Saturday, February 12, 2011

Thoughts on two comments

Gary Gunnels, Ayn Rand, and Libertarianism
Gary has this thought on my post on the new Atlas Shrugged movie: "It just illustrates how libertarian the world has become. When Rand was writing her major works they were a slap in the face to the dominant paradigm. It was a bit like being an atheist in the 18th century. Now Rand pervades the culture so much that this movie doesn't seem so radical", and seems to have largely missed my point about "ideological orthogonality" (and maybe I'm not communicating the idea clearly). It strikes me as weird to say we are more libertarian today because we like markets more - because Americans generally don't flirt with socialism the way they did in the 20s, 30s, 40s, and even into the 50s. If we replaced that America with a libertarian America, then Gary would have justification in saying the world has become more libertarian. But that's not the case. In America and in most of the rest of the world we replaced a brief flirtation with socialism with a solid and stable commitment to social democracy. I hate to break it to my readers, but Randians and libertarians aren't the only ones that like markets. I don't think this trailer struck me as banal because we are more libertarian - I think it struck me as banal because in this world of market-oriented social democracy that we live in Atlas Shrugged seems pretty pedestrian. Gary views a continuum of sorts between collectivism and libertarianism, so from his view it seems like we've moved towards libertarianism. Yes, we embrace markets a lot more now than we did earlier in this century. But it seems odd to pick out one relatively small ideological perspective that embraces markets and say we've move closer towards it just for that! Wouldn't it make more sense to say "we've moved more towards market-oriented social democracy" than "we've moved more towards libertarianism"?

Gary seems to think that in the debate over markets, there's the libertarian side and the non-libertarian side, so if you're not on the non-libertarian side you must be "more libertarian". That's like saying in the debate over progressive income taxes there's a Communist side and a non-Communist side and if you're not on the non-Communist side you must be "more Communist". Sorry - I like my progressive income tax and my profit seekers in a free market, and I haven't moved to be "more Communist" or "more libertarian" - I am "more market-oriented social democrat". But I am glad to see that Gary at least embraces a portion of the market-oriented social democrat platform. It's good to see that he's "more market-oriented social democrat" than some others are.

Prateek Sanjay, Keynes, Evolution, and Classical Economics
In my post on Darwin, Prateek responds to the selection from The End of Laissez Faire with: "I have never, ever, never, ever heard any single free market economist, whose book I have read, trace his views down to Darwin. Even economics books by pro-market progressives or other political affiliations never do that Darwin analogy." I whole-heartedly agree with him and assured him I'd clarify what I think Keynes was trying to say. So I never read where Keynes suggested that economists "traced his views down to Darwin". I could be wrong, but what I thought Keynes was trying to say was that there was a powerful confluence of ideas in the second half of the 19th century that fit together very easily. Classical economics (indeed almost all the economists Keynes cited) was already well established by the time Darwin came along, so clearly he's not arguing they trace their ideas to him. In fact, Darwin traced some of his ideas to the Classical economists, particularly Malthus (who was the most Keynesian of the bunch!). I like to frame The End of Laissez Faire as Keynes's genealogy of classical liberalism. Keynes is describing and lamenting the bifurcation of liberalism into two camps: communitarianism and individualism. The bifurcation itself isn't especially problematic for Keynes. These two strains have always been in tension and it has been a creative tension. Keynes's concern is that they have separated, stopped engaging each other, and thereby degenerated into two very impoverished orthodoxies: laissez-faire and socialism. Real liberalism, for Keynes, is the primary victim of this bifurcation. So that is the context of the book.

What I think Keynes was trying to say about Darwin was that a major spur to the evolution of laissez faire is that you had this more individualist orientation of classical economics and Victorian laissez faire bolstered by Darwinism, which seemed to provide license to Social Darwinism and a ruthless individualism. I don't think Keynes ever argues that that's what gave birth to Classical Economics. I don't think Keynes ever argued that that was what Darwinism implied. But the coalescence of all these ideas in the second half of the 19th century made a degeneration of classical liberalism into laissez faire possible. It has been perhaps a year since I last read The End of Laissez Faire, but I think this is what he is saying in this passage.

Now, that having been said I don't think Prateek should be so pessimistic about bringing Darwin into a market-oriented perspective on economics! Darwin does not give license to Social Darwinism. But Darwin does provide us with a very powerful mechanism for emergent order in complex systems. When you have variation, the prospect of failure, and time you have the possibility for evolutionary selection. "Natural selection" for Darwinism, but we can think of this as social selection or market selection. Firms that fail the market test will die. People who assemble the wrong combination of human capital will not do well in the labor market. Thankfully, we don't have to rely on random variation for this to produce a better and stronger economy over time. We can add learning and anticipation to the mix. Unlike the ape in the jungle who is born with the equipment to survive or not survive, humans and firms can acquire the means for survival. We talk about "the rough edges of capitalism", and indeed there are a few. But our ability to learn and anticipate actually means that capitalism does away with "the rough edges of the law of the jungle", which confine organisms to the traits they were born with! So I agree with Prateek, market economics isn't some base, objectionable, twisted Social Darwinism. That gives market economics too little credit and Social Darwinism too much. But there is an important role for evolutionary thought in economics.


  1. ""It just illustrates how libertarian the world has become."

    Here's the way this works: when a libertarian wants to assert relevance, s/he says, "Look how much things have become libertarian." But when things go wrong and there is blame to be apportioned, then it is asserted, "Of course, we don't live at all in a libertarian world!"

  2. Mr. Callahan, I think that's simply called unfalsifiability.

    It's totally arbitrary to take a measuring stick and say such and such is the increase in "liberty" or that a certain shortfalll in quantum of "liberty" is causing a problem.

