 |
| Image credit. |
Continued from here.
7. Political Scarcity[1]
At the bottom of anti-democratic tendencies in
Austrian-inspired liberalism is the fallacious notion that markets can do the
job of the political system.
Markets have evolved to help manage economic
scarcity; however, they are not capable of resolving the problems of political scarcity, by which we mean the
lack of unanimity on political, moral,
religious or other issues considered vital by people willing to assert
their stance vis-à-vis opposing parties.
There quite simply is no such thing as a market in which it is possible to resolve absolute political dichotomies.
There does not exist a market to buy, say, “prohibition” for those who insist on a nationwide stop of alcohol consumption, while at the same time enabling the sale of “free consumption of alcohol” to other groups, who oppose socially imposed teetotalism.
There quite simply is no such thing as a market in which it is possible to resolve absolute political dichotomies.
There does not exist a market to buy, say, “prohibition” for those who insist on a nationwide stop of alcohol consumption, while at the same time enabling the sale of “free consumption of alcohol” to other groups, who oppose socially imposed teetotalism.
7.1 Why Markets Are No
Substitute for Politics
A market transaction presupposes not only that
two parties have recognised a mutually advantageous trading opportunity, but also that there is no internal or externally imposed conflict
between them that inhibits exchange.
A market transaction does not create concordance between the trading parties; rather it presupposes the compatibility of their respective interests and the possibility of peaceful exchange.
Market transactions are not a means to overcoming conflict, instead they are being engaged in to take advantage of mutually complementary benefits already present, when no conflictive circumstances prevent them from transacting with one another.
By contrast, elections, for instance, though in principle they may register (not create) unanimity, i.e. complete concordance, are preponderantly a procedure resorted to in the face of conflict and disagreement, and are intended to serve as a means of mitigating rivalry.
Political scarcity occurs when concordance is scarce. Elections are one of the means tried to attenuate the inconvenience, nuisance, or blatant danger of unresolved disagreement in a group of people. In a large class of cases, when we are faced with political scarcity, we cannot help but apply non-market procedures. These may be rather imperfect, but comparing them to a spurious ideal is not helpful.
Politics is about managing rivalry and compromise.
Markets are about bringing together perfectly fitting interests.
Politics and the state are more fundamental than economics in that they are instrumental in controlling more factors vital to individuals and humankind than can be achieved by “well-behaved” market transactions.
The options for economic behaviour are set by politics and the state.
A market transaction does not create concordance between the trading parties; rather it presupposes the compatibility of their respective interests and the possibility of peaceful exchange.
Market transactions are not a means to overcoming conflict, instead they are being engaged in to take advantage of mutually complementary benefits already present, when no conflictive circumstances prevent them from transacting with one another.
By contrast, elections, for instance, though in principle they may register (not create) unanimity, i.e. complete concordance, are preponderantly a procedure resorted to in the face of conflict and disagreement, and are intended to serve as a means of mitigating rivalry.
Political scarcity occurs when concordance is scarce. Elections are one of the means tried to attenuate the inconvenience, nuisance, or blatant danger of unresolved disagreement in a group of people. In a large class of cases, when we are faced with political scarcity, we cannot help but apply non-market procedures. These may be rather imperfect, but comparing them to a spurious ideal is not helpful.
Politics is about managing rivalry and compromise.
Markets are about bringing together perfectly fitting interests.
Politics and the state are more fundamental than economics in that they are instrumental in controlling more factors vital to individuals and humankind than can be achieved by “well-behaved” market transactions.
The options for economic behaviour are set by politics and the state.
Writes Armen Alchian:
“I know of no way to reduce the
prospective enhancement from greater political power-seeking, but I do know
ways to reduce the rewards to market-oriented capitalist competition. Political
power is dominant in being able to set the rules of the game to reduce the
rewards to capitalist-type successful competitors. It is rule maker, umpire,
and player … But I have been unable to discern equivalently powerful ways for
economic power to reduce the rewards to competitors for political power!”[2]
8. SO1 ‑ Subset
of SO2
The spontaneous
order of free markets (SO1) does not cover all evolutionary
adaptations serving to deal with challenges arising from human interaction in
large communities.
