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Saturday, December 31, 2011

Rethinking Liberal Theory 5: Adam Smith, moral philosopher of the marketplace

by John MacBeath Watkins

In 1776, two important documents in the evolution of liberalism were published: The Declaration of Independence and The Wealth of Nations.

The Declaration of Independence is a political document, based on a legal system of values. It is almost entirely about who is to blame (hint: his first name was George, and he lived in a very large dwelling in England.) A great deal of it has to do with the king's efforts to keep the colonies from governing themselves. The quartering of soldiers, outlawed in our constitution, was one of the things they objected to, because they were being required to give a place to live to the very troops that were burning their towns (for example, Falmouth, Maine, located on the site of modern-day Portland, burned on Oct. 18, 1775.)

The Declaration objects to the King preventing the colonies from naturalizing new citizens, or encouraging their migration, because apparently the colonists did not regard themselves as entirely English or want only English subjects to immigrate. In short, they were saying that they were not exactly part of the English tribe, and should be allowed to absorb people of other ethnicities. That's a fundamental difference in their view of who they were, and not one the king was likely to welcome.

Adam Smith, on the other hand, was not so concerned with law, which may at first glance seem strange, because he was by profession a moral philosopher. He was at one time the Head of Moral Philosophy at Glasgow University, and his major work there was The Theory of Moral Sentiments. In short, he was a man interested in values. Through the good offices of David Hume, a fellow philosopher of the Scottish Enlightenment, he got a very well-paid position as tutor to Henry Scott, the Duke of Buccleuch, which makes me very happy to be writing this rather than trying to pronounce Buccleuch. This enabled him to travel the continent and meet such great minds as Voltaire, Benjamin Franklin,  and François Quesnay, a prominent physiocrat.

It always struck me as odd that the first widely recognized school of economics should be the physiocrats, who considered only the agricultural sector productive of wealth. This is a view they share with Confucious, strangely enough. The economic philosophy they rebelled against, mercantilism, bears in many ways more resemblance to modern economics. The physiocrats divided the world into the proprietary class, the landowners, the productive class, those who worked the land, and the sterile class, the merchants and artisans. They were influenced by Vincent de Gournay, French intendent of Commerce in the 1750s, who's motto was Laissez faire et laissez passer, le monde va de lui même! (let do and let pass, the world goes on by itself.) In Thomas Jefferson's mistrust of cities and idealization of the independent yeoman we see the influence of the physiocrats, in the Federalist advocacy for the role of the government in developing the nation we see the influence of the mercantilists.

Mercantilism focused on the balance of trade, on the wealth of kings, and the accumulation of gold. The current economic policies of China might be said to have evolved from the physiocrat phase, in which intellectuals were sent to work with the peasants because this would teach them what was truly of value, to the mercantilist phase, in which the goal is to get more wealth from the world than you give up.

But in any case, it set Smith's mind to work on the issue of how values work to produce wealth. Unlike the physiocrats, he did think merchants and craftsmen could produce wealth. Like the physiocrats, he thought people acted in their own self-interest, producing the public good as a side effect:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

But he also foresaw the concept of market manipulation:

“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

And why is this bad? Because it is an attempt to pervert the system for expressing value judgments that we've been discussing since Part 1 of this series, the value system Hobbes adapted from commerce to give secular legitimacy to sovereigns and stop the religious wars that were tearing England and Europe apart. Coercion and deception are morally objectionable because they are efforts to corrupt the system of values on which commerce is based, therefore parasitic and a threat to the system's proper functioning.

Once again, that Hobbes quotation I keep going back to:

The Value, or WORTH of a man, is as of all other things, his Price; that is to say, so much as would be given for the use of his Power: and therefore is not absolute; but a thing dependant on the need and judgement of another.

The worth of things is expressed in the marketplace with prices, and an effort to rig prices is an effort to pervert social values; a sort of lie. Smith laid out the moral justification, in other words, for anti-trust law, because one of the the intersections of the legal and market systems of value was at the points where markets were not allowed to function. Smith was not a fan of the laissez-faire advocated by Gournay, because he thought the participants in any trade would prefer to pervert the system of social values rather than have to deliver value for money. Thus, regulation of some sort was needed, but even that could be perverted.

Today, pundits like Matthew Yglesias argue that a great deal of our legal structure is designed to protect economic incumbents from competition, and Smith would have agreed, as he wrote:

The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.

So if people, for example, who do cosmetic things to fingernails and toenails say that their profession should require licensing, and the license should require X years of working in the field, we should ask if bad cuticle treatments are a major medical problem, or if this is intended to raise the incomes of people who do nails. What's important about this is that it shows Smith understood that a market is a made thing, a social artifact that can be perverted by social means such as lies and coercion. Without the legal system of values to place blame for such behavior and punish wrongdoers, could markets survive?

And if the markets are subjected to arbitrary political intervention, what begins as a political problem, described again in the Declaration of Independence...

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

... becomes an economic problem, to the point where stout merchants dress up in disguise and throw tea into Boston Harbor. If the courts are not just, but corrupted by the power and purse of the sovereign, can property be secure? If the sovereign's navy bombards your town with incendiary shot, then sends in the marines to finish burning the town, what does the deed to a property mean? The values of the marketplace can create wealth, but only when there is a functioning legal system. This is an additional problem to the notion that society is formed to protect property: Until such protection exists, even the concept of property is incoherent, and only the passion to possess exists.

In fact, to bring the discussion to the present day, I think one of the problems with modern Russia is that the advisers they brought in to help them form a market economy had lived so long in a society with functioning laws and courts, they did not realize how important these things are to the functioning of capitalism. As a result, Laissez faire et laissez passer was the motto of the new Russian state (until the oligopolists became entrenched and the state went back to being repressive.) Add to that the fact that they had spent generations convincing themselves that capitalists were gangsters, and their interpretation of capitalism soon became a society in which economic activity resembled a criminal enterprise, the courts were corrupted by those in power to reward their friends, and the wealth of the nation was lost as all the evils that old moral philolosopher Adam Smith warned of were realized.

Capitalism at its very beginnings faced a dilemma, that it needed regulation to function properly, but the regulation itself could produce mischief that would either unfairly benefit or unfairly penalize commerce. And that's important, because the system of values Smith described was a system for rewarding or penalizing behavior to produce actions that would benefit society as a whole rather than just the individual. A lack of regulation, excessive regulation, or regulation designed to unfairly benefit certain people was a corruption of the way we negotiate the meanings of our actions. Again, this goes back to Ferdinand de Saussure and his theory that language gives us the structure and categories of meanings that allow us to think in that abstract world that is so distinctively human. Manipulations of meaning make our structure of thought less coherent, and could even cause it to break down.

