum of money for another more desired interest: to buy toys to their children, for example. Suppose that the contractor complies with his commitment and delivers the work to his client in a timely manner. In this case, the latter will be faced with the dilemma of honoring his commitment and paying the balance of the price, receiving the work, or allocating that money to a more urgent and priority need at the moment, such as helping his parents to raise a debt. If social organization were structured exclusively around natural virtues, Hume reasoned, the fulfillment of promises would be highly unlikely. Thus, artificial virtues are born, such as justice.

The role of government, in Hume’s view, is to give mandatory force to the spontaneous norms of justice -such as the aforementioned stability in possession, the peaceful transmission of said possession and the fulfillment of promises- through the establishment of sanctions and compensations that discourage non-compliance. Thus, if the contractor in our example chooses to allocate the money from the advance of the work for which he had been hired to buy toys for his children – since, naturally, the happiness of his children is above the happiness of his client -, then he should pay his counterpart a compensation for damages that will far exceed the value of the said toys. In this way, the happiness of the children of the contractor will be better guarded if he fulfills his commitments. Correlatively, if at the end of the work the contractor hands it over to his client and the latter refuses to pay the balance of the price, given that he prefers to allocate the said amount of money to pay a debt from his parents, then he will have to face a compensation that probably would exceed the value of the debts, so the debtor in this case will have a strong incentive to fulfill his part of the contract.

However, there are cases in which the breach of a promise is still advantageous even when opportunistic conduct is threatened with the payment of its compensation. In those cases, the need to be met is so urgent that its value exceeds the standard set by the positive law for breach of contract. These are the cases in which the contractor in our example no longer must buy toys, but rather food or medicine for his children, or in which the parents of the buyer of the work will have to put their house up for auction if their son does not help them in due time. In both cases, what we have is a general and abstract rule: in the case of a breach of contract, the debtor owes the payment of principal and an interest rate. On certain occasions, it will be convenient for the debtor to make the payment, on others, to face the costs of the breach.

Every system of abstract norms is articulated around standards of conduct in accordance to which the agents make decisions that will have to be rational from an ecological point of view. For example: in American law system of torts, the Rule of Hand (in honor of Judge Learned Hand) establishes that a person, in order to avert a certain risk, cannot be asked to incur in costs greater than the value of the said risk (that is, the value of the protected asset multiplied by the probability that the loss will occur.) Thus, if to avoid losing an asset with a value of $1,000 and whose probability of the loss occurring is 1%, it is unjustifiable because it is unreasonable to require its guardian to incur costs greater than $10. Likewise, in this case, personal utility and social utility coincide, since higher expenditures would mean a decrease in aggregate wealth. Correlatively, in the legal world linked to the European Continental tradition, heir to Roman law, there are expected standards of conduct such as those of a good businessman and a good family man, which establish the upper and lower limits of the duty of care.

In all cases, the person who makes the final decision about whether or not to carry out a certain action and face the consequences, natural and legal, is the individual. Empathy towards someone who is considered as one’s own works as a natural limiting factor for action, as well as rules of courtesy and moral guidelines. They all act as empirical institutions. When these are insufficient for the purpose of maintaining a stable structure of peaceful exchanges, positive legal norms become relevant, establishing mechanisms of patrimonial compensation and repressive sanctions that have a dissuasive purpose with respect to a certain range of actions. However, a liberal legal system will never prevent the commission of certain actions, but will limit itself to discouraging them and, if carried out, to compensate them. In this way, each individual will have to decide their course of action according to their particular circumstances of time and place, refraining in some cases from carrying out certain actions and, in others, carrying them out knowing that their omission is more disadvantageous than the compensation or threatened sanction.

Suppose a man wants to avenge the outrage and murder perpetrated against a daughter of his, who went unpunished due to difficulties in the evidence. The state cannot apply repressive sanctions against the suspect of the crime because he has procedural guarantees that are inviolable. However, nothing prevents the offended party from choosing to take revenge at the price of being criminally sanctioned. We can assume that the suspect of the crime achieves an interdiction against whoever is chasing him, prohibiting him from approaching him within a certain radius of meters. However, the vigilante will have to prefer to violate such a prohibition and kill the person who, according to his particular conviction, is the author of the crime against his daughter. In this last case, there is no room for doubt: the avenger is the author of the homicide against the suspect of the previous crime. The avenger ends up sentenced to serve some years in prison, plus the payment of a fine for having violated the interdiction and the payment of compensation to the relatives of his victim. Well then, the criminal being convinced of the justice of his decision, that conviction will seem like a convenient price to pay in order to avenge the outrage followed by the murder against his daughter.

Such a case does not represent a failure of the legal system as an incentive structure for decision-making. On the contrary, it is a typical case of how such a system works. Compensation and repressive sanctions are prices that structure a certain ecological rationality, since under a certain matrix of compensation and sanctions one decision will be rational, while it will not be under another. If, for example, simple homicide is punished with a sentence of deprivation of liberty from eight to fifteen years, which can be extended to twenty-five years for cases of aggravated homicide, then certain actions will be irrational and others will remain reasonable. It is unreasonable to risk receiving such a penalty in the face of a verbal insult and, as we have already seen, there are other circumstances in which an individual is willing to assume not only the risk but also the certainty of being punished.

As a result of this system of incentives represented by the norms of justice, the final distribution of resources will correspond to a greater social utility, even in cases of violation of the aforementioned norms of justice, since no one will be forced to sacrifice resources inefficiently, above its opportunity cost. In this way, we see how David Hume offers us a sort of pre-utilitarian foundation for the norms of justice. However, this utilitarian-like notion also makes it possible to comply with an ethical requirement: for the purposes of complying with the rules of justice, no one is taken as a mere means, since compliance with them must provide some type of utility for each subject and, in otherwise, he is free to break the law and voluntarily face the consequences of such non-compliance, which he judges more advantageous than obeying the law itself.

The antagonism of interests between rulers and ruled

However, although a legal-political system understood in this way preserves its morality – since it encourages each individual to act contributing to the general welfare without losing sight of the fact that each individual is an end in himself -, its raison d’etre is not in the immediate interest of each agent in general, but in the immediate interest of a particular agent, who has interests diametrically opposed to the generality of the rest of the agents: the ruler. This does not pursue the protection of the general interest in the long term by enjoying a special moral predisposition, but by the particular interest of increasing its tax collection by increasing general wealth. The ruler who has a long-run horizon does not find it convenient to consume capital, but rather to increase it. Consequently, the government -being understood as the state– is directly interested in enforcing the rules of justice, although this often implies contradicting the direct and short-term interests of the governed.

