By Mark D. White

In the inaugural issue of The Raven, a literary philosophy magazine*, Lisa Herzog (University of Groningen) combines academic expertise and personal history to scrutinize knowledge-based arguments for the market in "The Epistemic Seduction of Markets." From the end of her introduction:

I have concluded that the epistemic argument for markets needs to be heavily qualified, if not put on its head: it is not an argument for “free” markets but for the careful regulation of markets. The “invisible hand” can only, if ever, do its work on material that has been diligently prepared, and continues to be monitored, by many visible hands. Otherwise, the result may be a mere chimera of the epistemic mechanism that I learned about when studying economics: it may seem to work fine on the surface but fail to realize the goals it is supposed to achieve, such as genuine preference satisfaction and the avoidance of inefficient economic behavior. This misleading image of the market can keep us trapped when we think about institutional design, inserting a pro-market bias instead of allowing for an objective evaluation of alternatives. And given the need to redesign many economic institutions in the face of climate change and massive socio-economic inequality, we cannot afford to be held captive by a picture, as Wittgenstein had once put it.

An intriguing read, and just one part of an encouraging start for a unique new publication.

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* From the "About" page on their website:

The Raven is a magazine of original philosophy written for intellectually curious readers with or without academic training in the discipline. It aims to revive an essayistic style of philosophy that was more common in academic venues as recently as thirty years ago but has gradually disappeared — that is, to publish contributions to the “literature” that deserve to be called literature.

Mark D. White

Upon generous invitation, earlier this month I helped launch a conversation at Cato Unbound regarding whether or to what extent Immanuel Kant can or should be regarded as a classical liberal.

The entire discussion can be found here, starting with my lead article in defense of Kant as a classical liberal, followed by critical responses from Gregory Salmieri, Stephen R. C. Hicks, and Roderick T. Long, followed by my response to all three comments and further discussion (still continuing through the end of the month.

By James A. Bacon

[James Bacon is the publisher of Bacon’s Rebellion: Reinventing Virginia for the 21^st Century, from where this post is reprinted, with permission.--JW]

Students at the College of William & Mary have carried on a long tradition of festooning the campus statue of Thomas Jefferson with accouterments ranging from woolen scarfs to party hats. The latest fad is to append the effigy with sticky notes denouncing the founding father as a slave holder, a racist and a rapist. The activity imitates a similar movement on the University of Missouri campus, which has been coupled with a petition to remove a Jefferson statue on the grounds that it was offensive to idealize someone who owned and raped slaves. I don’t know if the anti-Jefferson movement will gain the same momentum at William & Mary, a public university in a state where Jefferson is revered like no other historical figure. But, given the tenor of the times, some kind of debate is inevitable.

I find the negative sentiments expressed in the sticky notes to be indisputably true at one level and profoundly misinformed at another. True, by today’s standards, Jefferson’s views and behaviors were reprehensible. He did own slaves. He did sell slaves and break up slave families. He most likely (though not indisputably) did keep a slave woman as a concubine. He did believe blacks to be inferior to whites. It is not unreasonable to ask why, for all his brilliance as an author of the Declaration of Independence, a United States president, an architect, the founder of the University of Virginia, and all-around polymath, we should continue to hold him in such high esteem (or, for that matter, why we should esteem any member of Virginia’s slave-holding aristocracy).

The case I would make for Jefferson (along with James Madison, George Washington, Patrick Henry and George Mason) is not that they reflected 21st-century sensibilities, which they clearly did not, but that they articulated values and principles for the first time in history that laid the foundation for the values we hold today. We could not have gotten to where we are today had Jefferson & Company not laid the groundwork.

Colonial America imported its institutions and mental constructs from a Europe that was emerging from the Middle Ages. Collective entities such as towns, cities, guilds, social classes and ethnicities — not individuals — were imbued with rights. When Nathaniel Bacon led a revolt against the autocratic Governor Berkeley of Virginia in 1676, leading a rag-tag band of impoverished farmers and freed slaves, he called for a restoration of the “rights of Englishmen.” Virginians were entitled to rights and privileges, embodied in the Magna Carta and common law that their ancestors had fought for and won. But those rights were not regarded as universal; they were peculiar to Englishmen and derived from English institutions. Jefferson’s great contribution was to draw from Enlightenment-era principles to argue that all men were endowed by their creator with inalienable rights, including life, liberty and the pursuit of happiness. Essentially, he reinterpreted the rights of Englishmen as rights applied universally to everyone. In Jefferson’s formulation, rights did not belong to collective entities; they belonged to individuals, and they were intrinsic to a person’s existence as a human being — the core principle of 21st-century political thought.