We speak of commercial speech in terms of advertising, but commerce itself is a kind of speech designed to answer the question, how much does that item mean to you? And if the question cannot be answered honestly because of lies or manipulation, our actions cannot accurately reflect this meaning.

Links for this series:

Rethinking liberal theory 1: Thomas Hobbes, blasphemer and patriot
Rethinking liberal theory 2: The outlaw John Locke, terrorist, liberal, and advocate of freedom
Rethinking liberal theory 3: A compact to protect property, or a conspiracy to create meaning?
Rethinking Liberal Theory 4: John Milton and the many shapes of truth
Rethinking Liberal Theory 5: Adam Smith, moral philosopher of the marketplace
Rethinking Liberal Theory 6: Mythmaking and manufacturing
Rethinking liberal theory 7: Hegel, the end of history, and the triumph of the liberal idea
Rethinking liberal theory 8: Liberalism and individualism: The invention of the Util and the way west
Rethinking liberal theory 9 Property and freedom: Why language is the basis for the social contract 
Rethinking Liberal theory 10: Physiocrats & mercantilists: The economic philosophies of the founding fathers
Rethinking Liberal Theory 11:Stateless income, global capital, and the death of empires
Rethinking Liberal Theory 12:Capitalism:So much more than market
Rethinking liberalism 13: What is money? 
Rethinking Liberalism 14: Tribalism and the emerging new world order
Rethinking liberalism 15: The poverty of neoconservative philosophy
Rethinking Liberalism 16: More on the poverty of neoconservative philosophy

Saturday, December 24, 2011

Shaw's horrors of Christmas

Dear readers:

         I thought I did not have to post this, as people could "google" it. I was wrong.

               The complete quote is only in a forgotten book of quotes.  So, real books are superior when looking for nasty things to say about this 'wonderful' holiday.


           George Bernard Shaw on Christmas: (from Our Theatres in the Nineties)

              "I am sorry to have to introduce the subject of is an indecent subject; a cruel, gluttonous subject; a drunken, disorderly subject; a wasteful disastrous subject; a wicked, caging, lying, filthy, blasphemous, and demoralizing subject.  Christmas is forced on a reluctant and disgusted nation by the shopkeepers and the press: on its own merits it would wither and shrivel in the fiery breath of universal hatred; and anyone who looked back to it would be turned into a pillar of greasy sausages." 

           As a shopkeeper I am amused....but I agree. And Shaw wrote this 110 years ago.

                And it is only gotten more terrible, what with TV and so on pounding this dreadful holiday into our heads, from October 15 on.  And who will disagree with me?


                     Regards, and

                 Happy New Year

                  Jamie Lutton


Evil Twin: The story of the second Santa

by John MacBeath Watkins

In 1976 conservative pundit Jude Waninski proposed the theory of the two Santas, and for decades since, those who followed his advice have been hollowing out our country.

Wanninski was a writer for the Wall Street Journal. He was a believer in monetarism, and also in supply-side economics. The trouble was, his theory called for the government to be starved of funds, under the theory that this would lead to vast new investment in business and produce a rising tide that would drown us, wait, good things were supposed to happen.

But cutting government spending, Wanninski observed, was not a good strategy for election. "Elect me, and I'll take away all your presents," struck him as a poor bit of messaging. Liberals were proposing to spend money on this and that, giving away tax-supported goodies like Santa. Telling people your would take away those goodies presented the Republican Party as Scrooge, who would never be as popular as Santa.

So he proposed the second Santa. This Santa, instead of promising to spend money on constituents, would promise to cut their taxes. By becoming the second Santa, the Republicans would be elected and all would be right with the world.

But wait, isn't this second Santa really a Scrooge, offering to cut your taxes but planning to take away the goodies? No no no no no no. The second Santa would never have to say he would cut services, because the Laffer Curve showed that when you cut taxes, revenues would actually increase!

Except that when they put the plan into action, the revenues never did increase, and the economic results were unspectacular. In fact, they even thought they had set a trap for Bill Clinton when they shut down the government claiming we needed to balance the budget now now now now now! Never mind that Ronald Reagan had vastly increased the debt, or that when George Herbert Walker Bush raised taxes to try and reduce the debt, many Republicans responded by sitting on their hands when he tried to get them to vote for his re-election.

Newt Gingrich and his merry gang thought the tax increase would be terribly unpopular, and would ruin the economy, allowing a Republican to take over the White House and make all right with the world again.

But something went wrong. Clinton managed to reduce the number of people on the federal payroll and raise taxes while getting government to do what people wanted it to do, and the economy boomed. Apparently, raising taxes doesn't ruin the economy if done in moderation, and trying to make government work better can pay off as well.

And what of supply-side economics? It's an odd turn of phrase, isn't it. We've heard so much propaganda on the topic that we always think that means the discredited Laffer Curve, and cutting taxes and claiming one is going to cut spending (though they never do.)

But is that all there is to the supply side of economics? Dwight Eisenhower, a general before he was a president, knew logistics. He also knew what a mess the logistics of the American economy were. In 1919, he accompanied the Transcontinental Motor Convoy from Washington, D.C. to the Presidio in San Francisco, a trip accomplished at an average speed of 5.65 mph over a period of 56 days. In the process, the men in the convoy repaired 44 wooden bridges and traveled most of the distance on unpaved roads.

Eisenhower said he thought the Interstate Highway Act of 1956 was his greatest accomplishment as president. It's an accomplishment no other president would have boasted of, because none of the others have understood as well as Eisenhower how important roads are.

The demand side of the economics of roads hadn't produced a good interstate highway system, even with businessmen, bicyclists and motorists constantly lobbying for them. But Eisenhower knew that if he supplied the country with a fine road system, the movement of goods and people made possible by that system would stimulate the economy beyond all expectation.

And not coincidentally, the period from 1956, when the Interstate Highway Act was passed, and the early 1970s, when most of it had been built, were a period of rapid economic growth for the country.

Michael Mandel of the Progressive Policy Institute has provided us with a graphic representation of what's happened since the main period of highway construction ended:

While that's been happening, we've been playing around with the second Santa, waiting for that tide that will lift all boats. We're still on the rocks.

Eisenhower, interestingly enough, did not want to lower the top marginal tax rate from 90 percent. We were paying down the national debt as a percentage of GDP and we had uses for the tax money, providing the roads industry needed and educating the workers who would do the jobs. He'd been in charge of making sure the Army had enough men, enough machines, could get what was needed from point A to point B, and he'd seen what it took to train men well enough to be useful in a great enterprise.

John Kennedy, whose father and family friends were no doubt tired of paying such high taxes, lowered the top marginal rate to 70%. Who knows, that may be where the Laffer Curve actually applies. After all, there's a study that shows that's the rate that collects the most money from the rich.