Of course, David Hume also admits that, under exceptional circumstances, it would also be convenient in the long-run to temporarily suspend the rules of justice. This would be the case, for example, of a foreign exchange or bank run, in which, respectively, the foreign exchange market is suspended or the return of deposits is rescheduled. Both a devaluation of the currency and a rescheduling of bank deposits mean a disappointment to the legitimate expectations of holders of local currency or depositors, but a bankruptcy of the currency board, the national treasury or the banking system would cause greater damage -for both the ruler and the ruled.

But, removing those exceptional cases, the general rule is that the interests of the government are the opposite complement of the interests of the governed. While the former maximizes the utility of its resources by promoting the norms of justice, the latter do so by assuming opportunistic behavior – it is worth remembering here the well-known phrase by John Maynard Keynes, insofar as “in the long run, all we are dead”. However, the long term arrives and the societies that have a high level of enforcement of the rules of justice experience higher capitalization indices than the societies do not. It remains, of course, to see who appropriates such a surplus, if everything belongs to the ruler, or if the ruled can capture some of the surplus wealth generated by the effective enforcement of the rules of justice.

In this aspect, the classic forms of government are of particular incidence: a monarchy will have the advantage of having a greater incentive to enforce the rules of justice, which in the long run increase and deepen the structure of capital and, consequently, the tax collection. At the other pole, direct democracies would tend to find numerous exceptions to the rules of justice, rendering them completely ineffective. A mixed form of government, such as a constitutional monarchy in which the king is the head of state and the leader of parliament the head of government, would balance the interests of the rulers and the ruled. Those who are interested in increasing tax collection and those who seek to reduce it. The best way to reconcile both interests would be to encourage the formation of capital through the reassurance of the rules of justice: stability in possession, the peaceful transmission of it and the fulfillment of promises. In this way, governments legitimize themselves through the exercise of power aimed at ensuring compliance with a spontaneous regulatory system, which works at the same time as a system of incentives. In this line of argument, we can find the previously named Edmund Burke and Benjamin Constant.

Not in vain are the national states the natural heirs of the absolutist monarchies. The state is an institution -or a fiction, as Quentin Skinner points out- with a vocation for permanence and perpetuity. For the state, there is no short-term calculation, although it does find -in return- opportunistic behavior by officials and magistrates. When a simple individual acts in a way contrary to the law, he assumes the risk of being discovered by the state, which watches over the long-term interest. However, when this same individual manages state assets, his willful conduct has more devices to go unpunished. Therefore, we find in all systems a special responsibility of state administrators and other officials. But, above all things, we find ourselves with a system of checks and balances, of officialdom against opposition based not on virtue, but most of the time on the desire and competition to seize power and displace under any pretext the competitors. Modern liberal democracy means not only an abstract legal system for the governed, but also a set of abstract rules and anonymous procedures that encourage competition between different aspirants to political power.

The problem of the legitimacy of power

David Hume’s empiricism allows us to conceive how the legitimacy of the government does not come from its conditions of origin but from the exercise of power for the profit of the rulers and of the ruled. Furthermore, the norms of justice are regarded as desirable or good because compliance with them increases wealth and guarantees an equitable distribution of the said income between the rulers and the ruled. However, there is no a priori content of such norms of justice, but it emerges from the nature of things and only after a critical study of such circumstances can we infer the enunciation of the abstract norms and patterns that compose it. Furthermore, the abstract normative system that precedes governments and legitimizes them through their exercise is also made up of empirical norms that are not enunciated or are impossible to enunciate -as Friedrich Hayek noted in his work “Law, Legislation and Liberty“. It is worth saying that the spontaneous normative order that we call under the category of “norms of justice” does not depend on a positive enunciation but on its observance in the facts. It is through the positivization of certain principles of justice that governments, lacking in themselves any legitimacy of origin, acquire legitimacy of exercise.

Denying that every government has legitimacy of origin implies denying that there is a moral obligation to obey positive law whatever its content. Positive law is accompanied by a moral obligation to be obeyed when its purpose is to give binding force to spontaneous norms of justice, which contribute to the general well-being of the members of society. However, this does not mean that each individual has the competence to decide for himself if a positive legal norm has moral legitimacy to be followed, but rather that this depends on a critical judgment that is made taking into account not only the particular interest of a given subject, but the general interest of the whole society. To be valid, the particular judgment of each individual regarding the legitimacy of a positive norm must meet a necessary but not sufficient requirement of impartiality -and, thus, universality.

At this point, then, it is appropriate to ask how the rulers can identify those norms of justice from others that have only the appearance of being so but actually only respond to a particular interest. It is in this instance that the characteristic of spontaneous, tacit, or express compliance with the norms that make up a spontaneous order takes on special importance. This is because, if there is a given order, in which individuals interact, form expectations around the actions and decisions of their peers and coordinate individual plans among themselves, the observed empirical norms at least fulfill the task of maintaining stable, albeit in a precarious and provisional way, the said order. Furthermore, our own personal constitution, as subjects who recognize themselves as identical to themselves over time, depends largely on a stable order of events from our environment. As Friedrich Hayek explained at the time, what we call spontaneous order can also be characterized as the structure of reality in its aspect concerning human interactions, both instantaneous and sustained over time.

In conclusion, the line of the so-called anti-Contractualists or Empiricist could in no way be affiliated with the current critique of liberal democracy by surrogate candidates, such as a single-party meritocracy, which is efficient in promoting the economic growth for the population, at the cost of their political rights and the subjugation of certain human rights, such as freedom of expression or the right of assembly. On the contrary, the way in which governments legitimize themselves, regardless of the legitimacy of their origin, is to give mandatory force to a set of norms and values that concern fundamental or natural rights and political freedoms.

Some Monday Links

Michalis Trepas Links , , , , , , ,

The ‘Adam Smith of the North’: Meet Finland’s Founding Father of Classical Liberalism (FEE)

On Anders Chydenius. The Governor of Bank of Finland in a 2019 speech outlined his work, to stress the “joint Nordic and American societal heritage, which is fundamentally linked to economic liberalism and the market economy”.

