Does business success make a good statesmen?

Gary Becker made the distinction between two types of on-the-job training: general and specific. The former consist of the skills of wide applicability, which enable the worker to perform satisfactorily different kinds of jobs: to keep one’s commitments, to arrive on time to work, to avoid disturbing behavior, etc.. All of them are moral traits that raise the productivity of the worker whichever his occupation would be. On the other hand, specific on-the-job training only concerns the peculiarities of a given job: to know how many spoons of sugar your boss likes for his coffee or which of your employees is better qualified to deal with the public. The knowledge provided by the on-the-job training is incorporated to the worker, it travels with him when he moves from one company to another. Therefore, while the general on-the-job training increases the worker productivity in every other job he gets, he makes a poor profit from the specific one.

Of course, it is relative to each profession and industry whether the on-the-job training is general or specific. For example, a psychiatrist who works for a general hospital gets specific training about the concrete dynamics of its internal organization. If he later moves to a position in another hospital, his experience dealing with the internal politics of such institutions will count as general on-the-job training. If he then goes freelance instead, that experience will be of little use for his career. Nevertheless, even though the said psychiatrist switches from working for a big general hospital to working on his own, he will carry with him a valuable general on-the-job training: how to look after his patients, how to deal with their relatives, etc.

So, to what extent will on-the-job training gained by a successful businessman enable him to be a good statesman? In the same degree that a successful lawyer, a successful sportsman, a successful writer is enabled to be one. Every successful person carries with him a set of personal traits that are very useful in almost every field of human experience: self confidence, work ethics, constancy, and so on. If you lack any of them, you could hardly be a good politician, so as you rarely could achieve anything in any other field. But these qualities are the typical examples of general on-the-job training and what we are inquiring here is whether the specific on-the-job training of a successful businessman could enable him with a relative advantage to be a better politician -or at least have a better chance of being a good one.

The problem is that there is no such a thing as an a priori successful businessman. We can state that a doctor, an engineer, or a biologist need to have certain qualifications to be a competent professional. But the performance of a businessman depends on a multiplicity of variables that prevents us from elucidating which traits would lead him to success.

Medicine, physics, and biology deal with “simple phenomena”. The limits to the knowledge of such disciplines are relative to the development of the investigations in such fields (see F. A. Hayek, “The Theory of Complex Phenomena”). The more those professionals study, the more they work, the better trained they will be.

On the other hand, the law and the market economy are cases of “complex phenomena” (see F. A. Hayek, Law, Legislation and Liberty). Since the limits to the knowledge of such phenomena are absolute, a discovery process of trial and error applied to concrete cases is the only way to weather such uncertainty. The judge states the solution the law provides to a concrete controversy, but the lawmaker is enabled to state what the law says only in general and abstract terms. In the same sense, the personal strategy of a businessman is successful only under certain circumstances.

So, how does the market economy survive to its own complexity? The market does not need wise businessmen, but lots of purposeful ones, eager to thrive following their stubborn vision of the business. Most of them will be wrong about their perception of the market and subsequently will fail. A few others will prosper, since their plans meet -perhaps by chance- the changing demands of the market. Thus, the personal traits that led a successful businessman to prosperity were not universal, but the right ones for the specific time he carried out his plans.

Having said that, would a purposeful and stubborn politician a good choice for government? After all, Niccolo Macchiavelli had pointed out that initiative was the main virtue of the prince. Then, a good statesman would be the one who handles successfully the changing opportunities of life and politics. Notwithstanding, The Prince was -as Quentin Skinner showed- a parody: opportunistic behaviour is no good to the accomplishment of public duties and the protection of civil liberties.

Nevertheless, there is still a convincing argument for the businessman as a prospect of statesman. If he has to deal with the system of checks and balances -the Congress and the Courts-, the law will act as the selection process of the market. Every time a decision based on expediency collides with fundamental liberties, the latter must withstand the former. A sort of natural selection of political decisions.

Quite obvious, but not so trite. For a stubborn and purposeful politician not to become a menace to individual and public liberties, his initiative must not venture into constitutional design. No bypasses, no exceptions, not even reforms to the legal restraints to the public authority must be allowed, even in the name of emergency. Especially for most of the emergencies often brought about by measures based on expediency.