But the business of cutting the top rate to its current level of 35% was essentially a fraud. Laffer never did the work to find out where the increase in marginal rates actually could make taxes collected fall, he simply asserted that it was a lower rate than the current one, and has continued to make that assertion no matter what the current rate is.

In the meantime, the real supply side of economics, the provision of the means and the skilled workers needed to build the economy, has simply been neglected. The second Santa has taken it away.

And did the second Santa achieve his goal? Did he starve government?

Not really. George W. Bush, who lowered taxes repeatedly during his time in the White House, raised the number of people working for the government by 35%, as we discussed in this post. The whole thing turned out to be a scam.

The problem is, people like Eisenhower weren't working a scam. They expected the American people to pay for what they got, and they promised to spend the peoples' money wisely. Rather than playing Santa, they were advising the people that here was an investment opportunity that could make the country richer, how about it, are you in? And if the people weren't, the project didn't get built. Meanwhile, the national debt did this:

That's right, it was well under control until the Second Santa got his hands on the checkbook with the election of Ronald Reagan to the presidency in 1980 (Wanninski was part of his brain trust.) Those tax-and-spend liberals were, it turned out, pay-as-you-go liberals.

The damage has been done, and will take many years to undo. But first, we've got to keep the second Santa from coming down that chimney. Give the first some milk and cookies, then build a fire.

Friday, December 23, 2011

Rethinking Liberal Theory 4: John Milton and the many shapes of truth

John Milton dictating Paradise Lost to his daughters.
by John MacBeath Watkins

Our last couple posts have been about property, and my opinion that Locke was wrong to think that was the defining characteristic of human society. The basic notion of liberalism is to have a society that is suited to human nature instead of imposed upon it, so the issue is extremely important.

If the creation of meaning is, as I maintain, the defining characteristic of human society, then discourse must be central as well. The English Civil War gave us the greatest of the liberal thinkers in this, as well

John Milton is today mainly remembered as a poet, but he was also a political actor in the English Civil War, writing many tracts in support of the Puritan and parliamentary cause, eventually serving as the Secretary of Foreign Tongues for the Council of State. Under this remarkable title, he handled most of the council's correspondence in, you guessed it, foreign tongues, but also wrote pamphlets in defense of popular government and the regicide of Charles I. His clear and powerful Latin prose made him a reputation in Europe.

He also wrote one of the founding documents of liberalism, Areopagitica, the definitive (to my way of thinking) defense of free speech.

In 1644, when he wrote the Areopagitica, the war was going badly for the parliamentary forces, and their ultimate victory would only be achieved after their army was completely reorganized in 1645. In such times, rulers typically worry about what gets said and written, not just in terms of military secrets, but in terms of propaganda and morale. Parliament had the power to censor, and Milton urged them not to use it.

He had personal reasons for this. In 1643 Milton married, at the age of 35, 16-year-old Mary Powell. After only a month of living with a difficult older man, she left him and returned home. Milton wrote a series of pamphlets saying that divorce should be legal, which got him in a bit of trouble, which seems to have prompted him to write in defense of free speech. Not, mind you, that he only wanted to be allowed to continue agitating for a policy that he at the time he thought he wanted (Mary returned to him in 1645 and they had three children together, she dying in childbirth with the third.) Milton seems to have firmly believed that there should be no prior censorship for people, no matter what their views, with one exception.

We all have our limits, right? The "no censorship" rule sounds fine until some child pornographer comes along and tries to use this freedom. For Milton, there were limits as well. Anyone should be able to voice their opinions, he believed, except Catholics.

Remember, there was a war on, and it was very much about religion. The Catholic Church was so opposed to the Bible being translated into English that at one point the Bishop of London bought up as many copies as he could of William Tyndale's English translation of the Bible and burned them (Tyndale used the money to print a new edition with some correction he had wanted to make.) They hunted William Tyndale until he could be strangled, and had his remains burned so that he could not be resurrected on Judgment Day. A more forgiving man than Milton could take a dim view of that. Tyndale's translation of the Bible was the basis for what is now called the King James Bible, because the scholars who followed recognized his genius. And Milton saw the argument that censorship was a Popish import as one that would resonate with parliament.

As it happens, in my misspent youth I studied the fashionable theorists of that time, among them Jürgen Habermas, one of the leading theorists on the subject of discourse. It struck me at the time that Harbermas (whose work has been criticized by Marxists for being bourgeois) had a theory that was in many ways like Milton's, but not as well written and far less radical. Habermas, by the way, is at this writing still alive, and one of the most influential philosophers around, bridging the gap between Anglo-American and Continental philosophy, and I will say that his philosophy is far more complete than Milton's. It should be, he packs a lot into every sentence and The Theory of Communicative Action runs to two volumes that seem to weigh more with every word one reads. And that's just one of his books.

Habermas claims that if you could achieve undominated discourse, the result of such a dialogue would always produce the same answer, which would be the truth. This always struck me as a dubious proposition. What if no one present thinks of the right answer? What, we may ask, if everyone present is stupid, or at least not clever in the right way? I have a Manx named Bunny who is brilliant at being a cat, but faced with a logical argument her only response is to bring my attention the feather-on-a-string toy. In short, she is helpless before my logic. I tell her that the feather-on-a-string  toy argument is so far beside the point that she's not even wrong, but we end up playing her game in the end. I will admit that Habermas is worth any ten other theorists of the Critical School, but his logic and Bunny's steely resolve about the toy would not produce the same result as a conversation between him and Jacques Derrida. No doubt, the result would be better.

Milton had greater faith than Habermas in the truth:

And though all the winds of doctrine were let loose to play upon the earth, so Truth be in the field, we do injuriously by licensing and prohibiting to misdoubt her strength. Let her and Falsehood grapple; who ever knew Truth put to the worse in a free and open encounter?...
...For who knows not that Truth is strong next to the Almighty; she needs no policies, nor stratagems, nor licencings to make her victorious, those are the shifts and the defences that error uses against her power: give her but room, & do not bind her when she sleeps, for then she speaks not true, as the old Proteus did, who spake oracles only when he was caught & bound, but then rather she turns herself into all shapes, except her own, and perhaps tunes her voice according to the time, as Micaiah did before Ahab, untill she be adjur'd into her own likenes. Yet is it not impossible that she may have more shapes then one. What else is all that rank of things indifferent, wherein Truth may be on this side, or on the other, without being unlike her self.

Unlike Habermas, Milton was willing to accept the notion that truth "may have more shapes than one." England and Europe as a whole were rent by religious strife.  If each sect insisted that only its truth was acceptable, the strife would continue. The notion that ones countrymen could profess a different faith and not be persecuted as apostates was a path to peace, just as Hobbes' effort to find a secular path to the legitimacy of government was.