    Yes, it's a bad argument. But then, there is that even more interesting argument that those "libertarians" (silly American words!) seem to have made - that it's markets and capitalism which have led to increase in social democracy. Or at least, Margaret Thatcher said so in her last PMQ in Britain - she tripled social spending, only because she did some liberalizing of industry to generate tax revenues.

  3. "Wouldn't it make more sense to say "we've moved more towards market-oriented social democracy" than "we've moved more towards libertarianism"?"

    No, because that is exactly what we are moving away from (a market oriented social democracy). This is more apparent in saw Sweden than it is in the U.S.

    Gary seems to think that in the debate over markets, there's the libertarian side and the non-libertarian side, so if you're not on the non-libertarian side you must be "more libertarian"."

    There is a continuum, and that continuum has shifted to the "libertarianish" outlook - across a whole range of subjects.


    When the ongoing, disastrous drug war continues to cause mayhem and eat away at individual liberty that isn't the fault of libertarians. So yeah, a lot of liberty has blossomed despite what the state minders have intended.

  4. Ron Paul at CPAC:

  5. I'm sorry, Gary. Worker's compensation in various states in the late 1800s, Social Security, unemployment insurance and AFDC in the thirties, highways in the fifties, Medicaid and Medicare in the sixties, the EITC in the seventies, TANF in the 1990s, and health reform today.

    Each of these programs has been changed and improved over time - not a single one dropped (unless you count swapping AFDC out for TANF). How, exactly, do you suppose we're moving away from a market-based social democracy?

  6. The above post is the very definition of hero worship. In a totally unrelated blogpost, somebody posts a comment linking to a Ron Paul speech, for god knows what reason. :)

    Just joking. But gosh, that one just comes out of nowhere.

  7. Highways in the 1950s isn't a very good example since they were funded by the users of the system; this is why it has largely been so successful. People who use it pay for it. Of course there has been a concerted effort of late to siphon off funds for such for boondoggles like light rail, so-called high speed rail, etc.

    Social Security also isn't a terribly good example because (a) it isn't means test and (b) it is largely a failure (which is why no one in their right mind depends on it for retirement). Like all the unfunded Bismarkian public pension systems it is on life support.

    The list goes on.

    "How, exactly, do you suppose we're moving away from a market-based social democracy?"

    Because none of those policies actually work as initially conceived, none of them are particularly sustainable, and each creates a plethora of pathologies that supporters are constantly trying to downplay. So what people do is elide past these systems so as to avoid them.


    Or alternatively I'm sending a link Daniel's way because Daniel seems to be interested in what Paul has to say. Your comment is the very definition of psycho-babble and uninformed assumptions.

  8. Prateek,

    In other words, you don't know me from Adam's off ox; quit assuming otherwise.

  9. Daniel,

    And of course technology allows us to watch the watchers so to speak:

  10. "Real liberalism, for Keynes, is the primary victim of this bifurcation. So that is the context of the book."

    That seems like so much logomachy to me. Hey, you laissez-faire types aren't "real liberals" because you don't agree with my definition of liberalism.

    "But the coalescence of all these ideas in the second half of the 19th century made a degeneration of classical liberalism into laissez faire possible."

    Classical liberalism must have "degenerated" into "laissez faire" much earlier than that, because David Hume (the greatest of the figures of the Scottish Enlightenment) was an advocate of laissez-faire from the 1750s onward. I am fairly certain that Hume would have viewed Keynes as merely a return to the mercantilist attitudes that Hume argued against the whole of his intellectual life.

  11. Gary - this of course depends on the definition of "laissez faire". I'm an advocate of it under some definitions and not under others. Keynes argues that the case that was made for laissez faire became quite impoverished in the hands of late 19th century advocates compared to late 18th century advocates.

  12. Laissez-faire, in its original French usage, was not created by political doctrine, but practical reality. France had choked itself off from the rest of the world with its trading practices, which is why they decided that beyond a point an endless spiral of top-down economic design and experimenting had to be stopped.

    Laissez-faire as a commercial policy of government and liberalism as a theory of government were once two separate things, but may have converged later.

    As I understand it, liberal theory of government believes politics to be a process of reconciling interests. Of course, laissez-faire capitalism makes all that irrelevant. Say, under a liberal government there might be debates on libel laws. Two sides wanting two different libel laws will see one lose and the other win, or at least a half-victory for each. It's a zero sum game. On the other hand, in capitalism, there is no debate on whether people will use PC or Mac, because in capitalism, people can buy and use both. Moreover, a liberal government rests on having liberal people. Capitalism never required anybody to believe in anything.

    In that sense, liberalism and laissez-faire seem two different things.

    (PS: Sorry, Gary!)

  13. I've actually had similar thoughts to Gary's comment that you highlight, Daniel.

    In the one Ayn Rand book that I have read ("The Virtue of Selfishness"), I was constantly fighting a sense banality. Or, to put it less strongly, her arguments left me a rather underwhelming impression on me... Apart from fixating on what I regard as meaningless semantics, the world she was describing just didn't seem at all consistent with the one we live in today.

    However - and this is getting to what Gary seems to be alluding to - perhaps that is to underestimate the imminent advance of hard-core socialism during the time that she was writing. If true, then I should give Rand her due for helping to preserve the role of markets in the economy. (At the same time, I agree with Daniel that she was hardly fighting a lone battle and is but one of many.)

    On other aspects of her life and work, I remain less forgiving.

  14. For anyone interested, here is Richard Dawkins on altruism and social Darwinism:

    For what it's worth, Daniel you might notice he talks to Frans De Waal - who we have discussed previously ( - in the last segment of the programme.


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