Peter Boettke – Bleeding Heart Libertarians http://bleedingheartlibertarians.com Free Markets and Social Justice Wed, 15 Nov 2017 17:16:21 +0000 en-US hourly 1 https://wordpress.org/?v=4.8.3 http://bleedingheartlibertarians.com/wp-content/uploads/2016/09/cropped-site-icon-BHL-32x32.png Peter Boettke – Bleeding Heart Libertarians http://bleedingheartlibertarians.com 32 32 22756168 Fearing Freedom http://bleedingheartlibertarians.com/2013/05/fearing-freedom/ http://bleedingheartlibertarians.com/2013/05/fearing-freedom/#comments Sat, 25 May 2013 19:25:53 +0000 http://bleedingheartlibertarians.com/?p=5852 James Buchanan was one of the most philosophical economists of his generation, and he had a deep commitment to the classical liberal world-view. But he also identified serious challenges that...

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James Buchanan was one of the most philosophical economists of his generation, and he had a deep commitment to the classical liberal world-view. But he also identified serious challenges that classical liberals had to grapple with — challenges of justice, challenges of freedom and responsibility, and challenges of vision.

In this working paper, written for a collection of papers honoring Buchanan, I try to grapple with Buchanan’s challenges. It would be great to hear from BHL readers what they thought of Buchanan’s challenges and whether they might classify him as a forerunner of BHL.

Here’s the abstract:

In “The Soul of Classical Liberalism” (2000), James Buchanan argues that modern advocates of the liberal order must move beyond the mid-20th century project of “saving the books” and “saving the ideas” and instead embrace the challenge of “saving the soul” of liberalism. The prospects for establishing a genuine liberal order turn on capturing the intellectual imagination of a significant segment of the population. This paper examines the themes Buchanan raises in three essays that focus our attention on these critical issues; they are “Buchanan, The Potential and the Limits of Socially Organised Humankind” (1991); “The Soul of Classical Liberalism” (2000); and “Afraid to Be Free” (2005).

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Rawls on Economists and Philosophers http://bleedingheartlibertarians.com/2012/04/rawls-on-economists-and-philosophers/ http://bleedingheartlibertarians.com/2012/04/rawls-on-economists-and-philosophers/#comments Mon, 30 Apr 2012 18:31:49 +0000 http://bleedingheartlibertarians.com/?p=2778 My colleague David Levy recently alerted me to a discussion in Rawls’s Lectures on the History of Political Philosophy (2007, p. 162) on the intellectual relationship between economists and philosophers.  As...

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My colleague David Levy recently alerted me to a discussion in Rawls’s Lectures on the History of Political Philosophy (2007, p. 162) on the intellectual relationship between economists and philosophers.  As Rawls points out Hume and Smith were both utilitarian philosophers and economists, and the same is true for Bentham, James Mill, John Stuart Mill and Henry Sidgewick.  “Utilitarianism,” Rawls states,  “is perhaps unique in its collective brilliance. It has run at least from the early part of the 18th century to the present time and has been marked by a long line of brilliant writers who have learned from each other.”  He concludes that “As a result, having evolved continuously over nearly three centuries, it is probably the most impressive tradition in moral philosophy.”  Sadly, though he notes, “since 1900 the tradition has divided into two more or less mutually-ignoring groups, the economists and the philosophers, to the reciprocal disadvantage of both.”

What do you think of this observation by Rawls?

I also wonder what the implications are if we didn’t fall into “mutually-ignoring groups” — tonight in my seminar we will be discussing The Liberal Archipelago.  Kukathus’s book has been one of my favorite statements of the vision of a “good society” that I share.  The issue of minority rights and the least advantaged are of course central to the argument, but the critical point from my perspective in the institutional fix and safe-guards through political decentralization, within a broader framework that allows different groups to co-exist while also ensuring that exit is not just a theoretical aspiration.

Can that vision of the “good society” exist independent of the economic analysis of institutional structure and competition?

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Baboons Build Their Own Cages, Don’t They? http://bleedingheartlibertarians.com/2012/04/baboons-build-their-own-cages-dont-they/ http://bleedingheartlibertarians.com/2012/04/baboons-build-their-own-cages-dont-they/#comments Mon, 16 Apr 2012 13:48:07 +0000 http://bleedingheartlibertarians.com/?p=2542 I wasn’t much of a student in HS and before — my attentions were directed elsewhere — but I had a few highlight moments where the material and ideas being...

