Opera

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Mark Twain once suggested the best way to improve on a Wagner opera is to turn it into a pantomime.

Quote of the day - Peron on A Country Being Like a Guitar

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Thomas Palley citing Juan Domingo Peron to explain his view of the Clintons:

A country is like a guitar. You pick it up with the left hand, and you play it with the right hand.

To the best of my ability, I try to keep this blog free from partisan politics. Which is why I refrain from statements that, as I see it, ask to be taken as partisan pronouncements. Of course, it is not possible to preclude that readers do read a political position into some of what is argued in this blog — irrespective of how plausible such insinuations may actually be. And, of course, a blog dealing with the social sciences cannot possibly be without political content, overt and covert. So, my ambition is rather to avoid political statements, and, when they are made, to stay away as far as possible from exaggeration, one-sidedness or outrageous ideological colouring. 

A friend of mine has recently sent me the below lines, and the video, which I publish anonymously, but with her permission. I think, her view is well worth pondering, though I do not necessarily agree with her conclusions, and certainly not with the last line of her argument:

What has most alienated me from the left, even from those among them espousing reasonable policies, is their commitment to a kind of groupthink that flatly denigrates capitalism, in fact, mostly dismissing it out of hand.

I continue to feel that capitalism is wonderful, and that in levelling deserved criticism at it, we should always be aware of its strength, beauty, and humanity. But, of course, these qualities demand that we are critical of capitalism and that we support it assuming responsibilities that we cannot expect capitalism to perform naturally.

An inability to see the imperfections of capitalism is as bad an an inability to recognise its unprecedented achievements and possibilities.

I do not think that Thomas Palley has all the answers. But he does raise issues that we better be aware of. For instance, I do think that globalisation does come with genuine dilemmas, some of which may be insoluble. Globalisation appears to have worked wonders in reducing world wide poverty; but it also poses massive challenges to the hitherto economically more advanced countries which may find it difficult to countenance the need to apply some measure of national egotism if they are to avoid major social disruptions.

It may well be that we have been moving too far into the neoliberal direction since the late 1970s, especially since the breakdown of communism, but what certainly exacerbates and complicates the imbalance is the dissolution of a genuinely social democratic left, which used to be the centre of the political spectrum in the West.

Instead a new ideological movement, which I like to call the regressive left, increasingly dominates the identity of "the left". In so far as it is actively shaping the political agenda it betrays a lack of sense of reality projecting a world without scarcity and sensitive trade-offs, as in dreams of unlimited immigration or a belief in politically correct energy sources that are insufficient to support a modern economy and therefore ultimately inimical to the environment. In so far as the regressive left is tied in with the capitalist establishment it seems well represented by the greens, who are the ideological power centre of the regressive left, and who one keen-witted pundit described as "neoliberals with bikes."

I do find it plausible that under certain conditions corporate interests will support a politics of short-termism, such as investing in heavily subsidised "renewable" energy, especially if this is the only way to stay profitable. And if politics and resourceful special corporate interests increasingly become insulated from democratic control, as appears to be the case in the EU, and derivatively on the national level — when decisions that matter are sucked upwards to some opaque and unaccountable EU bureaucracy and their lobbying entourage — we may be in for an unholy alliance between economically powerful short-termism and a politics of uncontrolled ideological zealotry.

So, from the point of view of vintage social democracy, as we knew it during the post-war period up to the 1980s, it may well be true that the new left is treating us like a guitar that it picks up with the left and then goes on to play it with the right.

See also Kapiert? (2).

Incidentally, I understand, a guitar is properly played with both hands, the left and the right.

Staatsverschuldung (3) - Schuldendienst

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Fortgesetzt von hier.

Sind die USA in der Lage, Ihren Schuldendienst zu bedienen, wenn die Zinsen steigen?

Wie die Dinge stehen, und wie uns das Beispiel Japans lehrt (siehe unten), dürfte einstweilen wohl weiterhin gelten: Wenn sie darauf bestehen, sind die Vereinigten Staaten durchaus in der Lage, die Kosten, welche ihnen im Zusammenhang mit ihrem Schuldendienst entstehen, nach Belieben zu kontrollieren. Denn es ist dem Gutdünken der amerikanischen Regierung überlassen zu entscheiden, welche US-Schuldtitel zu welchen Konditionen emittiert werden.

Niemand kann sie daran hindern, die Fristen- und Zinsstruktur der aufgelegten Anleihen nach ihren Vorstellungen zu verändern. Niemand kann die Vereinigten Staaten daran hindern, ihre gesamten am Kapitalmarkt emittierten Verbindlichkeiten auf Titel zu reduzieren mit, sagen wir, einer Laufzeit von 30 Tagen und einer Rendite von 0,35%. Solange die Bonität der USA nicht in Frage steht, dürften sich immer Investoren finden, die ihre unverzinslichen Bargeldbestände gerne gegen risikolose Papiere mit positiver Rendite eintauschen.