What is perhaps most remarkable about Jefferson is that he articulated principles in direct conflict with his own material self interest as a slave holder. While Jefferson indisputably failed to live up to his own principles, it is intellectually facile and lazy to end the discussion there. It is a truism (and one of Karl Marx’s few useful insights) that economic and social classes, either the rulers or the oppressed, create ideologies that support their material self interest. One must ask: How many ruling elites in the history of mankind have ever developed a governing philosophy that undercut their material self interest? How many ruling elites in history have wrestled with the dichotomy between those principles and the way they actually lived their lives, as Jefferson, Madison, Washington and others did? The answer: precious few. Indeed, I cannot off-hand think of any other ruling elite in the history of mankind that has done such a thing.

Jefferson articulated principles that most Americans, including the people who now despise him, hold dear today. We should revere him for making the leap from rights rooted in collective entities to rights applying to all. We should respect him for making that leap in contravention of his own material self interest, and appreciate the fact that the contradiction haunted him until his dying day, even if he failed to free all his slaves and impoverish himself in the process. The journey to equal rights for all Americans certainly did not end with Jefferson, but it started with him, and he rightly deserves a place in our pantheon of heroes.

Mark D. White

In this morning's installment of The Stone in The New York Times, anthropologist John Edward Terrell invokes against the individualist strain in modern politics, especially on behalf of "Republicans, especially libertarians and Tea Party members on the ideological fringe." But, as regular New York Times columnist David Brooks often does, Professor Terrell conflates individualism with self-interest, ultimately attacking a straw man.

Most of Terrell's piece is uncontroversial. He surveys ancient philosophers who emphasized the social nature of persons and the modern science that supports them. (He finds this ironic, implying that some woud disagree; who, exactly, remains to be seen.) He discusses religious traditions that emphasize community and responsibility, and contrasts this with Enlightment thinkers that emphasized the individual (each in his own nuanced way).

Near the end of the piece, though, he stakes a bold claim: "the sanctification of the rights of individuals and their liberties today by libertarians and Tea Party conservatives is contrary to our evolved human nature as social animals." This is a false dichotomy, for there is no contrast at all. Rights and liberties are necessary (if not sufficient) for a functioning civil society. Rights and liberties enable individuals to pursue their own interests broadly defined, which may and often do include their own well-being, the well-being of others, and ideals such as justice and equality. Libertarians and "Tea Party Conservatives" may place more emphasis on rights and liberties because they see support for them declining, but this does not imply that it is their only concern and that they think it is the sole metric of human progress and well-being.

Terrell also writes, "the thought that it is both rational and natural for each of us to care only for ourselves, our own preservation, and our own achievements is a treacherous fabrication." I agree, it is a fabrication, but in the sense of a straw man fabricated by Terrell himself, not any prominent conservative or libertarian thinker.

I'll end where Terrell began: politics. He writes that part of the divide between left and right in the US is over the "role of the individual," with the left "more likely to embrace the communal nature of individual lives" while the right (and libertarians) favoring rapacious self-interest. (I paraphrased a bit there.)

Let me offer an alternative, although it doesn't strike such a stark tone. Both left and right appreciate and value the social nature of the individual and their responsibilities to each other. Where they differ is in the role of the state in executing those responsibilities. The left believes the state should take care of the needy, through social programs and redistribution, while the right (and libertarians) believe individuals, acting alone or through voluntary organizations, should help each other. (And they do, as numerous studies have shown.) In other words, those who Terrell accuses of worshipping at the altar of self-interest are actually expressing their responsibility toward other individuals as an exercise of the rights and liberties they value so highly.

In short, rights and liberties are not always used to further self-interest, and the institutions of government often are. Individualism is not self-interest—on the contrary, the most noble and admirable acts of charity are those that result from the free actions of individuals acting in their sense of social responsibility.