The Fall Of The Meritocracy (The American Conservative)

The Communist Manifesto Shows Why Capitalism Won’t Last Forever (Jacobin)

Why Braveheart Is Considered One Of The Most Historically Inaccurate Films Ever (SlashFilm)

Nightcap

Brandon Christensen Links , , ,
  1. Noise, interests, and democracy Chris Dillow, S&M
  2. Meritocracy and its discontents Wilfred McClay, Hedgehog Review
  3. Something must be done Lee Jones, Disorder of Things
  4. Nuclear power and the environmentalists Scott Sumner, EconLog

Nightcap

Brandon Christensen Links , , ,
  1. Aliens Robin Hanson, Overcoming Bias
  2. War, Peace, and the State (pdf) Murray Rothbard, The Standard
  3. The new ruling class (h/t Michalis) Helen Andrews, Hedgehog Review
  4. Free speech and socialist dictatorships Sharansky & Troy, Tablet

Nightcap

Brandon Christensen Links , , ,
  1. Toward a labor theory of Generation X Alisa Karl, LARB
  2. Teaching during a work stoppage David Henderson, EconLog
  3. Mystery shoppers for colleges Rick Weber, NOL
  4. Centralization, decentralization, and coordination Arnold Kling, askblog

From the comments: All of the Bad Things that democratic governments do

Brandon Christensen Comments , , , ,

My general point has to do with this anti-democratic argument:

[…] where are the masses to stand up against war, bank bailouts, taxation, police aggression etc?

These are all Bad Things that democratic governments do, but they are also Bad Things that all governments do. And, in turn, these Bad Things are much less prevalent in democratic societies than they are in non-democratic societies.

In fact, it is only in democratic societies that you can complain about these Bad Things. It is only in democratic societies that you can do something about these Bad Things (even if it’s just blog-ranting).

This simple observation leads me to conclude that anti-democratic libertarians have it back asswards when it comes to democracy. Democracy is a byproduct of liberty. Maybe anarchy would lead to even less “war, bank bailouts, taxation, police aggression etc,” but as of now it is in democracies that these Bad Things have been made less prevalent.

Anti-democratic libertarians aren’t thinking on the margin when it comes to democracy. (Hence the dogmatism you find in certain anarcho-capitalist circles.)

This is from yours truly, in another dialogue with Chhay Lin on democracies, anarchies, and meritocracies. Read it from the top!

Nightcap

Brandon Christensen Links , , ,
  1. The least empathic lot Joakim Book, NOL
  2. A note on the police or – “Why I don’t trust the police.” Michelangelo Landgrave, NOL
  3. What sort of “Meritocracy” would a libertarian endorse, if he had to? Federico Sosa Valle, NOL
  4. From the comments: follow on effects of liability rules? Rick Weber, NOL

Nightcap

Brandon Christensen Links , , ,
  1. Michel Houellebecq’s fragile world Siddhartha Deb, New Republic
  2. Classical liberalism vs libertarianism John McGinnis, Law & Liberty
  3. State capacity libertarianism is just old fashioned conservatism Samuel Hammond, Niskanen
  4. Meritocracy and capitalism in China today Long Ling, LRB

Nightcap

Brandon Christensen Links , , ,
  1. Clarence Thomas and abortion Corey Robin, Crooked Timber
  2. NYC’s war on Asian children Dennis Saffran, City Journal
  3. Race, racism, and the law in America Jacques Delacroix, NOL
  4. How often has the U.S. Supreme Court struck down a federal law? Keith Wittington, Volokh Conspiracy

Poverty Under Democratic Socialism — Part II: Escaping the Padded Cage

Jacques Delacroix Current Events, History , , , , , , , , ,

There aren’t many signs that the French will soon free themselves from the trap they have sprung on themselves. The Macron administration had been elected to do something precisely about the strangling effect of taxation on French economic life and, on individual freedom. (The latter message may have been garbled during his campaign.) Are there any solutions in sight for the French crisis of psychic poverty, framed by both good social services and high taxes?

I see two kinds of obstacles to reform. The first is comprised of collective cognitive and of attitudinal deficiencies. The second, paradoxically, is a feature of French society that American progressives would envy if they knew about it.

Cognition and attitudes

After four months of weekly demonstrations, the gilets jaunes (“yellow vests”) protesters had not found the language to articulate clearly their frustration. I mean, at least those who were left protesting. They seem to be falling back increasingly on crude views of “social justice” (“les inégalités”) as if, again, the issue was never to produce more, or to retain more of what they produce, but only to confiscate even more from the (fleeing) rich. Over the many years of democratic socialism, French culture has lost the conceptual vocabulary that would be necessary to plan an exit out of the impasse. Here is an example of this loss: In the past twenty years of reading and watching television in French almost every day, I have almost never come across the single word “libéral.” (That would be in the old English meaning of “market oriented.”) The common, nearly universal term is “ultra-libéral.” It’s as if favoring an analysis inclined toward market forces could not possibly exist without being “ultra,” which denotes extremism.

What started as a fairly subtle insult against those who discreetly appreciate capitalism has become fixed usage: You want more free market? You are a sort of fanatic. This usage was started by professional intellectuals, of course (of which France has not shortage). Then, it became a tool tacitly to shut off certain ideas from the masses, all the while retaining the words derogatory muscle. So, in France today, one can easily think of oneself as a moderate socialist – on the center left – but there is no balancing position on the center right. (3) It makes it difficult to think clearly, and especially to begin to think clearly about politics. After all, what young person wants to be an extremist, except those who are really extremists?

I saw recently online a French petition asking that French economist Frédéric Bastiat’s work be studied in French schools. Bastiat is one of the clearest exponents of fundamental economics. His contribution is not as large or as broad as Adam Smith’s but it’s more insightful, in my judgment. (He is the inventor of the “broken window” metaphor, for instance.) He also wrote unusually limpid French. Bastiat has not been part of secondary studies in France in my lifetime. His name is barely known at the university level. Marx and second, and third-rate Marxists, on the other hand, are omnipresent. (Some cynics would claim that whatever their conversation, the educated French do not read Bastiat, or A. Smith, but neither do they really read Marx!)

Few, in France, are able to diagnose the malaise that grips the country because it has ceased to have a name. The handful who understand capitalism are usually allergic to it because it does not guarantee equal outcomes. A minority, mostly business people, grasp well enough how it works and how it has pulled most of humanity out of poverty but they are socially shamed from expressing this perception. There is little curiosity among the French about such questions as why the American GDP/capita is 35% higher than the French. They treat this information as a sort of deed of Nature. Or, for the more ideological, among them, it’s the sad result of America’s unfairness to itself. A debate that ought to take place is born dead. How did this happen? Socialists of my generation, most good democrats, born during and right after WWII largely, early on took over the media and the universities. They have shaped and constrained public opinion since at least the sixties. They have managed to stop discussions of alternative economic paths without really conspiring to do so, possibly without even meaning to.