Betrachtet man Japan, so stellt man fest, dass selbst ein exorbitanter Anstieg der Staatsverschuldung durchaus einhergehen kann mit stark fallenden und dauerhaft niedrigen Zinsen. Länder wie die USA und Japan dominieren den Markt für ihre eigenen Staatsanleihen, wie oben angesprochen, und sind so in der Lage, die Kosten ihrer Verbindlichkeiten unter Kontrolle zu halten. Immer vorausgesetzt, dass die Wirtschaft in einem einigermaßen guten Zustand, insbesondere im Vergleich zu anderen Volkswirtschaften, verbleibt.

Zudem ist es so, dass die Staatsschulden der USA seit Längerem einen rückläufigen Trend (gemessen am BIP) aufweisen. Sie waren schon sehr viel höher, und der Staat ist nicht nur gut mit ihnen fertig geworden, er hat sie auch dienstbar zu machen gewusst für sinnvolle Zwecke (Bewältigung der Weltwirtschaftskrise, Kriegsfinanzierung im 2. Weltkrieg). Ein Anstieg des Zinsniveaus auf 5% würde den Schuldendienst auf etwa 7% des BIP anheben — deutlich weniger als die 10%, die während der Großen Finanzkrise zu berappen waren, oder die 30% während des zweiten Weltkriegs oder ähnlich hohe Zahlen in der Zeit als man die Weltwirtschaftskrise bekämpfte. Die Crux ist eben: werden die Mittel so eingesetzt, dass sie eine starke oder eine erstarkende Wirtschaft begünstigen oder werden sie missbräuchlich eingesetzt?

Befürchtungen, der Anstieg des Zinsniveaus in den Vereinigten Staaten werde zu einer unerträglichen Zinsbelastung führen sind auch schon deshalb fragwürdig, weil sie einen grundsätzlichen volkswirtschaftlichen Sachverhalt außer Acht lassen. Wann steigen denn die Zinsen? Wenn die Wirtschaft wieder zu florieren beginnt. In diesem Fall greifen die "automatischen Stabilisatoren", die in einem Wirtschaftsabschwung weniger Steuereinnahmen und mehr Staatsausgaben bedeuten, nun in ungekehrtem Sinne: die Staatseinnahmen erhören sich und die Notwendigkeit von Staatsausgaben verringert sich. 

Angesichts der japanischen Stagnation auf hohem Niveau, der volkswirtschaftlichen Selbstverstümmelung Europas durch die Einführung des Euro und in Anbetracht des Umstands, dass China ein ganz unsicherer Kantonist bleibt, ist nicht zu erkennen, dass Amerikas führende Stellung als leistungsfähigste Volkswirtschaft der Welt und somit als sicherer Hafen für Anleihe-Investoren in absehbarer Zeit ernsthaft gefährdet ist.

Fortgesetzt hier.

Staatsverschuldung (2) - Abhängigkeit von ausländischen Investoren

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Fortgesetzt von hier.

Welche Gefahr droht den USA, wenn ausländische Gläubiger US-Schuldtitel en masse abstoßen?

Was würde geschehen, wenn Saudi Arabien oder China plötzlich den Entschluss fassen würden, ihren ganzen Bestand an US-Anleihen abzustoßen?

Ich möchte behaupten, es würde eine ähnliche Situation entstehen wie wenn ein Großaktionär von Siemens die 5% der Aktien dieses Unternehmens, die sich in seinem Besitz befinden, mit einem Schlag auf den Markt werfen würde.

Nicht viel.

Unter Umständen. Und zwar unter solchen, die für unsere eigentliche Frage relevant sind.

Die Anteilseigner haben gewechselt. Nun, schön. Irgendjemand hat ja die Aktien dem Verkäufer abgekauft.

Jetzt aber das Wichtige. 

Solange die fundamentalen Daten des Unternehmens vor und nach der Verkaufsaktion unverändert solide sind, dürfte sich der Kurs höchstens kurzfristig verändern. Wenn der Markt merkt, dass jemand gezwungen ist, Aktien dringend in großen Mengen abzustoßen, nutzt er die Zwangslage aus, oder besser gesagt, die geringe Nachfrage für den Wert zum bisherigen Preis treibt ihn nach unten, bis sich genügend Käufer finden. Nach einer Weile jedoch sollte sich der Preis wieder auf das Niveau zurückbewegen, das den fundamentalen Unternehmensdaten entspricht. Im geschilderten Fall ist also eher davon auszugehen, dass der Verkäufer in Schwierigkeiten geraten ist, nicht der Emittent der Aktien.

Chinesischer Ausverkauf

Solange sich nicht der Schatten einer außergewöhnlichen Verschlechterung, insbesondere einer bedenklichen Inflation über die amerikanische Wirtschaft legt, würden wir es mit einer vergleichbaren Situation zu tun haben, wenn China mit einem Mal seinen Bestand an US-Staatsanleihen abstoßen würde.