It is a different sphere of spontaneous order ‑ (SO2), precisely the area ignored by Hayek as an object of research into self-generating order ‑ that provides the substratum in which SO1 is embedded.
Markets are a derivative of SO2, the spontaneous order of politics and the state, in which conditions may or may not evolve that are sufficiently peaceful and tolerant of the individual to allow for voluntary and mutually beneficial transactions of the type constituting free markets.
It is a different sphere of spontaneous order ‑ (SO2), precisely the area ignored by Hayek as an object of research into self-generating order ‑ that provides the substratum in which SO1 is embedded.
Markets are a derivative of SO2, the spontaneous order of politics and the state, in which conditions may or may not evolve that are sufficiently peaceful and tolerant of the individual to allow for voluntary and mutually beneficial transactions of the type constituting free markets.
It is an illusion to think that markets create
peaceful reciprocity; functioning markets always presuppose a political order
that does well at managing political scarcity.
Within SO2
competitive processes develop to deal with contentious issues that can not be
settled through the means of market exchange, especially regarding
- the cultural validity and political prevalence of rival values, objectives, and interests, as well as
- the manner in which diversity and divergence of these fundamental convictions are to be managed so as to minimise violence and strengthen trust in a community in sufficient measure to make free markets and a civil society possible.
8.1 Hayek’s Fatal Conceit
It may well be liberalism’s or, indeed, Hayek’s
fatal conceit to place too much confidence in the idea that a strict
application of the conditions of free markets and a widening of the web of
economic transactions provide a viable alternative to the political order. In
point of fact, however, there is no escape from the spontaneous order of politics and the state. This is why
liberalism must take on the challenge posed by the inevitability of politics and the state, as we shall
argue more fully in our conclusion.
9. Hayek’s Erroneous Concept
of a Private Law Society
The truncated nature of Hayek’s theory of
spontaneous order affects his theory of law in at least two ways:
(1) His conception of law is situated on a very high level of abstraction which he never leaves to investigate vital issues on lower levels of abstraction. Hayek keeps referring to “generally applicable abstract rules of just conduct”[3] as the be-all and end-all of a harmonious legal regime, but there is little to be found in his works on the way in which “the rules of just conduct” are to be interpreted and complemented in the face of concrete legal puzzles[4] – the intermediary conditions that we have mentioned above as being vital, yet largely disregarded in Hayek.
His sketch of the basic principles of the rule of law is hardly specific enough to substantiate a material rule of law, i.e. a law that embodies the ideological demands of liberalism, as opposed to a formal rule of law, a set of legal procedures by and large applicable to regimes of differing political orientation.
One is at a loss as to what observance of the rules of just conduct might actually require of the affected in a concrete case. Again, Hayek does not seem to ever expose his highly abstract legal principles to the challenge of intermediary conditions.
(2) Rather than investigating the intricate dynamics of SO2 to which man is inescapably wedded, Hayek is eager to give an account of liberal law as a powerful instrument capable of liberating the individual in large measure from politics and the state.
(1) His conception of law is situated on a very high level of abstraction which he never leaves to investigate vital issues on lower levels of abstraction. Hayek keeps referring to “generally applicable abstract rules of just conduct”[3] as the be-all and end-all of a harmonious legal regime, but there is little to be found in his works on the way in which “the rules of just conduct” are to be interpreted and complemented in the face of concrete legal puzzles[4] – the intermediary conditions that we have mentioned above as being vital, yet largely disregarded in Hayek.
His sketch of the basic principles of the rule of law is hardly specific enough to substantiate a material rule of law, i.e. a law that embodies the ideological demands of liberalism, as opposed to a formal rule of law, a set of legal procedures by and large applicable to regimes of differing political orientation.
One is at a loss as to what observance of the rules of just conduct might actually require of the affected in a concrete case. Again, Hayek does not seem to ever expose his highly abstract legal principles to the challenge of intermediary conditions.
(2) Rather than investigating the intricate dynamics of SO2 to which man is inescapably wedded, Hayek is eager to give an account of liberal law as a powerful instrument capable of liberating the individual in large measure from politics and the state.