BC’s weekend reads

  1. Path-dependence of measuring real GDP?
  2. Technological creativity and the Great Enrichment (h/t Federico)
  3. The deadly serious accusation of being a “so-called judge”
  4. Why Congress isn’t reigning in Trump
  5. How did Germany and Austria’s elite musical institutions navigate the vicissitudes of early 20th-century European history? (review)
  6. Western nationalism and Eastern nationalism

How Fascism Will Come To America

John T. Flynn’s As We Go Marching was written in 1944, but there isn’t a line in this excerpt that doesn’t fit today’s situation perfectly.  I read the book many years ago and will pull it out and read it again.

Fascism will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyze opposition and command public support; marshaling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation’s greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination, all to be done under the authority of a powerfully centralized government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society.

HT: Jacob Hornberger, Future of Freedom Foundation

Flag Burning, the Bill of Rights, and Leaving America Behind: Fourth of July Special

Yes, the American Revolution was special. It’s not yet uncool to recognize facts. You are entitled to your mistaken and unsupported opinions, however; this is a free country. (Not thanks to you!)

First, there were no massacres. It may have been different if Britain had won, I don’t know. The Loyalists were treated harshly in many places. Many lost their property. Many became the English-speaking root of that milder version of ourselves, Canada. Americans were so generous-minded however that they even allowed Hessian (from Germany) mercenaries from the defeated British army to settle among them. Try to imagine any of the formerly occupied countries in Europe in 1945 allowing Russian SS from the German armed forces to stay behind and prosper! (Yes, there were Russian SS, thousands of them.)

Second, the US Constitution was and probably remains the most clear, exemplary embodiment of the healthy political idea of separating powers, a major step in uprooting the habit of despotism. (I may be wrong but I think the desirability of the separation of powers my have been enunciated earliest by the French philosopher Montesquieu. The French themselves mostly made a mess of the idea.)

Third, it took an embarrassingly long time but American constitution-builders eventually produced a wise list of specifically enunciated rights. A bill of rights is a necessity to protect political, intellectual, and religious minorities and, especially, individuals from the potential, and the very real, threat of tyranny of the majority.

The next to try a bill of rights, the French, did it only a few months later, also in 1789. With the privilege of having Ben Franklin right there in Paris to lend a hand, with Lafayette – who understood the idea well – involved, they also screwed up that one. Most of them don’t know it to this day, I think, but the insertion of one sentence in their Bill has the potential to nullify the whole: “Art. 6. La Loi est l’expression de la volonté générale.* “The Law, is the expression of the general will.” This general will, the will, the will of all, has the power to eradicate any of the individual rights carefully enunciated elsewhere in the same document. Correspondingly, today in France, there are concrete limitations on freedom of speech, for example, although freedom of speech is specifically guaranteed by the French Bill. These limitations were imposed in a carefully legal manner via acts of parliament, and signed by the president yet, they are still a form of despotism and a slippery slope. The little sentence above makes a constitutional challenge on these restrictions on speech difficult, if not impossible.

Incidentally, and going back to the US, there have been recent episodes of US flag burning by activists protesting – somehow – the Charleston church massacre. Go ahead, burn away, it’s your right so long as you don’t accidentally set afire a neighbor’s or public property! I feel forced to link this kind of petulant, childish behavior to a poll I saw recently that describes 50% of millennials as wishing to emigrate, to leave this country.** So, after voting massively for Mr Obama seven years ago, they want to escape the massive failures of his administration instead of staying put and contributing to reverse them. One the failures imputed to Mr Obama is wage stagnation. It has frozen many thirties-something in place, economically speaking. I am not sure it’s fair to blame Mr Obama but it’s done to every administration.

I know quite a bit about emigration/immigration as you might guess. So, I will presume to give potential emigrants advice: You may move to Australia, my friends. Australia will be glad to have you. The country is an admirably successful redneck project. You will enjoy the Australians’ great pubs. Of course, there is a good chance that the first night out to one of the pubs, you will open your mouths too wide. Then you may well end up beaten to a pulp in some dark alley. I don’t wish you such a fate; I disapprove of such rowdy behavior. If it comes to my attention, in the news or in the newspaper, I will not laugh openly. There will just be a little smirk on my face.  Have a good trip.

* 1789 Déclaration universelle des droits de l’homme et du citoyen

** Ordinarily, I am the first one to point out that fewer than two convergent polls from respected sources is nothing. So, take this with two grains of salt.