The method Milton proposed, allowing publication without prior censorship, is the basic method adopted by liberal democracies everywhere. Sure, you can be sued, fined, even jailed for saying some things, but there is a very high bar the state must achieve to justify censorship prior to publication.

The value system involved was about truth, not property. Parliament was planning to reinstate licensing laws for publishers, and you were not "the press" unless you owned one, so property rights were involved, but for Milton the search for truth was not about property at all. He even urged parliament to recognize that bad ideas must be published. In the section on the value of wrong ideas, he uses the Biblical story of Adam and Eve's fall in a way I find reminiscent of Prometheus.

Good and evill we know in the field of this World grow up together almost inseparably; and the knowledge of good is so involv'd and interwoven with the knowledge of evill, and in so many cunning resemblances hardly to be discern'd, that those confused seeds which were impos'd on Psyche as an incessant labour to cull out, and sort asunder, were not more intermixt. It was from out the rinde of one apple tasted, that the knowledge of good and evill as two twins cleaving together leapt forth into the World. And perhaps this is that doom which Adam fell into of knowing good and evill, that is to say of knowing good by evill. As therefore the state of man now is; what wisdome can there be to choose, what continence to forbeare without the knowledge of evill?

Wisdom, then, is having the knowledge of good and evil that Adam and Eve gained from the apple. What had been, in the Catholic Church, evidence of man's sinful nature, became in the Areopagitica the source of essential knowledge. The church had an entire economy of sin, of which indulgences were one small part. But in the mind of this liberal thinker, the lesson to be learned was that God wanted Adam, Eve, and all mankind to make choices, not to be denied them.

We have several intertwined sources of authority and value in our culture. The law is a system of value about who is responsible for what, one might even say, it is about who is to blame. Property is about the rights and obligations between people and the things they possess and use, one might say the meaning of things. Speech, discourse, scholarship, are all about truth, one of the most difficult and important concepts in any culture.

I like to think that truth is a word we use to describe that which we believe without question. We are not free to choose what we believe, because belief is an emotion akin to love (no wonder truth and beauty are so often seen together.) I may wish to believe my lover is faithful, but if the truth whispers through each door I close on it, seeps under the window sash when I try to close it out, I must in the end believe what I do not wish or choose to. Milton maintained that we should never close truth out.

Milton, by the way, lost his vision as he got older, probably from glaucoma. He had to dictate his later works to assistants, as portrayed in the 1826 picture above. He did not attend any religious services near the end of his life, having become alienated from the Anglican Church and objecting to the intolerance of the Dissenters (churchmen who did not accept the Book of Common Prayer.)  He was exactly the sort of person he said should be tolerated.

Links for this series:

Rethinking liberal theory 1: Thomas Hobbes, blasphemer and patriot
Rethinking liberal theory 2: The outlaw John Locke, terrorist, liberal, and advocate of freedom
Rethinking liberal theory 3: A compact to protect property, or a conspiracy to create meaning?
Rethinking Liberal Theory 4: John Milton and the many shapes of truth
Rethinking Liberal Theory 5: Adam Smith, moral philosopher of the marketplace
Rethinking Liberal Theory 6: Mythmaking and manufacturing
Rethinking liberal theory 7: Hegel, the end of history, and the triumph of the liberal idea
Rethinking liberal theory 8: Liberalism and individualism: The invention of the Util and the way west
Rethinking liberal theory 9 Property and freedom: Why language is the basis for the social contract 
Rethinking Liberal theory 10: Physiocrats & mercantilists: The economic philosophies of the founding fathers
Rethinking Liberal Theory 11:Stateless income, global capital, and the death of empires
Rethinking Liberal Theory 12:Capitalism:So much more than market
Rethinking liberalism 13: What is money? 
Rethinking Liberalism 14: Tribalism and the emerging new world order
Rethinking liberalism 15: The poverty of neoconservative philosophy
Rethinking Liberalism 16: More on the poverty of neoconservative philosophy

Monday, December 19, 2011

Rethinking liberal theory 3: A compact to protect property, or a conspiracy to create meaning?

by John MacBeath Watkins

Thanks to John Locke and Karl Marx, we've spent hundreds of years arguing about how we can achieve freedom and justice through perfecting our relationship with property.

Locke was actually following Hobbs, who realized that if kings ruled by divine right, Europe's religious divisions would tear it apart: People would not accept the divine right of a king not of their faith. He looked to the value system associated with property to shift the legitimacy of the state away from religious authority. When he said, "The ‘value,’ or ‘worth,’ of a man is, as of all other things, his price; that is to say, so much as would be given for the use of his power; and therefore is not absolute, but a thing dependent on the need and judgment of another," he was not just applying this system of value to tradesmen, where it had been applied as long as money or barter had existed. He was saying that sovereigns were to be valued because we needed their services to prevent people from killing each other. It is significant that he said this after the Thirty Years War, at the end of which Germany had about two-thirds the population it had when the war started, and the German states were still divided into Catholic and Protestant sects.

It's easy to see why Locke continued Hobbes' concern  with property. You had to have property to be a full citizen in Locke's England, so to argue for wider voting rights, he had to argue that we all possess property in our persons. Even long after his death, it was still quite normal for nations to restrict the voting franchise to those with sufficient property. Hobbes used the value system of property to give us a secular way of legitimizing government. Locke adopted the system of rights associated with property to argue that we all have rights, and no one can buy them off you; that is, your property right to yourself is inalienable.

Locke was radical enough to put his freedom and possibly his life in peril had he stayed in England, but his philosophy was based on the ideas already existing in his homeland's political culture. Even marriage and family could be viewed through the lens of property, with women as chattel and children as part of their parents' property until they came of age. Thus, Abraham Lincoln's father could rent him out for labor, the money going to his father as if Abraham Lincoln were a slave, leading to his statement, "I have been a slave." It was the simple truth, and likely had a strong effect on how Lincoln viewed slavery.

Locke was eager to expand our understanding of what qualified as property, but he never really defined property. If you've ever tried to take a chew toy from a dog, you've seen the instinct to possession that makes the institution of property necessary. But that emotional need is not itself property, any more than love is marriage.

Property is the institution that regulates our emotional attachment to objects, and defines the rights, privileges and obligations people have to things they possess or use. And when I say defines, I'm using the term more literally than you might think.

Locke maintained that society was formed to protect property, but a moment's reflection will reveal that such a system of rights can only exist once symbolic thought exists. Language gives us the categories we use to think in the symbolic manner that allows us to have such an abstract thing as a system of rights. And language, as Swiss linguist Ferdinand de Saussure pointed out in The Course in General Linguistics about a century ago, is a social enterprise.

The categories of thought that I referred to earlier are what we wish to communicate. They are, in Saussure's terms, the signified. We use words to signify them, and the sounds we choose to represent the signified are arbitrary. Call it water if you are English, call it eau if you are French, as long as your society agrees that the sound you use signs the meaning you intend, it doesn't matter what sound your society has chosen.