Es ist nützlich, sich folgendes klar zu machen: China hat gewissermaßen zwei Konten bei der amerikanischen Zentralbank — ein Girokonto und ein Sparkonto. Wenn China Waren an die Amerikaner verkauft, sammeln sich US-Dollars auf Chinas Girokonto bei der Fed an. Niemand kann China daran hindern, diese Gelder unverzinst auf seinem Girokonto herumliegen zu lassen. Niemand kann China daran hindern, dieses Haben-Saldo herunterzufahren, um Käufe zu finanzieren. Aber China hat auch die Möglichkeit, die Dollars auf seinem Girokonto auf ein Sparkonto zu übertragen. Der Erwerb von US-Staatsanleihen ist in der Sache identisch mit der Einzahlung von Geld auf ein Sparkonto. Eine derartige Umschichtung hat für China den Vorteil, dass es nun Zinsen auf seine Einlagen erhält.

Wenn China seine US-Dollar-Ersparnisse aufgeben wollte, würde insofern nichts dramatisches geschehen, als dies der gleiche Vorgang ist, wie wenn Sie Ihr Sparkonto auflösen und das Guthaben auf Ihr Girokonto überweisen. Deswegen geht Amerika nicht pleite.

China würde eine reizvolle Einnahmequelle an andere Investoren abtreten, und unterhielte stattdessen Dollar-Guthaben, die keine Rendite abwerfen und täglich ein wenig an Kaufkraft verlieren.

Was zählt sind die fundamentalen Wirtschaftsdaten, und solange die unverändert bleiben, und die Regierung der USA sich per Steuererhebung gütlich tun kann an 22% des weltwirtschaftlichen Ausstoßes — so viel produzieren die Amerikaner — dürfte die Portfolio-Umschichtung der Chinesen den Wert der US-Anleihen langfristig kaum beeinflussen. Jedenfalls würde eine solche Umschichtung die USA nicht Bankrott machen und wäre per se auch nicht imstande, die weiterhin stärkste Wirtschaft der Welt grundlegend zu erschüttern. Es ist davon auszugehen, dass sich andere Investoren finden, die ihre zinslosen Dollars gerne gegen rentierliche Anleihen eintauschen. Im Übrigen sind die USA nicht von ausländischen Investoren für die Finanzierung ihrer Staatsausgaben abhängig. Wenn ausländische Investoren ihr Interesse an der US-Wirtschaft verlieren, dann deshalb, weil sie, wie Kanarienvögel in einem Kohleschacht, anzeigen, dass etwas Grundsätzliches mit dieser Wirtschaft im Argen liegt — dafür ursächlich sind aber nicht die ausländischen Investoren als solche, und schon gar nicht ihre Anlage-Entscheidungen.

Man darf ja auch nicht vergessen, dass ausländische Anleger eine zusätzliche, starke Nachfrage nach US-Anleihen von sich aus erzeugen, weil sie Handel mit den USA betreiben und — wie wir oben gesehen haben — eine rentierliche und risikolose Anlageform für die ihnen zufließenden Dollars suchen. Es ist nicht etwa so, dass die amerikanische Regierung partout darauf angewiesen ist, dass Chinesen amerikanische Anleihen kaufen. Vielmehr würden die Chinesen einen Nachteil erleiden, wenn sie auf unrentierlichen Dollarbeständen sitzenblieben.

Überhaupt, warum sollten die Chinesen sich einem Land gegenüber feindselig gebärden, das ihnen ausgiebig Gelegenheit bietet, die eigene Wirtschaft zu entwickeln. Pekings Handelsbilanzüberschuss ist eine Investition ins China des 21. Jahrhunderts.

Natürlich können die Vereinigten Staaten schwere wirtschaftspolitische Fehler begehen, die ihre volkswirtschaftliche Bonität herabsetzen. Natürlich ist es möglich, dass Amerika einen wirtschaftlichen Niedergang erleidet. Aber das ist ein anderes Thema, dem wir uns in anderen Posts widmen.

Fortgesetzt hier.

Misunderstanding Liberalism (6) - A Culture of Mutual Restraint

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Continued from here.

Moving within a range between reservation and hostility, contemporary devotees of liberalism are uncomfortable with and highly sceptical of politics, mainly working with a strong presumption against it. 

This is odd in its nearly unequivocal one-sidedness. For nothing better epitomises modern freedom's unique achievement than the new character it has lend to politics as an inclusive institution encouraging popular participation. It is a glaring sign of how much modern liberal attitudes have veered off from the posture taken by classical liberalism. 

Today's liberal tends to be rather against house-building, metaphorically speaking, because of the countless dangers it exposes the builder to, while the classical liberal emphasised the dangers of construction work to ensure that houses will be built more safely, more effectively and more numerously. 

The most notable modern distortion/misunderstanding pertaining to the original vision of freedom as spelled out in classical liberalism is due to an almost complete reversal of the belief of the protagonist thinkers in

• a powerful state, and  

• vibrant political activism 

as being the lifeblood of a free society.

In the preceding posts of this series, I argue that freedom is an adaptation to the historical trend toward individualism building up throughout the mediaeval age and eventually gaining cultural dominance in the waning years of feudalism; individualism is first and foremost a spontaneous emergence, only later to become rationalised as an ideal and a political goal. Classical liberalism is the leader in this rationalising process. The uprooting of the community-bonded individual sets in motion the story of modern liberty, which sees a secular shift

• from a model of community based on common 'honour' to one shaped and driven by personally differentiated 'interest', and 

• from man as "enactor" of static roles serving the perpetuation of a relatively stable culture to man as the active author and agent of change in a fluid, constantly evolving culture.