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I wasn’t much of a student in HS and before — my attentions were directed elsewhere — but I had a few highlight moments where the material and ideas being discussed excited my imagination: freshman biology, sophomore geometry, senior history and senior english.  In that english seminar we read Albert Camus, The Stranger, and during the discussion of the book and the idea of alienation and despair (a subject just right for those experiencing teenage angst), the teacher declared — “Baboons build their own cages, don’t they?”  As the conversation continued, the teacher stressed how our destiny is of our own making, not the result of some forces outside of our control.  We should embrace, she told us, the challenge of building out life as we see fit.  We are not to be trapped by our circumstances, by our family traditions and beliefs of our parents, and we are not to be defined by the expectations of others.  We weren’t victims or slaves to our past.  We are the architects of our own lives, and we should dream big and build lives that turn those dreams into a reality.

This lesson really hit home for me for a variety of reasons.  My transition to college was a tough one, and those first 2 years (in which I repeated my freshman year after transferring from my first college) was one of intense personal learning as my self-identity took one shot after another of home sickness, family loss, and dashed dreams.  I had to reconstruct myself; to envision a alternative future for myself.  In the middle of this process of I was introduced to economics and to philosophy.  I would study both as best as I could at the time given my background and the courses offered at my college.  I also started reading a lot more outside of class, and in particular classic works in economics and libertarian social philosophy.  Two books from the 1970s had a significant impact on my thinking about individualism and crafting a life — David Norton’s Personal Destinies: A Philosophy of Ethical Individualism (Princeton, 1977), and Roger Williams, Free and Unequal: The Biological Basis of Individual Liberty (Liberty Fund, 1979).  I read both somewhere around 1979-80, and the way I read them reinforced that lecture from my HS english teacher, and it made me think not only was my life in my own hands, but that any legal barriers to my choosing how to construct my life was not just a nuisance but morally wrong and had to be opposed on principle.  The link between free market economic efficiency and the freedom of the individual to be the author of their own life was obvious to me from that moment.

In 1984 I was sitting in James Buchanan’s graduate seminar when he asks us to write a paper on “Who is the Individual in Economics?”  By that time I was a strategic enough student to realize that in answering questions from a professor perhaps I should read what that professor had to say on the subject and perhaps even read what their professors had to say on the subject before writing up my essay.  This lead to read a few essays by Frank Knight, and then eventually to an essay by Buchanan himself, “Natural and Artifactual Man.”  Buchanan’s essay blew me away then, and it still does to this day.  I would also recommend his essay “Afraid to Be Free” to readers of BHL.  In “Natural and Artifactual Man” Buchanan makes the statement that “Man wants liberty to become the man he wants to become.”

During graduate school most of my philosophical reading and formal study was in the philosophy of science and phenomenology/hermeneutic philosophy.  Rawls, Nozick, Walzer, Dworkin, Espstein, etc. were part of of my reading and study, but not the primary focus of my philosophical inquiry at that time.  Popper, Lakatos, Polanyi, Quine, Hausman, Rosenberg, Caldwell, Maki, McCloskey were, along with Schutz, Charles Taylor, Paul Ricoeur, Gadamer, and Bernstein.  But I read these philosophers with the intent of carving out intellectual space in the formalistic and postivistic discipline of economics for an economics that focused on human agency, institutional analysis, and spontaneous order theory.  The entrepreneurial theory of the market process made so much sense to me, but the theory was pushed to the margins of the profession due to a preoccupation with model and measure methodology.

This focus redirected my earlier fascination with the individual’s freedom and ability to construct their own lives through their own plans and efforts.  But then I read Loren Lomasky’s Persons, Rights, and the Moral Community (Oxford University Press, 1987), and in particular his discussion of persons and projects.  On that first reading back in my last year of graduate school I termed Lomasky’s perspective as “Kirznerian” — or an entrepreneurial understanding of the individual constructing their own lives through their projects.  Lomasky’s book made me go back and look at David Norton’s and Roger Williams’s book, which were sitting on my shelves untouched since 1980.  Every time I read Lomasky’s book, which I now teach from, I get that jolt of youthful enthusiasm for an argument about how we as human beings are capable of constructing our own destinies and being creatures capable of true self-government.  We are the entrepreneurs of our own existence.  This is what gives us agency; this is what gives us dignity.  This is what it means to live a meaningful life.  To me, Lomasky’s book does not get discussed enough, nor does the concept of our entrepreneurial selves.