The fact that the signs are arbitrary, and must be agreed upon within a society, is why we have different languages for different groups of people. In fact, changing the signs so that only the "in" group understands them, as with slang, is a way of defining a group. Should a language lose a word, if for example we were to lose the world "vast," the meaning that word signifies collapses into other, existing words and the meanings they covey (so "vast" must be conveyed with terms such as "big" and "huge"), and our thought would become a little more vague. Should a new meaning come into the world, it must either have a new sign or adopt a sign already in use, as when computer programmers adopted the word "cookie" for a type of code given to a visitor to a web site, while bakers continued to use the word for something yummy, handy, and fattening.

The dog's chew toy is a concrete object (well, rubber), its willingness to defend its toy is the desire for possession, and the owner's desire to stop the damned thing from squeaking so he can get a little rest, for God's sake, gives you the conflict that needs to be regulated. In the animal world, a conflict over possession of a carcase, for example, can produce a conflict red in tooth and claw. When the pack of hyenas take the lion's game, this has occurred because of the lack of such an institution. If the lion could communicate to a higher authority that it had applied its labor to nature (the zebra, late of the Serengeti) to make the zebra its property, it could have the sheriff come and evict the hyenas from the kill.

Then, the zebra's family could sue.

In Locke's view, that's what the state was there for; to protect our property, including our lives.

But remember, prior to Hobbes, the state did not rely on such secular concepts of its purpose. Faith and force ruled mankind from time immemorial. And faith, and the ecclesiastical authority derived from it, needed symbolic thought as much or more than property did. So did kinship, another source of legitimacy for hereditary kings.

These competing systems of rights, privileges and obligations were part of the network of meaning that enabled us to have the concepts of property and the system of authority needed to enforce it. I cannot tell you which of these came first, or even whether that matters, but all are part of the structure of symbolic thought that Saussure described in the posthumously published Course in General Linguistics.

Language had to come first, and it defined the group that spoke each version of it. Language allows cultures to contain more knowledge than any one mind can contain. Language, and the world of symbolic thought it makes possible, is the most distinct attribute of human society. Language makes it possible to cooperate with members of our species not closely related to us by blood, which is very different from the world of other mammals.

So perhaps human society is not a compact to protect property, but a conspiracy to create meaning, a thing of whispers, sighs, and cries instead of inventories and bank accounts.

Links for this series:

Rethinking liberal theory 1: Thomas Hobbes, blasphemer and patriot
Rethinking liberal theory 2: The outlaw John Locke, terrorist, liberal, and advocate of freedom
Rethinking liberal theory 3: A compact to protect property, or a conspiracy to create meaning?
Rethinking Liberal Theory 4: John Milton and the many shapes of truth
Rethinking Liberal Theory 5: Adam Smith, moral philosopher of the marketplace
Rethinking Liberal Theory 6: Mythmaking and manufacturing
Rethinking liberal theory 7: Hegel, the end of history, and the triumph of the liberal idea
Rethinking liberal theory 8: Liberalism and individualism: The invention of the Util and the way west
Rethinking liberal theory 9 Property and freedom: Why language is the basis for the social contract 
Rethinking Liberal theory 10: Physiocrats & mercantilists: The economic philosophies of the founding fathers
Rethinking Liberal Theory 11:Stateless income, global capital, and the death of empires
Rethinking Liberal Theory 12:Capitalism:So much more than market
Rethinking liberalism 13: What is money? 
Rethinking Liberalism 14: Tribalism and the emerging new world order
Rethinking liberalism 15: The poverty of neoconservative philosophy
Rethinking Liberalism 16: More on the poverty of neoconservative philosophy

Saturday, December 17, 2011

On the sensuality of bookstores, the sterility of Amazon (Publishing in the Twilight of the Printed Word)

by John MacBeath Watkins

There's a controversy going on over bookstores, like whether there is any important reason to mourn their demise or support the surviving ones. To me, it is a choice between sensuality and efficiency, and sadly, I know which one usually wins in the American marketplace.

The controversy started with Richard Russo's essay about Amazon, which had just started a promotion offering a financial reward to its customers to go into brick-and-mortar bookstores and use an Amazon app for their cell phones to compare their prices to Amazon's, thereby turning the bookstores into displays for Amazon's internet book sales.

Here's Russo's take on it, and I encourage you to follow this link and read the whole thing:

I wondered what my writer friends made of all this, so I dashed off an e-mail to Scott Turow, the president of the Authors Guild, and cc’ed Stephen King, Dennis Lehane, Andre Dubus III, Anita Shreve, Tom Perrotta and Ann Patchett.
These writers all derive considerable income from Amazon’s book sales. But when the responses to my query started coming in it was clear Amazon’s program would find no defenders in our ranks.

“Scorched-earth capitalism” is how Dennis described it. “They don’t win unless they destroy their competition and then rub their noses in it.” Andre was outraged by Amazon’s attempt to turn its customers into “Droid-packing” spies. Like Dennis, he saw the move as an unsubtle attempt to monopolize the market, the effect of which would ultimately be to “further devalue, as a cultural and human necessity, the book” itself.

Stephen wrote “I love my Kindle” and noted that Amazon had done well by him in terms of book sales. But he too saw the new strategy as both “invasive and unfair.” He thought that many would see the new promotion as nothing more than comparison shopping on steroids but that, in fact, it was “a bridge too far.”

Scott supplied lawyerly perspective: “The law has long been clear that stores do not invite the public in for all purposes. A retailer is not expected to serve as a warming station for the homeless or a site for band practice. So it’s worth wondering whether it’s lawful for Amazon to encourage people to enter a store for the purpose of gathering pricing information for Amazon and buying from the Internet giant, rather than the retailer. Lawful or not, it’s an example of Amazon’s bare-knuckles approach.”
It's interesting that authors who benefit so greatly from selling through Amazon react this way. An even more interesting reaction was Farhad Manjoo's reaction to Russo. In a piece titled Don't Support your Local Bookseller, he argued buying through Amazon is better for the economy, for authors, and for readers.

Here's the nub of his argument:

Compared with online retailers, bookstores present a frustrating consumer experience. A physical store—whether it’s your favorite indie or the humongous Barnes & Noble at the mall—offers a relatively paltry selection, no customer reviews, no reliable way to find what you’re looking for, and a dubious recommendations engine. Amazon suggests books based on others you’ve read; your local store recommends what the employees like. If you don’t choose your movies based on what the guy at the box office recommends, why would you choose your books that way?
 Now, I've spent much of my life in bookstores and libraries, and I've never relied on booksellers to recommend me books (though I've recommended plenty in my day.) Nor do I rely on Amazon to do so. My preference is to wander around sort of aimlessly and rely on serendipity to lead me to something interesting. I might ask where a section is, but once I've found it, I like to explore on my own.