What is new about freedom is a broadly spread willingness among the social actors — government and citizenry — to refrain from practising intolerant dominance (of a cultural blueprint over the individual and outsiders) and to accept a novel balance of mutual restraints, such that ruling institutions are controlled by citizens and citizens are controlled by ruling institutions.

When formerly culture permeated the self and defined and dissolved its boundaries, now the self, indeed millions of selfs, stretch and change culture with their initiative and idiosyncrasies; when formerly power was separated from the populace, dominating, instrumentalising and exploiting it, now the populace permeates power.

As the division of labour keeps making progress in the course of human history, the individual qua individual — rather than qua cultural representative — emerges increasingly as part of the division's differentiated structure.  

Man is given more options freeing him to take decisions that offer him still more options, a process that builds the self as an increasingly autonomous force giving it an awareness and a material base which differentiate, estrange and finally separate him from a type of communal life that has a greater claim on his identity than he does himself. Because anthropocentric freedom — the individualistic disposition in man, see more here, here, and here — blends so well with an expanding division of labour, man qua individual becomes a new productive force. Cultivating his needs in as far as they strengthen his potential becomes an evolutionary pattern favouring certain societies over others, thus ushering in the age of individualism.   

Politics in a free society is an adaptation to the individualistic paradigm. Individualism is culture building. Politics in a free society develops into a widely ramified culture of mutual accommodation.  Individualism spawns a culture in which a new type of politics comes to play a pivotal role. Individualism's political culture cannot be reduced to elections and singular episodes of majoritarian decision making. Politics in a world of free individuals forms a continuum on which personal discretion transitions into political themes, claims and institutions. Politics reacts to the multiplication of options and choices generated by an individualistic populace, providing a multidimensional platform for social dissension and confrontation, negotiations and other forms of competitive and open-ended accommodation among agents of considerable personal autonomy. For a person to be an individual she needs room to challenge others and assert herself. In this way, she accumulates advantages and assets dear to herself and is therefore in need of protection against and consideration by others. The characteristic elements of politics in a free society are inherent in the needs of self-interested individuals and their interaction among one another: open but controlled dissension, initiative and competitive outcomes, enjoying legitimation to the extent that they leave all in a position to lead a reasonably self-interested life.

Underlying the social patterns of interlocking self-interest, the logic of mutual restraint needs two revolutionary extensions for individualism to become the dominant and stable cultural form: a state strong enough to protect individuals from predation by other individuals reverting to the model of the exclusive, sectarian community oppressive to the individual. And an effective system to monitor, police, and guide governments of unprecedented capabilities and power. What is needed is a system of mutual restraint, the core piece of which being a reciprocal order wherein the state restrains its citizenry and the citizenry restrains the state.  

Harnessing the individual thereby turning it into a wealth creator (as opposed to a low-productivity serf or a wealth-destroying predator) and a respected political participant produces a growing material base and a reliable source of popular support for the state. The citizenry, in turn, is prepared to accept restrictions on its autonomy in order to receive the public goods it desires (peace, stable property rights, privacy etc), while the state is prepared to bind itself to rules and power limits since this is the only way for it (a) to grow rich and be more capable to respond to popular demands for public goods, and (b) become genuinely respected, even well-liked and generally popular so as to keep its disciplinary tasks to manageable and reasonably civilised proportions. 

One might interpret this relationship of mutual restraint as a trade-off by which the state grows more powerful and more capable of attending to its tasks and duties, whilst the citizenry is able to better cope with the challenges posed by the historic trend toward individualism.

In a free society, politics is a discovery procedure that serves to ferret out the changing conditions of a reasonable balance between the counter-currents of collective power and individualism.

Staatsverschuldung (1) - Fundamentals

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Das Thema Staatsverschuldung ist wieder in aller Munde. Ich versuche in diesem Beitrag, der sich wahrscheinlich zu einer Serie ausweiten wird, einige Gesichtspunkte anzusprechen, die helfen mögen, das Thema etwas überschaubarer zu machen und vielleicht weniger aufgeregt zu behandeln.

Können die Vereinigten Staaten pleite gehen? 

Das kommt darauf an, was man unter "pleite" versteht. Könnten die USA insolvent werden? Nein. Als Emittent der in ihrem Hoheitsgebiet gültigen Währung, können die Vereinigten Staaten, im Gegensatz zu allen anderen Wirtschaftsteilnehmern, jederzeit ihre auf diese Währung lautenden Verbindlichkeiten bedienen. Anders als ein Haushalt oder eine Firma oder jeder andere Nicht-Emittent der Währung (zum Beispiel ein Bundesstaat), unterliegt der Währungs-Emittent keiner Budget-Beschränkung - es sei denn er erlegt sie sich durch politischen Beschluss selbst auf.