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Occupy the Mind — Nozick Edition. It ain’t ideology, it’s institutional analysis http://bleedingheartlibertarians.com/2012/04/occupy-the-mind-nozick-edition-it-aint-ideology-its-institutional-analysis/ http://bleedingheartlibertarians.com/2012/04/occupy-the-mind-nozick-edition-it-aint-ideology-its-institutional-analysis/#comments Tue, 10 Apr 2012 14:05:49 +0000 http://bleedingheartlibertarians.com/?p=2487 On p. 272 of Anarchy, State and Utopia, Nozick writes the following: Economically well-off persons desire greater political power, in a nonminimal state, because they can sue this power to...

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On p. 272 of Anarchy, State and Utopia, Nozick writes the following:

Economically well-off persons desire greater political power, in a nonminimal state, because they can sue this power to give themselves differential economic benefits.  Where a locus of such power exists, it is not surprising that people attempt to use it for their own ends.  The illegitimate use of a state by economic interests for their own ends is based upon a preexisting illegitimate power of the state to enrich some persons at the expense of others.  Eliminate that illegitimate power of giving differential economic benefits and you eliminate or drastically restrict the motive for wanting political influence.  True, some persons will thirst for political power, finding intrinsic satisfaction in dominating others.  The minimal state best reduces the chances of such takeover or manipulation of the state by persons desiring power or economic benefits, especially if combined with a reasonably alert citizenry, since it is the minimally desirable target for such takeover or manipulation.  Nothing much is to be gained by doing so; and the cost to the citizens if it occurs is minimized.  To strengthen the state and extend the range of its functions as a way of preventing it from being used by some portions of the populace makes it a more valuable prize and a more alluring target for corrupting by anyone able to offer an officeholder something desirable; it is, to put it gently, a poor strategy.

What does this say about the outrage that has been expressed about the bailouts directed at Wall Street?  What does this say about questions about the scale and scope of state activity in general? How does it impact the way one must think through the BHL project?

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Modern Libertarianism — Robert Nozick Process Theorist http://bleedingheartlibertarians.com/2012/04/modern-libertarianism-robert-nozick-process-theorist/ http://bleedingheartlibertarians.com/2012/04/modern-libertarianism-robert-nozick-process-theorist/#comments Mon, 09 Apr 2012 13:34:36 +0000 http://bleedingheartlibertarians.com/?p=2481 Today we will be discussing the contributions of Robert Nozick to modern social philosophy and political economy.  It is my impression, perhaps wrong, that most philosophers and political theorists focus...

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Today we will be discussing the contributions of Robert Nozick to modern social philosophy and political economy.  It is my impression, perhaps wrong, that most philosophers and political theorists focus on Nozick’s “rights theory” and his rights-based arguments against Rawlsian social justice.

I don’t deny that such a reading makes sense, but I wonder if it is the best reading of Nozick’s book.  As an economist, I emphasize his style of reasoning (invisible hand theorizing) and the mechanisms he identifies (e.g., competition between political units).  And even in the sections dealing with social justice, Nozick is as much a process theorist as a rights-based theorist.

In discussing Nozick’s contributions among philosophers and political theorists how much time and effort is spent thinking about invisible-hand explanations, process tracking, the benefits of competitive pressures among political units, etc.?

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Question to the Non-Ideal Theorists of Justice — What Do You Think of Henry Hazlitt? http://bleedingheartlibertarians.com/2012/03/question-to-the-non-ideal-theorists-of-justice-what-do-you-think-of-henry-hazlitt/ http://bleedingheartlibertarians.com/2012/03/question-to-the-non-ideal-theorists-of-justice-what-do-you-think-of-henry-hazlitt/#comments Wed, 07 Mar 2012 15:51:15 +0000 http://bleedingheartlibertarians.com/?p=2271 I am in the midst of finishing off a draft of a paper on Henry Hazlitt for a conference at Duke next month.  The conference is on the Economist as...