I think this relates to the kinesthetic aspect of knowledge. Research on whether students would prefer a Kindle with their textbooks on it or actual books showed that they learned better with old-fashioned books. Nick Carr at Rough Type points out that:
'By the end of the school year, nearly two-thirds of the students had abandoned the Kindle or were using it only infrequently. Of those who continued to use it regularly, the researchers write, "some attempted to augment e-readers with paper or computers, others became less diligent about completing their reading tasks, and still others switched to a different and usually less desirable reading technique."'
Just as an e-book strips away the kinesthetic  cues that help of navigate a text, Amazon strips such cues away from the process of selecting a book. The serendipitous searches that brought authors like Terry Pratchett and Edward Gorey to my attention would have been far less likely on Amazon. And while you can't tell a book by its cover, you can certainly tell what the publisher thought of it (though publishers are often wrong, such as the one who introduced Moby Dick as a juvenile book or the one that turned down Animal Farm because they hadn't have much luck with animal stories.)

When books were rare things copied by hand by skilled scriveners, chained to their shelves to prevent theft, scholars seldom had convenient access to a given book, so they needed to remember more. The trick they used was called a memory palace, in which they envisioned a physical structure and linked their memories to that structure. A recent Notre Dame study has also shown a link between memory and spaces. Doorways seem to be event boundaries, and passing through one takes you away from the thoughts you were having before.

A familiar bookstore or library forms a geography of knowledge that I find I can navigate more naturally than I can the Internet. The internet is wonderful for finding what I already know I want, but an intuitive search for what I might want is much more difficult, and I have yet to buy a book recommended by Amazon's algorithm.

To me, there is a sensuality in wandering through the stacks, as if I were trekking through a jungle alive with the calls of the titles, the garish hues of the potboiler's covers, the patient quiet of the academic tomes, the lush faux history of the fantasy genre, the cruel allure of the red-and-black horror books' chilling spines. Every typeface, from Bookman Oldstyle, through art nouveau, stencil, or even the reviled Comic Sans Serif, is a creative endeavor by a skilled artisan, and an artistic choice to convey what should attract a reader to a book.

Compared to the sensuality of the bookstore or library, Amazon offers convenience and sterility, a modernist, air-conditioned nightmare of efficiency and low cost. No doubt it will continue to win in the marketplace because that's so much of what we want, but don't try to tell me nothing is lost in the exchange.

More on publishing in the twilight of the printed word: 

Tuesday, December 13, 2011

Kinesthetic learning and the written word: Will our tools adapt to us, or we to them?

by John MacBeath Watkins

I've posted before about the strange human world of symbols that steals us away from the one our bodies inhabit, in this post, and mentioned the way our brains are rewired through reading in this post. One of the puzzles facing us as the world changes ever more rapidly is how our minds will be rewired as our information environment and learning patters change.

Once, an employee at my bookstore looked at a note I'd written in longhand, and said, "what's that?" She was highly intelligent and well educated, but her Montessori school had not taught longhand.

With computers, most of our interaction will be with keyboarding, and we scroll through text instead of flipping pages. But students are finding that they learn better from books, perhaps because of our relationship to the physical book. A University of Washington study found the following:

"When we read, we unconsciously note the physical location of information within a text and its spatial relationship to our location in the text as a whole ... These mental images and representations do more than just help us recall where ideas are located in a given text. We use cognitive maps to retain and recall textual information more effectively, making them useful tools for students who are reading academic texts to satisfy specific goals."
 I was aware that there's a whole school of thought devoted to kinesthetic learning, but until I ran into Nick Carr's post on Rough Type about this study, it had never occurred to me that kinesthetic learning is part of how we learn to read.

Now, my former employee isn't the only person around who didn't learn to write longhand, and in fact, handwriting generally has been going downhill for a long time, and even computer programmers worry about it. Even if we retain scholars who can interpret the handwriting of their forefathers, and do not lose a whole subset of knowledge recorded this way, the fact that we write less by hand has got to change the way our minds get wired. Now a Twice Sold Tales customer in the Netherlands, Wim Van Bochoven, tells me some friends of his have developed an app for teaching handwriting to children.

Boreaal Publishers' new app, LetterSchool, teaches handwriting with a game on a touch screen. It's an interesting approach, and one that works for teaching keyboard skills. Of course, such an app would not have been possible before smartphones and iPads came along with their ubiquitous touch screens. Which makes me wonder, are the ways we're being rewired by our electronics temporary, as the tools we use adapt to natural human learning styles, or will we have to rewire ourselves to adapt to them? And how will we know which is happening to us? The transhuman movement is optimistic about how this will change us. We are already cyborgs to a degree; I've been told the first transhuman barrier fell with the invention of eyeglasses, making people part machine, although I suppose you could go back as far as walking sticks or wooden legs.

Perhaps we'll have to find stone-age tribes uncontaminated by smartphones to learn how our ancestors' minds worked. After all, human beings have probably been about as smart as we are now for at least a quarter of a million years or longer, and our minds have been changed before.

The leap into the ethereal world of symbolic thought happened only when we had enough contact with other minds to maintain an amount of knowledge that no single brain could hold. This was the leap from personal knowledge to a structure of knowledge capable of achieving things no one brain could. Upper Paleolithic culture, where the big leap seems to have occurred, seems to have developed more than once, appearing as population density increased and disappearing as droughts, famines or plagues reduced populations below the needed density, to appear again, and permanently take (we hope) about 35,000 years ago. It has changed the way we define humanity in ways that have been very hard on those who had not attained the new culture, as we've seen repeatedly.

More on the way symbolic thought has changed us, re-defined humanity, and sometimes led to tragic results, here, here, and here.

But if we can retain some of our old wiring through the new technology, perhaps we'll stay a little more human and a little less "trans."

Friday, December 9, 2011

Asimov, Gingrich and Krugman vs the Stupidity Theory of History

by John MacBeath Watkins

According to Ray Smock, the congressional historian fired by Newt Gingrich the instant the latter became Speaker of the House, the biggest literary influence on Gingrich is Isaac Asimov's Foundation trilogy. I find this interesting, because Paul Krugman also says he was influenced by Foundation.

Whereas Krugman seems to have concluded after reading the trilogy that you could understand society so well you would know what it should do, Gingrich seems to have learned from it that one man can change history by being clever about organizing people to manipulate the ignorant masses. Both men became academics, but while Krugman has, after a brief spell in government service, sworn off the stuff and returned to academia, Gingrich is running for president.

Now, I subscribe to a stupidity theory of history. I believe that all kinds of coups, cabals and conspiracies are trying to make history, but they largely cancel each other out, and when one of these outfits does manage to pull off something it thinks will achieve its goals, unintended consequences nearly always overwhelm the desired outcome.