Anders verhält es sich, wenn die Wirtschaft des betreffenden Staats so stark angeschlagen ist, dass sie in wesentlichen Belangen nicht mehr funktionsfähig ist oder immerhin so wenig leistungsfähig ist, dass sie im Vergleich zu anderen Ländern unattraktiv erscheint.

Pleite gehen kann kein Land, dessen Staat souveräner Währungsemittent ist, aber wenn dessen Wirtschaft nicht viel taugt, wird dies die Bewertung seiner Verbindlichkeiten allerdings nachteilig beeinträchtigen. Das wiederum kann die Probleme der Wirtschaft verstärken. 

Die Frage jedoch ist immer, was steht den Verbindlichkeiten, die wir als Staatsschulden bezeichnen, an Forderungen gegenüber. Ein Staat mit gesunder Wirtschaft verfügt über ein gewaltiges Arsenal an Aktiven, aus denen er schöpfen kann, indem er Steuern erhebt. Die Höhe der Staatschulden sagt für sich genommen nichts aus. 

In der weltgrößten Volkswirtschaft kann es durchaus sein, dass schwindelerregende Staatschulden zustande kommen, die aber keinen Anlass zur Sorge geben, wenn sie dazu beitragen, die Leistungsstärke der Wirtschaft zu fördern. Man denke zurück an die Weltwirtschaftskrise als die Regierung der Vereinigten Staaten mit Hilfe eines enormen Haushaltsdefizits, also unterstützt durch erhebliche Staatsausgaben, die höher als das Steueraufkommen waren, die Aufgabe übernahm, eine darniederliegende Wirtschaft auf ein hohes Leistungsniveau zurückzuführen. In den "goldenen Jahren des Kapitalismus" von 1945-1975 waren entsprechende Staatsschulden fester Bestandteil des Nachfragemanagements jener florierenden Volkswirtschaften des Westens, in denen Produktivität und Arbeitseinkommen über lange Zeit gemeinsam anstiegen. 

Eine prosperierende Wirtschaft setzt eine Gesellschaft voraus, die eine große Anzahl an öffentlichen Gütern durch den Staat bereitzustellen in der Lage ist. Ihre Bereitstellung ist zwar aufwendig/teuer, aber sie macht sich bezahlt, weil sie jene Bedingungen erst schafft, ohne die eine leistungsfähige Wirtschaft nicht gedeihen kann.

So ist denn die entscheidende Frage nicht, ob wir "viel" Staat(sschulden) oder "wenig" Staat(sschulden) haben, sondern was wir aus den Möglichkeiten des Staats/der Staatsschulden machen, nicht zuletzt auch, um mit den Verbindlichkeiten des Staats die Erzeugung von volkswirtschaftlichen Aktiven zu begünstigen, deren Leistungsvermögen diesen Aufwand lohnend machen und nach Möglichkeit kräftig übersteigen.

Fazit: ein währungsemittiereder Staat — was die Länder der EU einschließlich Deutschlands nicht mehr sind — kann nicht in Insolvenz geraten, aber seine Wirtschaft und seine Währung können der Zerrüttung anheimfallen und damit die Gunst der Anleger verlieren.

Eine derartige Gefahr ist für meine Begriffe in den Vereinigten Staaten nicht zu erkennen, selbst bei bedenklichen Entwicklungen wie die, auf welche uns Thomas Palley aufmerksam macht in Kapiert? (2).

Fortgesetzt hier.

Misunderstanding Liberalism (5) — Accommodating Cultural Dislocation - The Individualistic Turnaround

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Continued from here.

I have noted in the last post of the present sequel:

Releasing the power of self-interest represents both

• an advance in "security technology" shielding man from avoidable detriment, as well as 

• a major boost to human productivity, 

always assuming that self-interests are made to interlock by social regulation.

However, unlike modern liberals and libertarians are wont to convince us, classical liberalism does not strive to replace the primacy of the (allegedly naturally evil) collectivity with the primacy of the (allegedly naturally good) individual. Instead it seeks to create latitude for greater personal autonomy in the context of a reformed collectivity better suited to an era no longer capable of supporting the (anti/non-individualistic) regimes of social cohesion that used to dominate human togetherness for millions of years: small groups, tribes, families, castes, kinship-based communities.

From a classical liberal point of view, the individual is not an end in itself. The individual remains embedded in and ultimately dominated by the rules and the nature of his social framework. The purpose of classical liberalism is to improve the quality of social relationships amongst human beings that have lost leadership and guidance by the customary institutions of a closely knit community and, for that reason, are forced by default to organise their lives as agents of increased personal independence.

For classical liberals, personal independence is not an end in itself, but a means enmeshed in a matrix of social considerations. To them, personal autonomy is but an important facet that needs to be fitted into the changing broader picture of society. In the classical liberal reading, personal freedom is valid only to the extent that it is properly regulated. Personal liberty is only sustainable thanks to normative social discipline. Personal freedom is released in controlled fashion, ever being carefully restrained, channelled and coordinated with the purpose of turning individuals into benign and productive agents that gravitate toward mutual betterment.

Whatever happened to the old forms of social interaction, man remains a social being crucially dependent on a viable mode of interacting with other human beings—a condition which always requires elements of personal subjection to the community, as well as coordinated collective action, which again tends to demand that some of the scope of individual discretion be conceded to public prescription.