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I am in the midst of finishing off a draft of a paper on Henry Hazlitt for a conference at Duke next month.  The conference is on the Economist as Public Intellectual, and what I am doing is reversing that and discussing the case of a Public Intellectual as an Economist.  Hazlitt, in my opinion, is rivaled in this role only by Bastiat. Perhaps that is overstating it, but ultimately I don’t think so.

I was aided in my task by the availability of Hazlitt’s complete archives which have been compiled at Universidad Francisco Marroquin with the cooperation of the Foundation for Economic Education and Liberty Fund.  So for the past 6 months I have been reading Hazlitt’s correspondence, reading unpublished papers, memorandums, etc.  Great fun.  For those who have sampled Hazlitt’s writings, it also an amazing development that his Newsweek columns have all been collected in Business Tides (2011), and the introduction by historian Paul Milazzo is outstanding.  After reading through online archives at The Nation and The New York Times, it would be awesome to have all his editorials and book reviews in a volume as well.

For readers of BHL, one of the interesting facts of Hazlitt’s life would be that he originally wanted to be a philosopher.  Unfortunately, due to family circumstances he had to leave college to work full-time, and this lead him eventually into the area of journalism.  But he published his first book in 1916 with Dutton — Thinking as a Science.  At The Nation and at The New York Times, Hazlitt was not only an economic journalist, he was an artistic and literary critic.  He reviewed numerous works by philosophers such as Bertrand Russell, Morris Cohen, John Dewey, etc.  One of his last publishing projects was an edited volume on The Wisdom of the Stoics (1984).

Least you think of Hazlitt as a “movement” intellectual exclusively, I should point out that his books sold well — his most famous work, Economics in One Lesson (1946) reached #6 on NYT best-sellers list for non-fiction, sold 700,000 copies in original edition, and millions of copies in subsequent editions and translations.  His books were also reviewed not only in the major intellectual periodicals, but also in the leading scientific periodicals — American Economic Review, Journal of Political Economy, Economic Journal, American Journal of Political Science, and Ethics.  The subject of the lengthy review essay in Ethics, was Hazlitt’s most sustained work in social philosophy — The Foundations of Morality (1964).  It is an argument for “rule utilitarianism”, and in particular the adoption of general rules of the social game that enable us to live with one another so we can all benefit from social cooperation under the division of labor.  He argues that “social cooperation is the essence of morality.” (1964, 359)  In making this argument, Hazlitt grounds his analysis in the writings of Hume, Smith, Bentham, Mill, Sidwick, Wicksteed, Mises, and Hayek.  The review in Ethics as “Abstract Economics as Absolute Ethics” and it chides Hazlitt for making this sort argument about social cooperation and the private property order.  But Hazlitt’s argument is actually one that is quite comforting to economists and political economists (certainly to those within the broad classical liberal perspective), though not necessarily so comforting to those who believe in natural rights theory or some form of moral intuitionism.  Leland Yeager in Ethics as Social Science (2001) picks up where Hazlitt left off, and places the argument for “rule utilitarianism” in the context of modern social philosophy.  Again, to me, Yeager’s work is persuasive.  It should be, I was the editor of the series that published his book!

When I read contemporary works by non-ideal theorists of justice, I see a lot of similarities with the argument as laid out by Hazlitt.  The arguments are not identical, but they compliment each other nicely in my mind.  Have the contemporary philosophers engaged Hazlitt’s work in-depth at all? (Please provide references)  How about Yeager?  If not, am I misunderstanding the argument as it has evolved within the professional discourse in philosophy and the arguments made by these economists venturing into the field of social and political philosophy?  In other words, rather than be embarrassed by the phrase “Abstract Economics as Absolute Ethics”, should we all just embrace it proudly?

And as an aside, I don’t think embracing this implies a cold heart — you still can have a warm heart, even if you have a very hard head — in other words be an economistic “bleeding heart libertarian”, which is what I think anyone who reads Henry Hazlitt’s The Conquest of Poverty (1973) will realize he was.