Watkins Corollary to the stupidity theory of history is that the more secret the organization, the more incompetent it becomes. Eventually, with no one auditing the numbers, secret operatives will find a way to feather their own nests, and those who display gross incompetence will never be replaced because those footing the bills never become aware of their incompetence.

It would be lovely to think that there is a secret order to the world, that someone is running this madhouse, but it strains my credulity to believe such a thing.

As a result, I strongly suspect that the most capable and effective actors shaping history are those who do it in the open. This is not a problem for someone with Krugman's outlook. His frustrations stem mainly from the fact that technical understandings of how society works that should be shaping public discourse get ignored, while ideas not supported by logic or evidence prevail.

Now, some would say that if Newt is influenced by Foundation, he missed the point. In fact, some seem quite incensed that science fiction could get the blame for Newt Gingrich. But the guy has given credit to the series, and as Smock points out, seems to apply the language of Asimov's masterpiece. And the question, after all, is not whether Newt got it right, and is really conducting himself like the Asimov character Hari Selden, who labored in obscurity to provide wise guides for humanity, steering us in the direction of the great and good. The question is whether he read the book and decided it was a way to justify his own megalomania.

After all, can we expect a man of Newt's nature to labor in obscurity? Obscurity is the thing he labors to avoid. But the notion that one man could, throught his genius, change all future history, does have an appeal to him, and after all, Krugman hasn't exactly courted obscurity, has he? Both men are doing their work in public. Krugman has spent his life trying to achieve the kind of understanding of how society works, Gingrich has been all over the map on how society works but consistently and diligently working on how to manipulate society. He has succeeded in making the Republican Party a powerful instrument, with the help of other disgraced politicians like Tom DeLay, and even some who were not caught up in scandals.

I have to confess, though I read the Foundation trilogy happily and enjoyed every word, my natural cynicism and stupidity theory of history led me to think there would be an agency problem with the psychohistorians. If they could manipulate humanity, and were so secret that no one could audit their finances or examine their use of power, the temptations to corruption would inevitably overwhelm Hari Selden's good intentions.

And besides, isn't there something a little Leninist about thinking that a small coterie of intellectuals should be manipulating an ignorant mass of humanity in the desired direction? Gingrich seem to regard himself as the part of the intellectual vanguard, which may say anything and do anything to manipulate the masses.

Krugman, on the other hand, seems to think that the power of his ideas should persuade people to do what they should. That may seem naive, but it's a much less dangerous idea...unless, of course, he is quietly training a secret society of Keynesian psychohistorians, primed to take humanity into a future they have designed for us...

Thursday, December 8, 2011

Rethinking liberal theory 2: The outlaw John Locke, terrorist, liberal, and advocate of freedom

by John MacBeath Watkins

By the time the British government set out to arrest John Locke, he'd set out for France, fleeing his native country under suspicion of conspiring to kill the British king, Charles II.

Yes, that's the same Charles II whose reign Thomas Hobbes went to so much trouble to legitimize. Hobbes wanted him to take his father's throne, and Locke wanted him to leave it feet first. He faced arrest as one of the conspirators involved in the Rye House Plot.

This was a plot to trap the king's carriage in a narrow street overlooked by Rye House, a sturdy stone structure, and rain fire down on it with muskets until all within died. Word got out, the king changed his route, and many of the conspirators were rounded up and several executed.

Locke was the sort of fellow the Department of Homeland Security now calls a terrorist.

Locke is remembered fondly as one of the giants of liberal theory, the man who made freedom all about property. Students forced to study his Second Treatise on Government (or even, more rarely, to actually read it) are not typically informed that the pamphlet was so inflammatory that Locke never allowed it to be published under his own name during his lifetime. Charles II might not be so sure Locke was trying to kill him that he'd send agents to France to kill Locke for the Rye House Plot, but a pamphlet that said the subjects had a right to remove their sovereign if he did not serve them well might have sealed his fate.

To understand why property was so important in Locke's thinking, you must keep in mind that at the time he was writing, the voting franchise in England was given only to people who owned real property and paid tax on it.

During the English Civil War, the Levelers had argued for equality before the law, for popular sovereignty (the idea that legitimacy of the state rests on the consent of the governed) and extending the franchise. They also advocated religious tolerance, a principle that became dear to Thomas Hobbes when he was accused of blasphemy. One way of saying that every man should have the vote (women's suffrage was far in the future) was to claim that everyone owned property in the form of their own person.

This expresses a conflict inherent in the system of value Thomas Hobbes proposed. Remember, he said:

The Value, or WORTH of a man, is as of all other things, his Price; that is to say, so much as would be given for the use of his Power...
 Which would seem to say that our values must be expressed in the marketplace, with money. Thus, your work must not only be desired, there must be effective demand, that is, demand backed by money. A starving pauper, then, would not be able to express what bread meant to him, and would not have his needs met. But the sentence continues on,

...and therefore is not absolute; but a thing dependant on the need and judgement of another.
Must need and judgment only be expressed through property? The New Model Army, raised by parliament to oppose the royalist forces, had officers who were often difficult to tell from the enlisted men, because they did not possess wealth and rich clothing. The technology of the time relied heavily on foot soldiers with muskets and teams of men working artillery pieces. The age in which a knight wearing armor that cost more than most people would see in a lifetime was nearly invincible when faced with foot soldiers (unless they carried bows and kept their distance) was a distant memory.

It was an army that relied on the infantryman for its victories, and the people who carry the arms that are decisive in putting the government in power are not to be denied a voice in what that government does, even if they lack property. If the "need and judgment" of moneyed men is difficult to ignore, how much more difficult is it to ignore the "need and judgment" of armed men?

Yet, in the end, the new king, Charles II was crowned. The property requirement for voting, far from being eliminated, was retained and eventually strengthened. In 1712, the amount of property that was required to vote was changed (it had been set at 40 shillings in 1430, when that was a lot of money) to restrict the franchise more than it had been. In 1832, when the franchise was given to men owning property worth at least £10, vastly increasing the number of voters, only one man in five qualified to vote.

Locke's radical idea was that we are all born owning ourselves, therefore we all should have the rights of citizens. Further, he asserted that these rights are inalienable, meaning some rich fellow couldn't buy them off you, because you could not sell yourself.

That last bit caused a lot of trouble. Locke was aware of slavery, and in fact was complicit in it. He was a stockholder in the Royal African Company, which was in the business of purchasing slaves in Africa and selling them in the new world. He also helped draft the constitution of the Carolinas, which established a feudal aristocracy and made a slave owner the absolute master of his slaves. He did this while serving his great benefactor, Lord Shaftsbury, a Whig who should have known better. Locke wrote the Two Treatises of Government at Shaftsbury's prompting, and in the second, laid out his theory that we are all born owning ourselves and cannot be owned by another.