Classical liberalism is about organising a society of culturally dislocated agents; it is not about the self-subsistence of the individual. 

If we want to learn more about what 

• brings forth liberty, and 

• releases more of the potential for individualism in the human being,

we must look not for personal discretion, but for socially dominant regulation— laws, norms, habits that threaten and nudge man to comply with the needs of mutually interlocking, mutually respecting, mutually conducive individualism.

Under the new rules, the individual has less to gain, in fact, much to lose, from blind group affiliation and much to gain from charting his own careful course. Should I kill my boss because he supports a different political party than I do? No, I have more to gain by tolerating his stance. A new logic of compromise and toleration emerges among people. And this changes contents and conduct in politics. Accommodation works—far better than it used to, if it did at all. People are busy building lives in close correspondence with interests that they experience as theirs. 

Initially only a few new options may become available to the culturally caged individual — say, an occupation in the city away from the manor — but choices quickly beget choices. A small number of new options paving the way to fundamentally new choices are liable to ramify into an extensive network of alternatives that undermine the uniformity of a cultural home base, confronting the person with a new found individuality, which is essentially the experience of personally ponderable or even welcome choices that challenge the wisdom of cultural probity. 

As a person gains more psychic and material assets from pursuing an individual course, rigid dedication to a uniform pattern of responses becomes more costly and less rationally appealing than in a world where personal identity is largely congruent with preordained cultural stereotypes. There is now more at stake in attempting to practise intolerant dominance over other individuals, and what is at stake is close to the heart of the person part of whom is already transcultural, i.e. attracted by intelligible and appealing perspectives that point beyond her traditional cultural purview. The same is true for the opponent, the neighbour, the friend. A possible definition of the individual is that of an multiplier of options, and individuals dealing with individuals add another dimension to the multiplication of options. With more options to act upon and more of them worth of protection against obliteration by sweeping decisions, man's dealings, and ultimately politics too, become less violent, more reserved, more negotiable, more conforming to general rules than to parochial, exclusive, sectarian, (sub-)cultural absolutes.  

In the classical liberal vision the uprooted person left behind among the remnants of the feudal world — the individual — is enlisted as a pivotal agent in a new world characterised no longer by rulers but by rules that are geared toward the promotion of 

• peace (for its own sake, rather than being an exception in a world of  mutual predation)

• heightened social intelligence (better supplies of information, better gathering, processing, and recycling of information), 

• greater scope and better incentives for collaboration and cooperation, and 

• conduct apt to increase productivity and protected wealth.

In acquiring her new persona as an individual the human being emphasises, instigates, and partakes in a novel trend whereby all members of society tend to be included in the processes of pacification, intelligence, collaboration and cooperation, as well as growing productivity and wealth creation.

Continued here.

Misunderstanding Liberalism (4) - The Individual Is a Collective Project - Self-Interest Provides Social Security and Wealth

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Continued from here.

Classical Liberalism's Hero - It Is Not The Individual

Their conception of human nature prompted the classical liberals to accord politics a pivotal position in a free society. 

Classical liberals held that — under a wisely chosen institutional regime — politics would be instrumental in harnessing the destructive potential in humans, channelling the simmering furor in them appropriately and blending it with the constructive side of man so as to gain from the mix a plentiful source of energy to fuel peaceful and productive co-existence.

Their starting point was the individual only in so far as they viewed it as highly defective in the absence of proper constraints. The ideal that they were driving at was not some sort of reformed individual whose self-reliance would furnish the building blocks from which the best of all worlds was going to be raised.

As the classical liberals saw it, for the individual to gain a station in life more beneficial to himself than in the past and for him to become at the same time a benign and productive force to his fellows, it was necessary to change the conditions under which social relations were formed in society, rather than effect the release of some magic power inherent in the individual as such.

To see through its promises, classical liberalism did not solely put trust in the independence of the individual, but recommended rules and institutions to which the individual would have to subject itself if it was ever to escape the dreadful abuse that man has been inflicting upon himself and his fellows from time immemorial. Greater personal autonomy comes into its own only after its social boundaries have been carefully drawn. 

Classical liberalism does not idealise the individual — instead it takes a sober look at man's shortcomings and seeks what remedies it can come up with to mitigate the social dramas of human imperfection.

What Is Wrong with the Individual?

Ever alert to the ambiguities of human nature, the classical liberal recognises that man is ridden with irrational desires. The extent to which humans are able to marshal what rational faculties they command is strongly dependent on social circumstances. For the longest period in human history, social circumstances do not exactly invite the currency of rational calculation that we have nowadays come to expect as a matter-of-course. In human history, men are mostly playing out a preordained identity; they are players, echoes and shadows enacting the story line of a culture forced upon them by custom and tradition. In being what they are, they follow something that is outside them, for which they kill or give themselves up. They are not in a position to assert an identity of their own, for they are lacking

• sufficient awareness of independent personhood, 

• a confident enough sense of entitlement to pursue strategies of systematic self-interest, 

• the cultural license and experience (socialisation) and 

• the material means 

to stay apart from family, kin, caste or whatever community demands their loyalty.

