Chris Dillow — Hating libertarians

Chris Dillow makes some good points.

Opponents of libertarianism sometimes fail to see that freedom leads not to anarchy and chaos but to spontaneous order. Demands for immigration control, for example, are often demands for government control in itself, because people don't see how uncontrolled processes can be welfare-enhancing. They fail to see how, in John Kay's words, our goals can sometimes be better achieved obliquely.

This habit is rooted in some common cognitive biases: the illusion of knowledge and overconfidence causes us to exaggerate the benefits of state control whilst the salience heuristic leads us to see the benefits of restricting freedom more than the costs. As Hayek said:

When we decide each issue solely on what appear to be its individual merits, we always over-estimate the advantages of central direction. (Law Legislation and Liberty Vol I, p57.) 

But here's the problem. Sometimes, a benign spontaneous order doesn't occur. Emergent processes can sometimes produce inequality and exploitation: much depends upon initial conditions and institutional frameworks. If libertarians' critics overstate this, they themselves understate it.

All this might sound rather abstract, but it's not. It bears directly upon the question of how public services should be organized..

Here is how I see it. Most people that disagree with libertarian thought don't "hate" libertarians. They just think that they are wrong and their assumptions are even stupid. As a result, some see libertarianisms rising as political forces on either left or right as damaging if not dangerous.

It seems to me that the fundamental offending assumption is that of spontaneous order resulting from freedom. Libertarianisms of the left and right assume that freedom implies spontaneous order, that is, order is natural. However, there is no good evidence for this assumption and a lot of historical evidence that speaks against it. History is the record of the triumph of organization. Military, political, and economic success have all come as a result of superior organization.

As a libertarian of the left, I realize that for libertarianism to be taken seriously, the assumption of spontaneous order being natural must be confronted and the obvious objections to it considered. Rousseau's noble savage versus Hobbes's law of the jungle, for example.

The problem, I believe, lies in the concept of natural. There are two meanings of natural. The first is  that which is found operating in nature (reality). It is evidence-based. The second is theoretical. It is based on the view that individual entities fall into different categories based on their "nature" or "essence," which can be intuited. This latter notion is not based on evidence, but rather on introspection, abstraction, and generalization. It is assumed.

Evidence seems to contradict the assumption of spontaneous order arising from freedom. Whence then does the assumption arise? The answer is quite evident in the case of economics — the invisible hand of market forces. In a free market with no asymmetries, the outcomes are "natural." It is assumed that these outcomes cannot be improved upon.

Hayek gave an account for this in "The Use of Knowledge in Society," arguing that information is too complex to allow for organization being imposed. I do not wish to contest Hayek's argument about the price system being fundamental. Rather, it is the shift from economic liberalism to neoliberalism, that  is, that economic liberalism is the foundation for political and social liberalism. Or as Margaret Thatcher put it, "there is no alternative."

The "mistake" that Hayek makes is the excluded middle. He assume that there is no range between the poles of free market economy with near perfect competition and a command economy on the model of the USSR, for example. His response to the objection that there are many examples along the range is that the tendency is toward the poles and if economic freedom is compromised, then the tendency is toward extreme collectivism under state control.

The result of this "mistake" is the view that economic liberalism based on property rights is the foundation for political liberalism and therefore political rights, and also social liberalism and therefore civil rights. I put "mistake" in quotation marks above to indicate that Hayek himself did not always go this far and allowed for some government involvement in social welfare, for example, but he has often been read this way, especially The Road to Serfdom.

There is no empirical evidence to show that the middle is actually excluded, and European social democracy since WWII would argue against it. Historical evidence also shows that the extreme economic liberalism of 18th  early 19th century classical liberalism was subsequently modified to take political and social liberalism into account by balancing property rights with political rights and civil liberties, and to add social welfare. European economies did reasonably well and there was no tendency toward extreme collectivism or limitation of individual rights other than with regard to property rights, e.g., in the form of taxation and business regulation, which extreme libertarianisms summarily reject.

Homo economicus is a fiction and homo socialis operates on the basis of both independence and interdependence, competition and cooperation, and that coherence and cohesion of a social fabric are based on institutional arrangements, that is, organization. Even so-called free markets are based on legal institutions that provide organization, including the system of property rights. Far from being natural, property is based on legal rights embedded in social organization and social cohesion.

The question then becomes whether libertarianism is a viable social, political and economic theory at all. My conclusion to this is neither yes not no, but maybe. It depends on the level of collective consciousness. Spontaneous order arises from freedom to the degree that individuals are conscious of interdependence individually and in large enough numbers to be collectively conscious of interdependence.

The question then becomes one of raising the level of collective consciousness culturally to the degree that interdependence is strongly evidenced in a society's institutional arrangements. Quite evidently this begins with early childrearing and education.

Every parent soon realizes that children left "free to choose" will pursue their own perceived self-interest even when it is detrimental to themselves and others. Childrearing and education are about the process of socialization that humans go through to fit them for social life as individuals. This requires realizing that one's boundaries don't stop at one's body. Life is a web, or as we would now say, a "network" or "system."

Societies are functional to the degree this learning process is successful and dysfunctional to the degree that the socialization process fails. This is also true of parts of society since societies are organized systems in which the parts — elements and nested subsystem — affected the whole and vice versa. Societies are wholes and the dysfuctionality even one subsystem affects the holism of the entire system.

The whole is greater than the sum of the parts owing to the relationships that provide its organization, and each part affects the whole. Societies are collectively autocatalytic either functional or dysfunctional and based on the reactions. It is difficult to be a good person in a bad society, and also difficult to be a bad person in a good society, where quality is a function of social norms embedded in cultural and institutions.

Western civilization is based on the Greek idea that individuals freely choose the laws under which they live. This assumes the ability of citizens to choose wisely. In this view, therefore, a free society is a based on wisdom. This idea was later melded with the Christian view, which was derived from the Jewish Law, that love is a law unto itself (Deuteronomy 6:5, Leviticus 19:18, Matthew 22:37, Mark 12:30, Luke 10:27). As Augustine summarized the teaching:  "Love and do what you will." Love is the great unifier. Spiritually, unconditional love takes on beyond the point value of ego to realization of what lie beyond the horizon of limited ego.

The other foundation of Western civilization, along with the rise of science and technology, is Roman law, order and organization. The West was able to dominate the world based on these latter two influences. However, Western soft power arises from the former two influences, which can be summarized as freedom, truth, and love.

In this view, freedom as the pursuit of self-interest or rational utility maximization is "natural" in the sense of what the animal nature in human being is guided by whereas life in a civilized society requires transcending one's animal nature to become truly human. This is the work of a lifetime. The Greeks called it philosophia meaning "love of wisdom" as the progressive unfolding of full potential, both as an individual and as a human being. It Aristotle's view of virtue ethics it involved building character. Order is spontaneous, therefore, to the extent that it is cultured. This implies that it must be enculturated.

There is no single optimal culture that is natural. Different people will approach the challenge of becoming truly human individually and as a society differently. However, freedom is not the outcome of a 'free society," but individual freedom and a free society are the outcome of a good society as one in which citizens are striving to live a good life in harmony. There is no one best way to life a good life. Every individual and every society has to deal with its own characteristics and the opportunities and challenges that arise in the course of individual and social life.

Stumbling and Mumbling
Hating libertarians
Chris Dillow | Investors Chronicle