Influenced by Italian legal scholar Bruno Leoni,
Hayek’s conception of a private law society implies that law is or ought to be
made in a process where judges deal with the concerns of parties to a case, but
not with concerns of third parties or society at large.
[J]udges or lawyers or others in a similar
position are to intervene only when they are asked to do so by the people
concerned [and] the decision of judges is to be effective mainly in regard to
the parties to the dispute, only occasionally in regard to third persons, and
practically never in regard to people who have no connection to people who have
no connection with the parties involved.
So that basically you can go about
your business, and if everything works, fine, you never have to call in the
state. What this means, Leoni observes, is “that the authors of these decisions
have no real power over other citizens beyond that which those citizens
themselves are prepared to give them by virtue of requesting a decision in a
particular case.”[5]
This is unconvincing since any
Zeitgeist-preference can enter the law, including believes in a greater role of
the state, economic steering, and social provisioning.
The very slack and contingency of Hayek’s general account of the law as a body of “rules of just conduct” highlights the likelihood of political controversy and competition playing a central role in shaping the legal regime.
One simply cannot conjure away the element of political competitiveness; it is necessary to participate in the political process to ensure that the law reflects one’s interests. And legislation will naturally be affected by this competition.
Too abstract to be a helpful guide to the concrete world of Hayekian liberalism and oblivious to the strong interaction between law, politics, and the state, Hayek’s account of the law seems to exhaust itself by labouring a point: the need and the possibility to insulate the individual from the influence of public agents.
In the absence of a theory of politics and the state, his insistence on this condition, however, begs the question as to why, to what extent, and in which manner such insulation is required.
The very slack and contingency of Hayek’s general account of the law as a body of “rules of just conduct” highlights the likelihood of political controversy and competition playing a central role in shaping the legal regime.
One simply cannot conjure away the element of political competitiveness; it is necessary to participate in the political process to ensure that the law reflects one’s interests. And legislation will naturally be affected by this competition.
Too abstract to be a helpful guide to the concrete world of Hayekian liberalism and oblivious to the strong interaction between law, politics, and the state, Hayek’s account of the law seems to exhaust itself by labouring a point: the need and the possibility to insulate the individual from the influence of public agents.
In the absence of a theory of politics and the state, his insistence on this condition, however, begs the question as to why, to what extent, and in which manner such insulation is required.
10. Open-Ended Freedom
10.1 Conscious Design ‑ Part and Parcel of Spontaneous Order
Whether political measures are concerned or
legal decisions, people do operate within SO2
by pursuing strategies of conscious design (see more in section 14.4). These purposeful activities alter
the conditions and contingent outcomes available in a free society. Not all
purposive action is detrimental or productive of unintended negative consequences.
At any rate, acting in a free society changes the nature of the conditions of freedom in unforeseeable ways. Christina Petsoulas argues that in discounting the role of conscious human intervention, Hayek positions himself outside the very tradition he claims to be a representative of:
At any rate, acting in a free society changes the nature of the conditions of freedom in unforeseeable ways. Christina Petsoulas argues that in discounting the role of conscious human intervention, Hayek positions himself outside the very tradition he claims to be a representative of:
“While they (Mandeville, Hume, Smith) do not
account for the establishment of rules and institutions in terms of
pre-conceived rationalistic design, their explanation relies on the role of
man’s faculty of understanding in selecting rules and institutions. Unlike
Hayek’s theory of group selection, their explanation can be best described as
trial and error: the process by which rules and institutions emerge is governed
by intentional experimentation. More importantly, behavioural patterns come to
be observed, not because they increase the survival chances of the groups that
happen to have fallen on them; on the contrary, rules are selected because
individuals practising them recognise their advantages, either to themselves or
to society.” [6]
Politics and the development of the state drive
the progress of freedom in a direction where political influence and political
control of politics grow in importance along with the enormous increase in the
resources and power available to the modern state.
Roughly speaking, greater freedom gives rise to capitalism; capitalism brings forth unprecedented wealth, from which arises government bigger and more powerful than ever. Government becomes a new tool, a social technology, for whose enormous capabilities there is great demand and competition. This in turn enhances the significance, need, and reach of politics.