A really deep state

In 1945, after the long night of the 1940 defeat and of the Nazi occupation, many French people where in a mood to engender a new society. They created a number of novel government organizations designed to implement their vision of clean government but also, of justice. (They took prosperity for granted, it seems.) One of the new organizations was a post-graduate school especially designed to ensure that access to the highest levels of the government bureaucracy would be democratic and meritocratic. It’s called, “École Nationale d’Administration” (ENA). It accepts only graduates of prestigious schools. The ENA students’ per capita training costs are about seven times the average cost for all other higher education students. ENA students are considered public servants and they receive a salary. France thus possesses a predictably renewed cadre of trained administrators to run its government. And, repeating myself here, its members are chosen according to a strictly meritocratic process (unlike the most prestigious American universities, for example), a process that is also extremely selective.

In 2019, ENA is flourishing. The school has contributed four presidents and eight Prime Ministers to-date. Its graduates are numerous among professional politicians, as you might expect. In addition, they are teeming in the highest ranks of the civil service, and also of business. That’s because they go back and forth between the two worlds, with some benefit to their careers and to their wallets. This iteration does not imply corruption. Mostly, ENA graduates do not have a reputation for dishonesty at all. They help one another but it’s mostly above board. (4) This being said, it’s difficult to become really poor if you are an ENA graduate.

Graduates of ENA are often disparagingly described as a “caste,” which is sociologically inaccurate because caste is inherited. The word is meant to render a certain collective attitude of being smugly sealed from others. The intended meaning is really that of “upper caste,” of Brahman caste, to signify: those who think they possess all the wisdom.

All ENA graduates have made it to the top by taking the same sort of exam. The style of exams and the way they are corrected become known over time. Naturally, ENA candidates study to the exam. The ENA formula for success is not a mystery although it’s not just a formula; ENA also requires a sharp intelligence and character. ENA graduates have important traits in common, including a willingness to spend their adolescence cramming for increasingly difficult competitive exams. There are few charming dilettantes in their ranks. They all emerge from a process that does not reward imagination.

ENA graduates – dubbed “énarques” – seem overwhelmingly to share a certain view of the desirable interface between government and the economy. It’s not hard to guess at, based on thousands of their speeches reproduced in the media, and with the help of a little familiarity with French classical education. Its origin is neither in capitalism nor in socialism. (Sorry for the only slightly misleading title of this essay.) It predates both by 100-150 years. It’s rooted in the well known story of the Minister Colbert’s 17th century economic reforms. (It’s well known in the sense that every French school kid knows his name and a thing or two about the reforms themselves.) Colbert (1619-1683) raised tariffs, regulated production in minute detail and, above all, he created with public funds whole industries where none existed, in glass, in porcelain, but also in textiles, and others. I believe his main aim was only to increase government (royal) revenue but others think differently. At any rate, there is a widespread belief that general French prosperity rose under his administration.

To make matters worse, Colbert is a historical figure easy to like: hard working, honest, an effective patron of the arts. With such a luminary to look up to, it’s fairly effortless to ignore both the actual disorderly origins of capitalism, and also the initially compassionate roots of its socialist counter-reaction. (On capitalism’s origins, and originality, you might consult my entry: “Capitalism.” The Blackwell Encyclopedia of Sociology. Blackwell Publishing. Vol. 2, Malden, Mass. 2006. Make sure of that particular edition – 2006 – my predecessors and successors were mostly opaque Marxist academic lowlifes.)

For seventy years, French economic policy has thus been made largely by deeply persuaded statists, people who think rule from above natural (especially as it takes place within a broadly democratic framework), who judge government intervention in economic matters to be necessary, fruitful, and virtuous, people who believe that government investment is investment, people who have given little thought to private enterprise, (although they occasionally pay lip service to it, largely as if it were a kind of charity). Almost none of them, these de facto rulers, is a bad person. Their pure hearts make them all the more dangerous, I believe. The result is there in France for all to see: a sclerotic economy that has failed to provide enough jobs for fifty years, a modest standard of living by the criteria of societies that industrialized in the nineteenth century, a worsening unease about the future, a shortage of the freedom of small pleasures for the many.

I do not use the conventional words of “tyranny” or “despotism” here because both are normally more less deliberately imposed on the populace. Nothing of the sort happened in France. On the contrary, lack of individual freedom in France is the accumulated consequence of measures and programs democratically adopted within the framework described above. Together, these well-meaning social programs are squeezing the liveliness out of all but the upper layers of French society.

There exists in the country a growing resentment of the énarques’ basically anti-capitalist rule. One recent president, Sarkozy, even declared he partly owed his election to bragging about not being a graduate from ENA. Yet, the thousands of énarques permanently at the levers of command for seventy years are not about to relinquish them, irrespective of the political party or parties in power. Few groups controlling as much as they ever does so voluntarily. The deep sentiment of their collective virtuousness will make them even more intransigent. Most French critics believe that the énarquesare incapable of changing as a cadre, precisely because they are really an intellectual elite of sorts, precisely because they are not corrupt. And, as I remarked above, ENA’s statist (“socialist”) reign has lasted so long that the French people in general have lost track of the very conceptual vocabulary an anti-bureaucrat rebellion would require. (We know what we don’t want, but what do we want?)

(3) It’s true also that historical accidents have deprived France of a normal Tory party. Its place is currently occupied by reactionary nationalists (currently the “Rassemblement national,” direct descendant of the “Front National,” of Marine Le Pen) who don’t favor market forces much more than does the left.

(4) I take the ENA graduates’ reputation for probity seriously because, right now, as I write, there are clamors for abolishing the school but its generating corruption in any way is not one of the reasons advanced.

[Editor’s note: Here is Part I, and here is the entire longform essay.]

The Admissions Scandal Will Improve Universities

Jacques Delacroix Current Events , , , , , ,

I would have been annoyed, I would have felt frustrated if my alma matter, Stanford, had been left out of the university admissions scandal. After all, what does it say about your school if it’s not worth bribing anyone to get your child admitted to it? Fortunately, it’s right in the mix.