There is no contrast here—let's not fabricate one.

Mark D. White

The worst thing to do when I'm trying to write is have Twitter open. Not only is it distracting (obviously), but it can be positively engrossing. So why do I do it? Because it helps me keep me up-to-date on the state of the world and what smart people are saying about important things.

In the last hour, I've seen two articles that pose questions, which I'll take a shot at answering—please feel free to offer your own answers in the comments below.

Question: "Should We Trust Economists?" asks Noah Smith in The Atlantic.

Answer: Yes, but with serious qualifications.

Smith recounts some familiar and valid criticisms of economics and economists, largely focusing on the limitations of economic models and the lack of experimental data with which to test them. He falters, though, when he dismisses alternative approaches, such as Austrian economics, and in a particularly infantile and insulting way. (I'll leave it to my friends at Coordination Problem to address this if they choose.) Except for that piece, Smith gets a lot right. I'll just mention two reservations that Smith fails to address:

a) Economists have a strong ideological and political bent, which consciously or unconsciously influences their work. This may be true of all scientists and researchers, of course, but the arbitrary and heuristic nature of many assumptions in economic models grants economists a great deal of discretion to insert their values and beliefs in their "scientific" models. So when an economists says "my model recommends stimulus" or "my model recommends austerity," keep in mind that this is not an entirely objective statement—nor can it be.

b) Somewhat related to the first point, economists are much better at saying what will happen than what should happen (and that's true even if you're very doubtful about how well they know the former!). When economists say what should happen—that is, what the government should do or what society should aim for—they're assuming a certain goal which is not an economic concept but an ethical or political one, about which economics training lends little specialized insight. So to the extent we should trust economists, we should trust them to recommend ways to get different places, leaving it to our elected representatives, acting through us, to decide where we want to go. (Or, ask a philosopher!)

So should we trust economists? Yes, if we restrict and temper that trust to focus narrowly on what economists do best—trace out the implications of various actions for key economic variables—and keep in mind the limitations of their prescriptions, based on both the limitations of economic science and the inherent ideology of economic models.

Question: "The question libertarians just can't answer," which is: "If your approach is so great, why hasn’t any country anywhere in the world ever tried it?" This comes from Michael Lind at Salon.

Answer: Many reasons, but the most important one is probably the temptation of power and the wealth it artifically creates, which libertarianism minimize. Even if we want to take a more optimistic approach, then I would cite the presumption of some people to think that a) they know what is better for other people and b) they have the right—nay, the responsibility!—to impose this better way of life on them. This is temptaton of a different sort, born of beneficence but grounded in hubris and disrespect. (I trust Bleeding Heart Libertarians will have more to add to this before long!)

Mark D. White

In today's Wall Street Journal, Mario Vargas Llosa, the winner of the 2010 Nobel Prize for Literature, writes very eloquently (of course!) on the connections between liberty, dignity, and human flourishing. He describes how these ideas, as those of any writer, are an essential and crucial part of his work:

It is the function of the novelist to tell timeless and universal truths through the device of a fashioned narrative. A story's significance as a piece of art cannot be divorced from its message, any more than a society's prospects for freedom and prosperity can be divorced from its underlying principles. The writer and the man are one and the same, as are the culture and its common beliefs. In my writing and in my life I have pursued a vision not only to inspire my readers but also to share my dream of what we can aspire to build here in our world.

More substantively, he describes the different understandings of the word liberal around the world, as well as how the term, along with the associated belief in the efficacy of the free market, have been abused or obscured in various ways:

There are those who in the name of the free market have supported Latin American dictatorships whose iron hand of repression was said to be necessary to allow business to function, betraying the very principles of human rights that free economies rest upon. Then there are those who have coldly reduced all questions of humanity to a matter of economics and see the market as a panacea. In doing so they ignore the role of ideas and culture, the true foundation of civilization. Without customs and shared beliefs to breathe life into democracy and the market, we are reduced to the Darwinian struggle of atomistic and selfish actors that many on the left rightfully see as inhuman.

The market does not operate in an ethical, political, or cultural vacuum, which responsible proponents of it recognize (but for which few get credit).