Man is largely without protection against cultural enlistment.

Self-regarding personal identity cannot serve as a barrier against cultural imposition.

The borders between a biographical personality and the culture into which a man is born are open; the communal traditions dictate the interests that man will adopt as his "own".

If the tribe requires him to die, it is in his interest to die. If the tribe requires him to represent the honour of the tribe and an outsider insults tribal honour, he has been insulted and it is in his interest to fight and kill to restore the balance of honour.

What is wrong with the individual? Well, the individual is hardly an individual, that is what is wrong with it.

Man is tied to the wrong kind of loyalty. It is this troublesome bondage that is the true target of classical liberalism.

Self-Interest Makes for Social Security and High Productivity

When humans lack cultural license to pursue a systematic strategy dedicated to the pursuit of self-interested goals, it does not even make sense to warn the individual that in a given situation she may not be acting in her own best interest. Extensive personal self-regard is a modern invention, a hallmark of recent liberty.

We may, therefore, contrast

• the pursuit of self-interest by free individuals in modern open-access societies with 

• the rather common exposure of communal man to severe personal disadvantage, harm, and even self-destruction at the behest of a higher cultural mystique.

Releasing the power of self-interest represents both

• an advance in "security technology" shielding man from avoidable detriment, as well as 

• a major boost to human productivity, 

always assuming that self-interests are made to interlock by social regulation.  

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Misunderstanding Liberalism (3) — Division of Labour, Individualism, and Politics

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In the below quote, Ernest Gellner reminds us of an iconoclastic argument advanced by one of the founders of sociology, Émile Durkheim (1858–1917), in his classic De la division du travail social.

In a daring, perhaps wildly unfaithful interpretation, what I take away from Durkheim is that liberalism—the attempt to think through and take advantage of the logic of an individualistic society—much rather envisions a form of 'benign collectivism' than a playing field for hard-nosed lone fighters.

Its theme is the puzzling dream of social cohesion and solidarity in a world that has recently turned us into agents in the social game far more autonomous than our ancestors have ever been. Whether you hate or welcome the new self-reliance, individualism is a condition that we cannot get rid of; it is a given of our era that we can only strive to adapt to, hopefully making it a new source of gain and comfort.   

Liberalism is trying to facilitate relationships between human beings that improve their lot by instituting better forms of interdependence and mutual considerateness compared to

• the oppressive past, when the individual was crammed into pre-established patterns, and likewise compared to 

• the ideal of the standalone autonomous self-made man attaining high status in a subsequent self-distortion of liberalism.

Writes Gellner:

What Durkheim has done was to try to take away the appeal of human interdependence and cooperation, of social integration, from the romantics and reactionaries who attributed it to earlier societies, and who deplored its decline in modern societies.

He did so by pointing out that it was primitive man who was standardised, and that it was modern man who attained, through a more highly developed division of labour, a far greater complementarity and interdependence with his fellows.

This it seemed, togetherness was the coming thing, rather than something which we were losing.

This approach also meant the theft of the idea of division of labour from the economists: its real function was not to produce more and better pins , but make us depend on each other,  in a manner more effective an d altogether superior to the one which had prevailed before.

When we were alike we had little to offer one another. Now e have come to differ, we need each other. 

Gellner, E. (1987), Culture, Identity, and Politics, Cambridge, CUP,  p.30 — emphasis in the original.

Disapproval of Self-Interest - Atavistic and Regressive

If one adopts this perspective, the habitual revulsion in certain political quarters directed at a society based on tolerance for self-interest appears atavistic, and outright regressive. It misses the new quality of solidarity made possible under a regime of freedom.

Tolerance for Self-Interest Encourages Political Activity

What I take away from and, by an aspect or two, add to Durkheim with respect to my own thinking concerning freedom and politics is that for mutually enhancing and mutually considerate relationships between autonomous self-interested individuals to unfold we rely on the expansion and intensification of political activity among human beings to the point of complete popularisation.

I refer to politics as exerting influence on one another both in the private and the public sphere. In a vein of open-ended questioning that bars no iconoclasm and provokes innovation and change.

The Scaffolding of Change - Division of Labour Encourages Individualism, and Individualism Popularises Political Behaviour

If man is to take full advantage of the growing division of labour—in fact, if the division of labour is to continue to ramify fruitfully—he, that is: anyone who cares to, must be able to participate in its creation and be free to challenge old branches of it and add new ones. Everyone is the agent of creative destruction—not only in the field of economic competition, but—in almost all dimensions of the social universe. We are still left with functional inequalities—though not vested in the superiority of a person or her station as such, but justified by defeasible effectiveness—however, these inequalities are generally considered admissible only on the basis of total equality of all citizens in their capacity as political participants and co-shapers of the community.

Division of Labour — Driving Force of Individualism

Individualism is a self-enforcing, self-perpetuating, self-expanding historic trend at this stage in the development of human society. What its successor will look like I have no idea. Its driving force is the division of labour, the ability of society to generate means of sustenance sufficient to let increasing numbers of the community depart from the formerly common task of ensuring alimentation and increasingly occupy themselves with entirely new specialised skills.