I spent ten years in American universities as a student, and thirty as a professor. You might say that they are my milieu, that I am close to being an expert on them, or perhaps, just a native informant. Accordingly, reactions to the March 2019 admissions scandal seem a bit overwrought to me. That’s except for the delight of encountering the names among the line cutters of famous and successful people one usually associates with a good deal of sanctimoniousness. The main concern seems to be that the cheating is a violation of the meritocratic character of universities.

In fact, American universities have never been frankly or unambiguously meritocratic. They have always fulfilled simultaneously several social functions and served different and only partially overlapping constituencies. Sure enough, there is some transmission of knowledge taking place in almost all of them. I don’t mean to belittle this. I am even persuaded that there is a palpable difference between intelligent people who have attended college and those who have not. In addition, it should be obvious that some of the knowledge transmitted in higher education organizations is directly instrumental to obtaining a job (most engineering courses of study, accounting). That, although, in general, it was never expressly the primary role of undergraduate education in the US to procure employment.

The best of universities also contribute to the production of new knowledge to a considerable extent. University research is probably the bulk of the considerable body of American research in all fields. (Incidentally, I believe that the dual function of American faculty members as both researchers and teachers largely accounts for the superior international reputation of American higher education. More on this on demand.) The remainder of schools of higher education imitate the big guys and pretend to be engaged in research or in other scholarly pursuits. Many succeed some of the time. Some fail completely in that area. In fact most university professors are well aware of the degree to which each individual college or university offers conditions propitious to the conduct of research and such, and demands them. But teaching and research are not the whole story of American academia by a long shot. Those in the general public who think otherwise are deluded or, largely misinformed.

Most American universities are obviously superb sports venues; a few are world-grade in that area. In some schools, football financially supports learning rather than being an adjunct activity. Some, such as Indiana University where I taught, make do with basketball which can also be quite lucrative. It’s obvious too that residential universities- which include almost all the top names – are reasonably good adolescent-sitting services: Yes, they get drunk there but there is a fair chance they will do it on campus and not drive afterwards. If they do too much of anything else that’s objectionable – at least this was true until quite recently – there is a fair chance the story will get squashed on campus and remain there forever.

And, of course, of course, the big universities, especially the residential version but not only it, are incomparable devices to channel lust. They take young people at approximately mating age and maximize the chance that they will come out four, or more likely, five years later, either suitably matched, or appropriately unmatched. It’s a big relief for the parents that their darling daughter may become pregnant out of wedlock but it will be through the deeds of a young person from their own social class. For some parents, universities would be well worth the cost, if they limited themselves to staving off what the French call: “mésalliances.” (Go ahead, don’t be shy; you know more French than you think.)

Naturally, universities could not have been better designed to promote networking, offering at once numerous opportunities to meet new people (but not too new), and plenty of leisure time to take advantage of them, all in a conveniently limited space. As is well known the results of this networking often last a lifetime. For some, campus networking constitutes an investment that keeps paying dividends forever.

And, I kept the most important university function for last. I think that from the earliest times in America, universities served the purpose of certifying upper-class, then, middle-class status. This credentialing function is usually in two parts. The young person gets social points for being accepted in whatever college or university the parents consider prestigious enough, nationally, internationally, or even locally. The student gets more points for actually graduating from the same school or one equivalent to it.

This idea that higher education organizations publicly certify social status is so attractive that it has spread downward in my lifetime, from the best known schools, Ivy League and better (such as Stanford), down to all state universities, and then, to all lower admission-standards state colleges, and even down to two-year community colleges. In my neighborhood of California, possessors of a community college Associate of Arts degree are considered sort of upper lower-class. This small degree influences marriage choices, for example. I used to know a man of a sort of hillbilly extraction who was very intelligent and extremely eager to learn and who attended community college pretty much for twenty years. He kept faithful to his origins by never even earning an AA degree. (True story. Some other time, of course.)

Merit recruitment of faculty and students

I, and the academics I know are not very troubled by the cheating news, only by the crudeness involved, especially in the raw exchange of cash for illicit help. I suppose most of us realized, even if in a sort of subliminal way, that admission was never thoroughly or even mainly based on merit as measured, for example by high school achievement and by test results. My own undergraduate experience is limited but varied. I spent two years in a good community college where pretty much everyone who could read was accepted. Then, I transferred to Stanford with a full tuition scholarship. Academic merit did not loom very large in either school, and perhaps a bit more in the community college than it did at Stanford.

In order to preserve a reputation for intellectual excellence that contributes to their ability to credentialize without subsuming it at all, universities and colleges must actively recruit. They have first to attract faculty with a sufficient supply of their own (academic) credentials in relation to the status the universities seek to achieve, or to keep. Often, regularly for many, they also reach down to recruit as students promising young people outside of their regular socioeconomic catchment area. Their own motives are not always clear to those who make the corresponding decisions. One is do-gooding, of course completely in line with the great charitable American tradition (that this immigrant personally admires).

At the same time, colleges and universities don’t select scholarship recipients for their moral merit but for their grades, and for other desirable features. The latter include, of course, high athletic performance. Additionally, in my observation, many, or at least, some, also recruit poor undergraduates the way a good hostess composes a menu. When Stanford plucked me out of my young single immigrant poverty, it was not only for my good community college GPA, I was also an interesting case, an interesting story. (There were no French undergrads at all on campus at the time. Being French does not have cachet only for foolish young women.) Another transfer student they recruited at the same time, was a Turkish Jew whose mother tongue was 16th century Spanish (Ladino). How is this for being interesting? I am speaking about diversity, before this excellent word was kidnapped by an unlovable crowd.

Attendance, grades and merit

At Stanford, I realized after a couple of quarters that many undergraduates did not care to go to class and did not care much about grades either. I discovered a little later (I never claimed to be the sharpest knife in the drawer!) that few were preoccupied with receiving good grades. That was because it was quite difficult to get a really bad grade so long as you went through the motions.

I was puzzled that several professors took an instant liking to me. I realized later, when I was teaching myself, that it was largely because I was afraid of bad grades, greedy for good grades, and I displayed corresponding diligence. I thought later that many of the relaxed students were legacy admissions (I did not know the term then) who had good things coming to them pretty much irrespective of their GPA. Soon, I perceived my own poor boy conventional academic striving as possibly a tad vulgar in context. I did not resent my relaxed fellow students however. I kind of knew they paid the freight, including mine. Incidentally, I am reporting here, not complaining. I received a great education at Stanford, which changed my life. I was taught by professors – including a Nobel Prize winner – that I richly did not deserve. The experience transformed and improved my brain architecture.