Freedom has caused the ascendancy of big government, and the growth of big government has been conducive to the growth of freedom, as a comparison of living conditions, personal freedom, and the sophistication of civil society today with the situation in 1614, 1714, 1814 or 1914 would seem to generally indicate.
Roughly speaking, greater freedom gives rise to capitalism; capitalism brings forth unprecedented wealth, from which arises government bigger and more powerful than ever. Government becomes a new tool, a social technology, for whose enormous capabilities there is great demand and competition. This in turn enhances the significance, need, and reach of politics.
Freedom has caused the ascendancy of big government, and the growth of big government has been conducive to the growth of freedom, as a comparison of living conditions, personal freedom, and the sophistication of civil society today with the situation in 1614, 1714, 1814 or 1914 would seem to generally indicate.
10.2 Overemphasis of
Human Ignorance
Hayek is highly focussed on the implications of
ignorance in human society and the way in which SO1 helps overcome human ignorance, as prosthesis of
man’s intelligence, as it were, capable of feats out of reach for any human
mind. But he is overly focussed on ignorance:
“… Hayek pushes too hard on our
collective ignorance to the extent that it denies us the ability to make
intelligent collective judgements … It is quite clear that Hayek’s appeal to
our collective ignorance explains the dominance of free markets, but it also
leaves him unable to develop a sound theory of when collective action is
required and how it should be conducted.”[7]
To be sure, the inseparable interlocking of
freedom, politics, law, government, and the state does have its problems, that
at times can even reach catastrophic proportions, but this should rather
strengthen the desire to investigate the nature of this grown, natural, and
nondisposable web of connectedness.
Also, evolutionary products do not come with an entitlement to optimality; they tend to be well adapted to a range of conditions, but not to all circumstances. We may be able to reduce the level of violence and increase the incidence and amount of wealth in a liberal society, but civil society has not evolved to comprise qualities ensuring that political regression is guaranteed not to occur.
Also, evolutionary products do not come with an entitlement to optimality; they tend to be well adapted to a range of conditions, but not to all circumstances. We may be able to reduce the level of violence and increase the incidence and amount of wealth in a liberal society, but civil society has not evolved to comprise qualities ensuring that political regression is guaranteed not to occur.
10.3 Contestable
Nature of the Common Weal
The common weal is not subject to an
unequivocal objective standard.
People must compete for its valid meaning and the extent of its realization.
At best, the common weal will be the partial result of generally accepted processes of negotiation and other peaceful acts of competitive influencing.
According to Oakeshott’s[8] account of freedom, the extent to which she can be established is finite, varying, always incomplete, and prone to waning and waxing along the given trend line.
Oakeshott portrays the state of liberty as the result of a tug-of-war between individualists and anti-individualists. But is there not perhaps still another side to it? Might it not be the case that even the individualist, in the face of compelling reasons, does at times find herself convinced of the wisdom of instituting collective measures at the expense of personal freedom? Is it entirely inconceivable that freedom can prevail while she is enwrought with communalist exceptions to the liberal ideal of this or that reading?
There are no objective criteria by which to settle all discrepancies of assessment that may appear on the lower level of intermediary conditions. We must negotiate, canvass, compromise, compare, learn, and revise – in interminable loops of political rivalry, assertion and defeat.
First and foremost: while liberalism is well advised to maintain its overall framework on the highest level of abstraction, it ought to expose the high-level principles to the test of lower level intermediary conditions, and even change its principles if efforts at corroboration advise to do so.
Ideological preconceptions can be useful for heuristic guidance – but they must be tested against factual evidence. Thus, the classical liberal theory of the rule of law may be regarded as an exercise in reconstructing testable heuristic-ideological presumptions.[9] One presumes that certain forms of private property result in superior social outcomes, and then tests the proposition, and amends the property rights regime in cases that refute the presumption. For instance, it may prove necessary in specific instances such as the law regulating water resources (as opposed to land resources) to replace strict principles of private property by tenets of communal property.[10]
Like property rights, freedom may prove more malleable and less absolute than some liberals presume.
People must compete for its valid meaning and the extent of its realization.