I'll allow Mr. Llosa the final word (would that I could do that more often!):

The search for liberty is simply part of the greater search for a world where respect for the rule of law and human rights is universal—a world free of dictators, terrorists, warmongers and fanatics, where men and women of all nationalities, races, traditions and creeds can coexist in the culture of freedom, where borders give way to bridges that people cross to reach their goals limited only by free will and respect for one another's rights. It is a search to which I've dedicated my writing, and so many have taken notice. But is it not a search to which we should all devote our very lives? The answer is clear when we see what is at stake.

Mark D. White

The latest blow to the Affordable Care Act came yesterday from a U.S. appeals cout in Atlanta--let me merely repeat what The Wall Street Journal quoted from the opinion today, which makes the case exceptionally well:

[The individual mandate] is "breathtaking in its expansive scope," the court wrote. "The government's position amounts to an argument that the mere fact of an individual's existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life. This theory affords no limiting principles in which to confine Congress's enumerated power."

In other words, if the government can impose this kind of "economic mandate"—if it can force individuals to enter contracts with private companies "from birth to death"—there are no longer limits on what it cannot do. "These types of purchasing decisions are legion," Judges Hall and Dubina write.

"Every day," they continue, "Americans decide what products to buy, where to invest or save, and how to pay for future contingencies such as their retirement, their children's education, and their health care. The government contends that embedded in the Commerce Clause is the power to override these ordinary decisions and redirect those funds to other purposes."

The final sentence--emphasis mine--says it all.

See also Ilya Shapiro's commentary on this latest development here.

Mark D. White

Regardless of where you stand on the law, economics, or politics of the Affordable Care Act, I highly recommend Ilya Shapiro's new paper "A Long, Strange Trip: My First Year Challenging the Constitutionality of Obamacare" (forthcoming in Florida International Law Review), in which the CATO scholar details his year of writing, speaking, and debating various legal issues involving the health care reform legislation.

For those of us in academia, the paper provides a wonderful view into the world of think tanks and advocacy--and may even spur some thoughts on the meaning and purpose of the academic life, as it certainly did for me.

Mark D. White

In the latest issue of Journal of the History of Economic Thought (33/2, June 2011) is a new article by Jerry Evensky (author of Adam Smith's Moral Philosophy: A Historical and Contemporary Perspective on Markets, Law, Ethics, and Culture):

ADAM SMITH’S ESSENTIALS: ON TRUST, FAITH, AND FREE MARKETS

ABSTRACT: When trust is shaken, individuals pull back and the market system contracts. Where trust grows, individual energy and creativity are unleashed and the system grows. In Adam Smith’s vision of humankind’s progress, trust is the central theme.

The Great Recession represents a classic case of a crisis of trust. Looking back to the work of Smith offers insight into the role of citizens and the State in creating an fruitful market environment based on trust, and the challenge of this process, given the human frailty of individuals (unfortunately, we are not angels) and the potential for State power to be captured and abused.

Mark D. White

Carl Bialik at The Wall Street Journal has an article in today's edition and a blog post from last night, both very evenhanded, about the attempts by governments to measure the happiness of its citizenry, and the skepticism of some regarding the efficacy of this.

For a critical look at the theory behind happiness studies, I would recommend Dan Hausman's article "Hedonism and Welfare Economics" from Economics and Philosophy, 26(3), November 2010.

I have two significant problems with governments purporting to measure happiness (which are similar to my problems with libertarian paternalism), which I hope to explore at length elsewhere.

1) Happiness is too vague a notion, and multifaceted a concept, to be measured with any degree of accuracy, and any instrument that is developed to do so will inevitably reflect the policy preferences of the parties doing the measuring.

2) It is grossly inappropriate for governments to base any policy decisions on what it thinks makes its people "happy" (or wealthy or wise), when what they should do is enable (and respect) the widest range of choices the people can make in their own interests (to whatever extent these interests include happiness). It is not up to the government to decide that we should be "happy" (especially according to some artificial and contrived definition), nor to take measures to get us there.

(See also this older post of mine at Psychology Today, making a similar point about happiness, but in the context of personal happiness and positive psychology rather than political theory.)