About ten years after graduating, I became a university teacher myself, in several interesting places. One was a denominational university that was also pricey. I remember that there were always there well dressed young women around, smiley, with good manners, and vacant eyes. (I don’t recall any males of the same breed; I don’t know why.) They would do little of the modest work required. Come pop-quiz time, they would just write their name neatly on a piece of blank paper. I gave them the lowest grade locally possible, a C, of course. Same grade I gave without comment to a bright-faced, likable black athlete who turned in the best written essay I had ever seen in my life. There were no protests, from any party. We had a tacit understanding. I speculate the young women and the star athletes had the same understanding with all other faculty members. I don’t know this for fact but I don’t see how else they could have remained enrolled.

And then, there always were always cohorts of students bearing a big sticker on their forehead that said, “I am not here because of my grades but in spite of my grades.” OK, it was not on their forehead but on their skin. That was damned unfair to those minority students who had gained admission under their own power if you ask me. Nobody asked me. And then, especially in California, there has been for a long time the tiny issue of many students whose parents come from countries where they eat rice with chopsticks. Many of those couldn’t gain admission to the school of their choice if they had invented a universal cure for cancer before age eighteen. As I write, this issue is still being litigated. I doubt there is anyone in academia who believes the plaintiffs don’t have a case.

Meritocracy!

Virtue out of evil

The mid-March 2019 admissions scandal might paradoxically make universities better, from a meritocratic standpoint. By throwing a crude light on their admission process and turning part of the public cynical about it, the scandal may undermines seriously their credentialing function. It will be transformed, or at least, it may well be watered down. I mean that if you can’t trust anymore that the fact that Johnny was admitted to UnivX is proof of Johnny’s worth, then, you might develop a greater interest in what Johnny actually accomplished while he was attending UnivX. You might become curious about John’s course of study, his choice of classes, even his grades, for example. That wouldn’t be all bad.

Some schools, possibly many schools because universities are like sheep, may well respond by strengthening their transmission of knowledge function, advertising the fact loudly and, with luck, becoming trapped in their own virtuous snare. Some universities, possibly those that are now second-tiers rather than the famous ones (those could well prove immune to any scandal, indestructible) may actually become more of the learning centers they have long pretended to be.

I can envision a scenario where the US has a first kind of good universities, good for intellectual reasons, to an extent, but mostly good for continued social credentialing. And next to the first kind, would be higher education establishments mainly dedicated to studying and learning. The latter, if they were successful, would unavoidably and eventually grow a credentialing function of sorts. That would be fine. The two categories might compete for students. That would be fine too. It would be good for recruiters to have a clear choice of qualities. I think that university professors, or some of them, many of them, would easily move between the two categories of schools. There would be a single labor market but different vocations, perhaps serialized in time. Above all, students would have more choice and more sharply defined choices. Everyone could stop pretending. Actual intellectual merit and grit would find a bigger place in the higher education enterprise.

This is all wool-gathering of course. It depends on one of my big predictions being false. I mean none of the above matters if American universities are committing suicide before our eyes. I refer to unjustified and unjustifiable tuition raises over thirty years, to their collaborating in the moral horror that student loans have become; I am thinking of their capture by a monolithic tribe of ideologues clinging to an old, defeated utopianism. I refer even more to their current inability or unwillingness to protect free speech and the spirit of inquiry.

No Country for Creative Destruction

Federico Sosa Valle Culture, Liberty, Philosophy , , , , , , , ,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Nightcap

Brandon Christensen Links , , ,
  1. Confucianism and meritocracy James Hankins, American Affairs
  2. Lots of ideological axes to grind Scott Sumner, EconLog
  3. Did the notorious Zinoviev Letter ever exist? Alan Judd, Spectator
  4. That time when Chile conquered Peru and Bolivia Stefan Aguirre Quiroga, History Today

What sort of “Meritocracy” would a libertarian endorse, if he had to?

Federico Sosa Valle Liberty, Philosophy , , , , , , , , , ,

The first attempt to answer this question should say: “none.” Notwithstanding that this is the correct approach, we can’t help but feel uneasy about it. Libertarians have had to deal with this uncomfortable truth for so long. In respect to my own personal experience, I remember where I was when I read, for the first time, “Equality, Value, and Merit,” the title of Chapter 6 in Friedrich A Hayek’s The Constitution of Liberty. I was attending a weekly reading group about that book, and we were gathered in a cafê in Buenos Aires. The number of attendees was enough to find every kind of reader you could expect (and not expect) to meet in such a group:

  • There was the one who had already studied and condensed each chapter and then was re-reading and re-assessing the whole book; the one who did his “homework” without any effort;
  • the one who the embarrassment of failing to accomplish the reading requirements for the meeting overcame the pleasure of any type of procrastination (i.e. me, mostly because I was one of the promoters);
  • and the one who gave to the group the enthusiasm to last for six months in a row and finish the whole book. The latter, in this case, was a truly “natural Libertarian,” the one who had the pure Libertarian position for each subject by not showing an excessive regard for what Hayek was actually saying.

I remember that I arrived to the “Equality, Value, and Merit” meeting with a feeling of uncertainty. Hayek argued that there is no merit to acknowledging in a market process, none of any sort, a just compensation for the value of one’s apportation – a value whose magnitude depends on the relative scarcity of the marginal product. The reader who always accomplished his reading duties without any effort shared my sentiment of awe. Almost the whole meeting was conducted by our companion who was reading the book for a second – or perhaps third – time. In effect, Hayek left no place to meritocracy, since it is impossible to decide democratically among any scale of merit (remember Kenneth Arrow’s theorem on the impossibility of democracy, cited later on the third volume of Law, Legislation and Liberty), so retributions based on value enable the system to adapt spontaneously to the changes in the environment with more efficiency. The explanation was a bit of an unpopular one, but accurate. Not without reluctance, almost all of us accepted it. All of us but one: our true spontaneous Libertarian. She would under no condition surrender her convictions on the merit of the retributions that the market process assesses spontaneously to each one in accordance to the marginal value of their activity. While we acknowledged no merit to the results of the market process, she was prone to endorsing a moral value to the blinded results of the allocation of goods adjusted to the changes in their relative scarcities.