At best, the common weal will be the partial result of generally accepted processes of negotiation and other peaceful acts of competitive influencing.
According to Oakeshott’s[8] account of freedom, the extent to which she can be established is finite, varying, always incomplete, and prone to waning and waxing along the given trend line.
Oakeshott portrays the state of liberty as the result of a tug-of-war between individualists and anti-individualists. But is there not perhaps still another side to it? Might it not be the case that even the individualist, in the face of compelling reasons, does at times find herself convinced of the wisdom of instituting collective measures at the expense of personal freedom? Is it entirely inconceivable that freedom can prevail while she is enwrought with communalist exceptions to the liberal ideal of this or that reading?
There are no objective criteria by which to settle all discrepancies of assessment that may appear on the lower level of intermediary conditions. We must negotiate, canvass, compromise, compare, learn, and revise – in interminable loops of political rivalry, assertion and defeat.
First and foremost: while liberalism is well advised to maintain its overall framework on the highest level of abstraction, it ought to expose the high-level principles to the test of lower level intermediary conditions, and even change its principles if efforts at corroboration advise to do so.
Ideological preconceptions can be useful for heuristic guidance – but they must be tested against factual evidence. Thus, the classical liberal theory of the rule of law may be regarded as an exercise in reconstructing testable heuristic-ideological presumptions.[9] One presumes that certain forms of private property result in superior social outcomes, and then tests the proposition, and amends the property rights regime in cases that refute the presumption. For instance, it may prove necessary in specific instances such as the law regulating water resources (as opposed to land resources) to replace strict principles of private property by tenets of communal property.[10]
Like property rights, freedom may prove more malleable and less absolute than some liberals presume.
10.4 Incompleteness of Freedom
If
liberalism is deemed to be the defence or advancement of a consummate liberal
world as against an illiberal world, the approach is fundamentally misled.
There is no liberal world, there cannot be a liberal world; there can only be a world with many liberal elements as well as elements that do not square with liberal notions.
Liberal ideas are an agenda for constructive criticism and a corrective to explain and encourage the need for proactive improvement or ameliorative rollback.
The tempting lure of liberalism is to overstretch its agenda to imply an entirely coherent vision of the good society (“freedom as blueprint”).
Liberalism is a patchwork of ideas that are conjectures open to attempts at refutation (“freedom as method”).
There is no liberal world, there cannot be a liberal world; there can only be a world with many liberal elements as well as elements that do not square with liberal notions.
Liberal ideas are an agenda for constructive criticism and a corrective to explain and encourage the need for proactive improvement or ameliorative rollback.
The tempting lure of liberalism is to overstretch its agenda to imply an entirely coherent vision of the good society (“freedom as blueprint”).
Liberalism is a patchwork of ideas that are conjectures open to attempts at refutation (“freedom as method”).
[1] We
encountered the term originally in Riker, W.H. (1982), Liberalism against Populism, San
Francisco, CA:
Freeman; pp 203-206.
[2] Alchian, A. (2006), Economic Laws and Political Legislation in The Collected Works of Armen A. Alchian, Volume 2, Property Rights and
Economic Behaviour, Indianapolis, IND: Liberty Fund, Inc, p.604.
[3] Hayek, F. (1979), p.240.
[4] Analogous problems arise in the context of the
so-called „non-aggression principle,“ a proposition that merely begs the
question what is to count as legitimate aggression and what not.
[5] Zywicky, T. (2014), When Friedrich Hayek Met Bruno Leoni, Library of Law and Liberty, (October 2014), http://www.libertylawsite.org/2014/07/17/when-friedrich-hayek-met-bruno-leoni/
[6] Petsoulas, C. (2001), Hayek’s Liberalism and Its Origins. His Idea of Spontaneous Order and
the Scottish Enlightenment, New
York, NY: Routledge,
p.7.
[7] Epstein, R. (1999), p. 288.
[8] Oakeshott, M. (1991), The Masses in Representative Democracy, pp.363-383, and The Political Economy of Freedom, pp.
384-406.
[9] Epstein, R. (1998), Principles for a Free Society. Reconciling Individual Liberty with the Common Good. Cambridge, MA:
Basic Books.
No comments:
Post a Comment