The all-purpose human becomes an asset of growing value once the division of labour gains self-sustaining, self-widening momentum. The new tolerance for, in fact, the new need for all-purpose humans appreciates and leverages the individualistic qualities enclosed in human nature since time immemorial. It has become useful to society to let the individual out of the cages of custom and ordained status. So much so that societies that suffocate and disprize individualism sooner or later lose out vis-à-vis their more individualistic competitors. Epochal individualism is one of the most powerful attractors in "the corridor of success" which ensures—by oscillation around and reversion to the mean, i.e. the line-up of strong attractors—that societies reasonably advanced on the way to freedom do not stray too far from her.

Summary

Seeking political influence is a natural desire and indispensable prerequisite in a society with a division of labour so highly developed as to bring forth and continually enforce individualism.

This is why a free society is not the answer to a politicised society—a hope ardently entertained by liberals. A free society is by its very nature the most politicised kind of society ever to have prevailed among human beings.

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Misunderstanding Liberalism (2) — A New Paradigm for Human Solidarity

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Liberalism Is about a New Paradigm for Human Solidarity

The essential point that I am trying to get across in the present post is that the pioneers of liberal thought did not present a philosophy intended to idealise the individual. To the contrary, in recognising her position in the dawning age of individualism, they hoped to outline the contours of a new form of community. Liberal society was to give rise to a form of human solidarity adapted to the specific features of the new individual, who was increasingly detached from preordained status and increasingly had to take responsibility for countless aspects of his life that used to be predetermined for her by tradition, custom, status, and absolute authority.

Liberalism Gives Expression to an Inexorable Historic Trend

While there is a voluntaristic element in the emancipation of the individual — with liberals playing a leading role in demanding rights that strengthen the autonomy of the individual — individualism emerges as a historical force that no one intended, let alone designed, to take the specific forms it was going to take or to advance to the point of total cultural dominance that it has achieved in the Western world.

In that sense, original liberalism was part of a broader historical reaction, rather than an intellectual whim or conceit; it served the general adaptation of mankind to the ascent of individualism whose propagation began to accelerate once the decline of the feudal world had set in, giving way to the rise of the money economy and the opening up of new avenues for social mobility that freed men from the feudal manor, confronting them with a growing frontier of personal options in determining the course of their lives. 

This is also why in its latter career as an ideology, liberalism would become ineffective and marginalised—it no longer gave expression to an inexorable historical trend, but became a flawed commentary to its original meaning, a philosophical whim and conceit with no roots in reality. 

Liberalism Is about a New Form of Human Community — It Is Not about 'Rugged Individualism'

Liberalism is about coordinating the brotherhood of self-interested men. It is about answers to the question: how can we live together, form a peaceful and productive community, when everyone of us enjoys unprecedented scope for autonomous action? In the original liberal vision the "I" is always conceived of in its agreeableness with the "We". Hence, liberalism' s support for a strong state capable of delivering unheard-of public goods, its support for mass political participation, and its support of the right of everyone to pursue their self-interest in peaceable, mutually respectful, and coordinated fashion—as I have argued in Misunderstanding Liberalism (1) —State, Individual, Constitution, Democracy , and Self-Interest.  

Liberalism Is about the Most Politicised World There Ever Was

Ultimately, what I am most interested in presently are the implications of all this for the relationship between freedom and politics (being occupied as I am with writing up the chapter "Politics" of my manuscript Attempts at Liberty).

I had defined politics as activities aimed at gaining social acceptance for one's projects, thoughts, and and values. Politics is the strong human disposition of influencing your social environment in your favour taken to the level of community or society at large. 

The crucial point is this: individualism means that ordinary humans are constantly called upon to express, defend, and assert their interests in a world where everyone else does the same. In pre-individualistic times, we were far more other-directed (fremdbestimmt) than we are today. There is still a non-trivial residual of being other-directed today, but the pressure and the need is stronger and the range of options incomparably wider to act in self-regarding, self-interested ways.

The core impulse of politics, the exertion of influence so as to make people comply with and socially accept one's desires and interests is being exercised by every individual every day  as  a matter of course.  We have become, more than ever, the zoon politikon, the political animal.

Our society is more politicised than any other society before, and this is due to liberty, the form of adaptation that we have stumbled upon to cope with the inexorable individualism of our epoch. This holds true irrespective of the degree to which ordinary citizens actively partake in public politics. We all expect to be entitled to question, challenge, correct and change the social status quo either by exercising our rights in private environments or in the public. To be an individual, a free individual entitles one to practice politics both in our private spheres and in the public arena.

Which ties in with my definition of freedom as an effort at striking a balance between (a) the practice of mass dissension and (b) engaging in rites and rituals of pacification robust enough to prevent mass dissension from becoming explosive and disruptive. It is hard to extend the meaning of freedom beyond achieving such a dynamic equilibrium, and it becomes exceedingly problematic to make claims on behalf of liberty with regard to specific ideological preferences, say, regarding the minimum wage or abortion etc.

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