Many years after our debate took place, I am now starting to acknowledge that there might be a particle of truth in the statements of our natural Libertarian and, what is most outstanding, that these statements could be deducted from other chapters of the same book (The Constitution of Liberty), particularly the one which concerns on the definition of liberty (“Liberty and Liberties”). I said a particle of truth, not the whole truth, but at least that particle which is needed to start an intellectual quest.

In The Constitution of Liberty, written in 1960, Hayek made a quick outline of the different notions of liberty that were popular at that moment in time. Positive liberty, negative liberty, inner liberty, individual liberty, freedom from, freedom to, and freedom of were some of the categories mentioned. He made it clear that an in-depth discussion of each notion was not his main aim, but instead that was trying to make a quick account of them in order to give a conceptual frame to the one of his choice: a variant of the individual negative liberty defined as “the absence of arbitrary coercion.”

Slavery is the subjection to the will of another person, without boundaries of any kind. A slave could be subject to a good master who allows him to keep a normal life, but he could lose all of his freedom on a whim of his master at any time. On the other hand, the boundaries to the freedom of a free man are imposed by abstract and general laws and by contracts and the judicial decisions based on those contracts. The ordinary experience of a man enables him to discover principles and patterns of what would be regarded by others as just conduct, and to form in such way expectatives on how a given conflict could be solved. This concept of individual liberty as an absence of arbitrary coercion stated by Hayek in 1960 finds a strong resemblance today in the notion of liberty as an “absence of domination” by contemporary republican authors such as Quentin Skinner, Philip Pettit and, here in Argentina, Andrés Rosler.

The outcome of such a system is that every individual is enabled with a set of possible actions to be taken at his sole will, which we call an “individual sphere of autonomy.” In principle, these spheres are delimited by general and abstract laws and any controversy on the limits between two of them will be solved by an impartial court whose decision will be based on principles expressed by these norms. These judicial decisions would be in accordance to the patterns of just conduct that everyone had previously formed by ordinary experience, so they will prove correct the expectatives of most people and then will be regarded as non-arbitrary.

Of course, we could find that some judicial decisions would be taken by equity or that some administrative decisions would be based on expediency. But such a system could stand some exceptions, most of them aimed to solve an unexpected situation. Some of these new “precedents” are compatible with the principles which inform the existing laws and then their formulation will be a sort of “discovery” of new norms that until that moment were “implicit” in such a normative system. A criterion to distinguish the discovery of new norms from a decision based on expediency might be that the universalisation of the former brings about stability to the system; it makes the law work as a negative feedback system while the universalisation of the latter would only cause an increasing process of disorder.

Friedrich Hayek developed his theory of law – savagely summarised in the previous paragraphs – in Law, Legislation and Liberty and it provides us with an accurate modelization of how it would work a legal system that could not be experienced as “arbitrary” by the individual. In Hayek’s legal model, the fulfillment of the law would imply the respect of individual freedom as the absence of arbitrary coercion, since all boundaries to one’s will are previously known or reasonably expected and, then, our individual plans are conceived and accomplished regarding such limits.

After such a long digression we may come back to our initial enquiry: if a Libertarian had to “do meritocracy,” what sort of meritocracy would it be? The usual answer is, as we noted above, “none.” But I suspect that the wrong statements of some intuitive Libertarians carry within them a kernel of truth: the assignment of functions and subsequent retributions are expected not to be arbitrary, because even the changing value of the marginal products implies (1) some sort of predictability, (2) an impersonal process, and (3) a learning feedback system that fosters increasingly correct pattern predictions.

If we state that liberty is one, be it political, economic or social, we cannot use a definition of liberty in the political realm and another notion of it in the economic one. The “none answer” implies just plain individual negative liberty (absence of coercion) in political economy issues, while our definition of individual liberty is “absence of arbitrary coercion,” and this should be applied to the definition of economic liberty as well.

Therefore, I dare to state that a non-arbitrary distribution of functions and its subsequent remunerations should be a central problem to economic liberty, if we define it as “absence of arbitrary coercion.” Since our spheres of individual autonomy are delimited by a system of norms of just conduct, general and abstract, which distinguish arbitrary from just coercion, the economic liberty is expected to be found in such a framework.

Usually, the legal framework of a free market is regarded to be a neutral one: general and abstract rules, whose source could be the legislation sanctioned by an assembly of deputies of the people and notable citizens or the customs acknowledged as mandatory by the judiciary courts. In any case, general and abstract rules that are not conceived by a single will but have the impartiality of a plurality of legislators or juries. In this sense, “absence of arbitrary coercion” is identified with “absence of coercion by discretionary powers of the state.” Nevertheless, we consider that this is not enough: we should be conceptually endowed to do an evaluative judgement about the outcome of such economic system. We need to determine if the result of a neutral legal framework produces a non-arbitrary distribution of functions and retributions.

A neutral legal framework works like a peaceful, predictable, and secure Lockean Civil Society – i.e. the opposite of a Lockean Civil Society. Since we accept that legal norms express rules of just conduct whose obedience brings about a rightful delimitation of each individual sphere of autonomy, the remaining normative conflicts will be related to moral and social norms. But these normative conflicts will not occur among competitive orders, such as legal order against moral order or against social order, since we acknowledge the preeminence of the rule of law over any other source of obligations. Modernity relegates moral and social norms to the inner of each individual sphere of autonomy or, at most, to conflicts among different individuals which will never escalate and balloon into physical violence. That means that morals and social customs will not bring about an alternative order to society, but that they will enable the individual with an order to rule the inner aspects of his personality and a limited scope of his interactions with other individuals. These sets of moral and social rules will not integrate the formal institutions – to use the categories coined by Douglass North – but will be embodied in “packs of precepts of life” that we usually name “virtues” (a term cherished by the republicans mentioned above and by libertarian authors such as Deirdre McCloskey.)

These “virtues” are expected to contribute to the fulfilment of most individual plans in a system of inner stability. What we regard as good and wrong are a set of received values accrued after generations of trial and error processes. “Being honest,” for example, might be considered as a pack of precepts of life which successfully spread all over the members of the society structured by a neutral legal framework. The unit of evolution is neither the society nor even the individuals, but the “virtues” that are spread among the individuals that compounds that society.