South Carolina was the first state to secede from the Union, in its declaration of the causes of secession clearly stating that it had to leave the union because the North was threatening to take away its citizens' property, the slaves, and pointing out that the constitution recognized the legal status of slavery. Locke, by the way, wrote a justification of slavery in the Second Treatise of Government, which if you read it you'll find did not apply to the kind of slavery in which he was complicit.

But Locke's subversive notion that we all have some basic rights because we are born owning ourselves resonated precisely because so many didn't have those rights. And the progress toward greater liberty came because he understood that property was central to our understanding of rights, yet strangely, while Locke wrote extensively about what things and people might be regarded as property, he never defined what property is.

So let me have a stab at it.

Property is not objects, which exist whether they are owned or not. It is the rights, privileges and obligations society assigns people in relation to objects, and a system for expressing our values regarding objects. One might even say, it is the meaning of objects. We are, after all creatures who create meaning -- it is the essence of human society. Locke changed our understanding of human rights by addressing how humans fit into this system of rights, privileges and obligations.

But we should not think this is the only system of value and define all human action in the Procrustean bed of property. It is the essence of our political system that we have more than one way of expressing our values. We can express them through property interactions, directing our worldly goods toward some end, or we can express them outside the realm of property.

We express who we value as a political leader by voting, and consider it corruption when votes are bought. Voting, in fact, is meant to be a counterbalance to property rights, a way for the political sphere to correct the imbalances that can occur in property relations. After all, we've accepted Locke's notion that we own ourselves and cannot lose the rights we have as property to ourselves, but where is the effective demand if we have no money? After all, we've seen famine areas exporting food in Ireland during the potato famine and in the Soviet Union under Stalin. One man, one vote is a way of giving effective demand to people who have no power to express their values in the marketplace.

In the English Civil War, the Cavaliers supported the rights of the propertied nobility. The Roundheads, of which the Levelers were a sub-category, supported the rights of commoners. Our civil war was not so different, and we are still fighting those wars, of the propertied and their supporters against the commoners.

Links for this series:

Rethinking liberal theory 1: Thomas Hobbes, blasphemer and patriot
Rethinking liberal theory 2: The outlaw John Locke, terrorist, liberal, and advocate of freedom
Rethinking liberal theory 3: A compact to protect property, or a conspiracy to create meaning?
Rethinking Liberal Theory 4: John Milton and the many shapes of truth
Rethinking Liberal Theory 5: Adam Smith, moral philosopher of the marketplace
Rethinking Liberal Theory 6: Mythmaking and manufacturing
Rethinking liberal theory 7: Hegel, the end of history, and the triumph of the liberal idea
Rethinking liberal theory 8: Liberalism and individualism: The invention of the Util and the way west
Rethinking liberal theory 9 Property and freedom: Why language is the basis for the social contract 
Rethinking Liberal theory 10: Physiocrats & mercantilists: The economic philosophies of the founding fathers
Rethinking Liberal Theory 11:Stateless income, global capital, and the death of empires
Rethinking Liberal Theory 12:Capitalism:So much more than market
Rethinking liberalism 13: What is money? 
Rethinking Liberalism 14: Tribalism and the emerging new world order
Rethinking liberalism 15: The poverty of neoconservative philosophy
Rethinking Liberalism 16: More on the poverty of neoconservative philosophy

Tuesday, December 6, 2011

The politics of Friedrich von Hayek's fame

by John MacBeath Watkins

Some years ago, my father told me that he thought Friedrich von Hayek was the most influential economist of the 20th century.

I was a bit bemused. John Maynard Keynes, maybe, or Milton Friedman, but Hayek? He was wrong about the policy prescriptions for the Depression, while both Keynes and Friedman had important insights into that great economic disaster. He's best known for The Road to Serfdom, a book that deals with political philosophy and history rather than economics.

I've read it. He claimed that the autocratic regimes of Hitler and Mussolini were evolutions of socialism and social planning, and the best defense against such monstrous regimes was a class of business property owners. Which is a very weird argument, because Hitler and Mussolini were supported by the business interests, the German Mittelstand lasted through the war and bid on Nazi contracts, while it was the Social Democrats who got arrested.

How could he get the history wrong when it was right in front of him? And how could he gain a reputation as the 20th century's greatest economist without being anything like as influential as Keynes or Friedman?

Because it wasn't just my dad, it was and is a large part of the conservative electorate who thinks of Hayek this way. And at last, David Warsh at has given us a little history of how this happened and why it ain't right. It also has a rather devastating take on The Road to Serfdom.
"The Road to Serfdom, which appeared in 1944, was an embarrassment. Instead of adopting anti-utopian fiction, as George Orwell did four years later, in Nineteen Eight-Four, Hayek actually argued in the middle of World War II that “it is Germany whose fate we are in some danger of repeating.”  Lumping together the more ambitious vision of post-war Labor governments with altogether more modest efforts at reform that soon would be dubbed “the mixed economy,” Hayek wrote, “[D]emocratic socialism, the great utopia of the last few generations, is not only unachievable but to strive for it produces something so utterly different that few of those who now wish it would be prepared to accept the consequences.” Reader’s Digest excerpted it in the United States, and many of those who voted for Thomas Dewey in 1948 may have read it there.  But it did Hayek’s reputation as a scholar a great deal of harm."
When the University of Chicago hired Hayek in 1950, it did not do so in the economics department, because Milton Friedman was not a fan of Hayek's economics. Hayek instead got a position on the university's Committee for Social Thought. Hayek had essentially stopped being at all influential in economics. He shared a Nobel Prize in 1974 with Swedish economist Gunnar Myrdal, whose work, published mainly in Swedish and German, anticipated Keynes.

Margaret Thatcher was a fan, and Warsh describes Hayek's return to prominence:

'The recognition of the Nobel added years to Hayek’s life, at least in the view of those who knew him. (He adamantly denied that the award had anything to do with his longevity.) But it was Margaret Thatcher who plucked him from scientific obscurity and put him at the head of her parade. She had read Road to Serfdom while studying chemistry at Oxford, Wapshott says.  He describes the scene when, soon after assuming leadership of the Conservative Party, in 1974, “meeting with the party’s left-leaning research department, she reached into her bag and slammed a copy of Hayek’s Constitution of Liberty on the table. ‘This is what we believe!’” Photo ops with with Ronald Reagan followed, and Presidential Medal of Freedom in 1991.'
Intellectuals have more than one possible role. Most think that the most important is the discovery of truth, but then it comes to publicity and money, a more important role is justifying things that the rich and powerful want to do.

It is in that role that Hayek has had his greatest success.

My posts on Hayek, by the way, are here: