- The nature and origins of modernity Brian Micklethwait, Samizdata
- If poverty is declining, why worry about inequality? Pranab Bardhan, 3 Quarks Daily
- 800 years of change in Hawaii and the Pacific Glyn Ford, Asian Review of Books
- Are we still living in Western Civilisation? Ananya Chowdhury, ASI
Institutions, whether formal or informal, consist of limitations on behaviour that allow structuring an order of human interaction (North, D.C., 1991). Such institutions endow decisions with their agents of transitivity and, consequently, with rationality and predictability. That is to say, an institution allows to conform expectations on a range of events dependent on individual decisions that will happen and, above all, on another range of events that will not happen or, if they do happen, they will generate an obligation to repair (either to a private individual through a pecuniary indemnity or to society through a criminal sanction).
For these reasons it is interesting to compare institutions with algorithms: a set of automatic procedures -and therefore devoid of arbitrariness on the part of any of the agents- that, according to the data provided by the environment, yield a range of possible results. In a modern political legal system (equality before the law, division of powers, political responsibility of high officials, principle of closure, etc.), such results show at the individual level a certain range of prohibited actions (the aforementioned principle of closure, everything that is not prohibited is allowed). At the individual level, an institution as an algorithm will allow us to predict what an individual will not do, but not what he will concretely do outside of that range of prohibited actions. At the governmental level, the opposite occurs: institutions allow us to anticipate what judicial decisions will be, which in turn will have to review laws and decrees that violate the rights and guarantees of individuals.
However, while institutions can function as algorithms, providing predictability to individual decisions and policies, they cannot function in a vacuum, but they need to be integrated into a legal and political system. This is so that it is impossible to enunciate them if it is not within the parameters configured by such systems. If institutions are algorithms, legal and political systems are abstract machines that select and integrate such institutions. It is the institutions integrated into a legal and political system that constitute a framework of incentives for human action.
Such institutions evolve following a natural selection pattern, when the legal-political system allows to act a negative feedback system mainly articulated by judicial decisions and precedents that readjust their meaning and content for the resolution of concrete controversies based on principles emanating from the legal system itself. Of course, each system represents the materialization of a set of values. Those of modernity, for example, are based, among others, on the dignity of the human person, which translates into the right to individual autonomy.
An ethic of political responsibility that defends such values can be carried forward by rescuing an abstract system of dispute resolution between individuals that refrains from designing society from a central command. In many cases, such an ethic of responsibility must face ideological political programs that are presented under the guise of an ethics of principles.
Such antagonism is asymmetric, since the central design of society presents its followers with a concrete model and the promise that everything works. Although, this only leads, in practice, to an increasing number of decisions based on expediency. Thus, the opposite of the predictability and absence of arbitrariness of a system of spontaneous coordination of individual plans.
It is a characteristic feature of Modernity to separate between private morality and public ethics. The first concerns the ethics of principles by virtue of which each individual governs his own sphere of autonomy. Each individual, while not interfering in the interests of third parties, is a legislator, judge, and part of their own moral issues. The law regulates conflicts of interest between individuals, giving legal protection to a certain range of interests and systematically denying it to others (Friedrich Hayek, Law, Legislation and Liberty, Volume I, “Norms and Order”, 1973). For example, in almost all modern legal systems the interest to move and, fundamentally, to leave a territory is protected through the freedom of locomotion. In the meantime, a producer may feel prejudiced by the mere existence of competition and nevertheless he may be denied the right to protection of his monopoly (since a “right” is a legally protected interest). In both cases, questions of principle and questions of social utility are combined.
In most modern systems, the interest to circulate freely is solved more by addressing questions of principles than of social utility – the right to freedom of locomotion is enshrined without addressing arguments about the utility of denying legal protection with respect to another interest. While the problems of protectionism and competition are considered mainly in terms of their social utility, the arguments about whether a certain individual or group of individuals have, as a matter of principle, the right to monopolize an economic activity by the mere fact of belonging to a certain ethnic group, estate, or guild today sounds ridiculous, but not in the past.
The widespread distinction practiced by Max Weber between ethics of conviction and ethics of responsibility continues in force. Individuals, in their private lives, have the right to make decisions following the ethics of conviction, although their principles may be debatable, obsolete, incongruous, and arbitrary. In any case, the consequences will have to weigh on the agents of the decision themselves. On the other hand, the consequences of the decisions of politicians extend to the whole society. The ethics of responsibility becomes relevant here, which, although it may come into conflict with the ethical principles most widely spread among members of society – that is, the current morality – it must address issues related to social utility. This is to say that a substitution of the current morality for welfare economics would be operated.
However, the Weberian notion of ethics responsibility brings with it all the problems of instrumental reason: the means-that is, the resources to be sacrificed-must be proportional to the ends-in this case, the social utility-but remains open to definition what are the values that will define social utility. This is how the question of principles is reintroduced, the discussions about what is right and what is wrong, i.e. morality, in the political sphere. Correlatively, the critiques around the notion of subjective or instrumental reason once formulated by Max Weber are also applicable to the aforementioned welfare economy, so that they retain special validity.