At this stage, we must admit that what we regard as “neutral” is just an analytical category that means a set of fixed elements that work as a framework for other elements which change their respective relative positions. This framework is what Hayek named “order” (we can find in his Sensory Order the most accurate definitions of this concept: more than one). These notions allow us to do a clear distinction between the concepts of “evolution” and “change.” Change occurs among the relative positions of different elements given a stable framework – a Hayekian “order” – while “evolution” – in our terms – is related to a modification in the framework where the ordinary events occur. In the words of Douglass North, “evolution” is an incremental change in opposition to a disruptive change – or revolution. Notwithstanding this use of the terminology at hand, only Hayekian orders “evolve,” while their elements (or events) simply “change” their relative positions.

Nevertheless, to use an Arthur Schopenhauer image, events are the eyes of the blind machine which is the spontaneous order. Given a certain abstract order, the population with some types of virtues extended among the individuals will prevail over other ones. For example, Max Weber, in his Protestant Ethic, showed how the habits of frugality, self-confidence, hard work, and so on, were once considered by most people as eccentric but eventually took over whole communities and changed the meaning of good and evil in a process that ended up in an “iron cage of liberty”: the dissolution of the transcendent values that had previously given a religious sense to those habits into a neutral framework of standard moral duties immanent to the social system.

Another classical book that illustrate a process of “natural selection” of virtues might be The Prince by Nicoló Machiavelli: from the very beginning, the author warns us that a different set of virtues would be needed to be develop in a Republic and that he treated that matter in another book, The Discourses on the First Decades of Titus Livius. The Prince, instead, is focused on determining which virtues is a Prince to be enabled with in order to survive in a realm where no one has the sense to be bound by any moral or legal obligation, i.e.: in a set of non-cooperative games. The whole book can be read as a succession of mental experiments about which virtue could make the Prince survive over his competitors. In Richard Dawkins terms, the ones which are competing are the virtues, and the politicians who struggle with each other are the “vehicles” of those virtues. A very well-known example shows how the population of the ones who seek to be feared at the risk of being hated will displace the population of the ones who seek to be loved at the risk of being scorned. To put this another way: in the “ethical pool” the trait “seek to be feared” will outshine the trait “seek to be loved.” Finally, at the last paragraph of the book, the very virtue of the Prince rules supreme among the other ones: the initiative.

Besides the fact that The Prince – as Quentin Skinner pointed out – should be regarded as a satire (but see Barry here and here for a contrary account) , the emergence of the virtue of the initiative as the inner quality of a political leader of a non-republican system scraps any moral sense of the term “virtue.” Virtues are a compound of personality traits that conditions the agent’s decisions from the inner. But certain virtues depend on the legal framework to spread over the “ethical pool.” As we have said, the virtues that will prevail in an authoritarian regime will be different from those which flourish in a republic. The “republican virtues” described by Machiavelli in his Discourse on the Decades can only proliferate among people within a given set of procedural rules. A similar distinction was made later by David Hume: “natural virtues,” such as empathy, can emerge at any given circumstances, as they are embodied in human nature, but artificial virtues such as “justice” will depend upon a determinate legal framework.

Virtues will erode or shore up a formal institutional framework by incremental change (D. North), yet this will occur only as a response to the change in the environment (virtues as the eyes of the blind machine of the spontaneous order). For example, Gutenberg’s press discovery allowed the evangelical movement to gain force since anyone could then start to count with a Bible. Within the Evangelical movement took place a Puritan one, which at its turn changed the sense of morality in the people for whom it took place. This resulted, for example, in the anti-slavery political movement in certain states of the US or cities of the UK such as Bristol, even at a price of high economic cost.

Nevertheless, while spontaneous changes in virtues lead to incremental political and legal change, a disruptive change of the latter could bring about a dramatic shift in uses and customs of the people involved. This need not to be a violent revolution, since democratic institutions are enabled to issue the required laws to make a significant change for the good – or for the bad – in the said virtues to spread among the society. Sound money is a condition for the virtue of frugality to appear, for example. On the other hand, the Adam Ferguson’s book When Money Dies shows how the people change their main traits due to the phenomenon of hyperinflation.

Since virtues are – in the definition stated here – a mere pack of ethical traits that condition the individuals who are their vehicles from the inner, allowing them to survive and pass their virtues to the next generation of individuals, on what basis should we endorse some virtues over other ones? Our theory cannot provide us with a normative answer by itself, since it leads us to the conclusion that what we regard as good and evil comes from a process of blind evolution. As we have said, a learned libertarian would not endorse a meritocracy of any kind.

However, the complex order compounded by the legal framework and the moral and social virtues extended in society might be “neutral” for each individual involved in such society, but the legal framework will not be neutral to the moral and social virtues that are spread in that society. Different types of frameworks will deliver different sets of virtues to be spread. An authoritarian regime will deliver the set or virtues described by Machiavelli in The Prince, while a republic will spread the virtues of The Discourse on the Decades of Titus Livius. Moreover, the difference between the former and the latter is found in the proportion of decisions taken on the basis of expediency and the ones taken on the basis of principles. The whole message of Hayek’s Road to Serfdom might be exemplified in the transition from a system of public decisions based on principles (i.e.: a republic), to a system of public decisions based on expediency. Each system will deliver a different set of “virtues.”

Thus, we are now in a better position to answer the question “what sort of meritocracy would a libertarian would endorse, if he had to?” A natural libertarian will expect that the distribution of functions and retributions will correlate with the virtues most expected to be found in a legal and political system in which most decisions are taken on the basis of general and abstract principles. Such a system of norms and values will be experienced by the individual as “non arbitrary” and then the ideal of negative individual liberty as “absence of arbitrary coercion” will be achieved, not only in the political realm, but also in the economic and social ones.

In a “Keynesian turn,” we could point out that a system whose decisions are taken purely on the basis of principles is an “especial case” and that we usually find mostly the opposite. In most constitutional systems the “macroeconomic policy” is not a matter subject to the courts and we have to acknowledge that the spreading of some virtues over other ones are more conditioned by monetary or tariff policies than by a neutral legal framework. Nevertheless, this reality is not a reason to disregard the value of the virtues that would arise should those policies be neutral (i.e. not being policies at all, but legal norms). Moreover, these objections just pointed out are good reasons to claim for a republican system of liberties as a fairer system.

To summarize: natural libertarians are not so wrong when they aim to achieve a special kind of meritocracy – the one in which the functions and retributions would correlate with the virtues spread in a society where liberty as absence of arbitrary coercion is respected. In such a system, most political decisions will be taken on the basis of general and abstract principles. After all, the dissatisfaction manifested by a natural libertarian when most of the wealth of a society goes to the rent seekers is rooted in a well founded claim for a “free and virtuous society.”