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From Capitalism and Freedom to Free to Choose — Milton Friedman’s defense of liberalism http://bleedingheartlibertarians.com/2012/02/from-capitalism-and-freedom-to-free-to-choose-milton-friedmans-defense-of-liberalism/ http://bleedingheartlibertarians.com/2012/02/from-capitalism-and-freedom-to-free-to-choose-milton-friedmans-defense-of-liberalism/#comments Mon, 27 Feb 2012 17:00:25 +0000 http://bleedingheartlibertarians.com/?p=2182 Capitalism and Freedom was published in 1962 without much fanfare, though it has since stood the test of time.  But Free to Choose was an international sensation when it was published in...

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Capitalism and Freedom was published in 1962 without much fanfare, though it has since stood the test of time.  But Free to Choose was an international sensation when it was published in 1980.  Among economists of a certain generation, they find Capitalism and Freedom the more tightly reasoned book, and explain the impact difference on a general shift of the climate of opinion.  One way to make this claim is to suggest that Capitalism and Freedom was so successful at influencing thought leaders that by the time Free to Choose was published the intellectual elite was more receptive to the ideas.  This might even be Friedman’s preferred explanation as it is consistent with the “tide of ideas” approach to social change.  I am not going to dispute the vital importance of the climate of opinion and how politics is shaped within the constraints of the prevailing ideological climate to a considerable extent.  Instead, I want to ask readers to think of a different question.

See I grew into a classical liberal/libertarian movement where all my elders were influenced either by The Road to Serfdom (1944), or Capitalism and Freedom (1962) well before they ever read Free to Choose (1980).  I always disagreed with the assessment that Capitalism and Freedom was the superior book from an academic perspective.  I agree it is a powerful book, I just think Free to Choose is one of the best books I ever read in economics.  Since all of my teachers and mentors in classical liberalism came to their position well before 1980, they did not see Free to Choose as a transformational work, but instead as at best a popularization of ideas they had already come to accept.  But that was then, and this is now, so there probably are some readers of BHL (like me) for whom Free to Choose was in fact a pivotal text in their introduction to free market ideas and the philosophy of limited government.  I am putting aside the great impact that Ayn Rand had, or that of Murray Rothbard, Robert Nozick, Richard Epstein, etc.  I just want to ask about the economic argument, and ask about the subtle differences between Capitalism and Freedom and Free to Choose.  In my reading, rather than a water-downed and more popular treatment of the material from Capitalism and Freedom, Free to Choose reflects a slightly different perspective.  That perspective is one much closer to the Hayekian focus on knowledge acquisition and utilization through the competitive market, and the Buchanan focus on constitutional level of analysis and the importance of the institutional framework.  On the public choice elements, Friedman is explicit about the “fresh approach to political science” that informs the effort in Free to Choose (ix-x).

Whereas Friedman sees Capitalism and Freedom as more theoretical, and Free to Choose as more concrete, I think the introduction into the analysis of the issues of (1) the quantity of information that must be processed and utilized in the economy, as well as the quality of information that must be assessed by economic participants to produce the coordination of economic activities through time, and (2) the role of interest groups, political structure, and the constitutional level of analysis, make Free to Choose a more subtle and ultimately a more persuasive text about the case for the free market economy and the problems of political intervention into the market economy.  To use Deirdre McCloskey’s recent terminology, the prudence only economics of Capitalism and Freedom gives way to a more nuanced understanding of the operation of a free economy and free society that must account for prudence + many other virtues, history, and institutional analysis.  As that intellectual move is made, the argument becomes not just about efficiency, but also about knowledge mobilization, the civilizing impact of commerce, the creative powers of a free economy, and the liberal plea for cosmopolitanism, toleration, and peace.

What happened intellectually and historically between 1962 and 1980, that the leading US exponent in the public imagination for the free market economy and limited government would shift his argument in such a subtle direction?

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Can a Defense of Liberalism Be Based on Our Ignorance? http://bleedingheartlibertarians.com/2012/02/can-a-defense-of-liberalism-be-based-on-our-ignorance/ http://bleedingheartlibertarians.com/2012/02/can-a-defense-of-liberalism-be-based-on-our-ignorance/#comments Thu, 23 Feb 2012 15:23:31 +0000 http://bleedingheartlibertarians.com/?p=2137 Last week in my Constitutional Economics class we discussed Hayek’s The Constitution of Liberty (1960).  My favorite chapter in that book is Chapter 2, “The Creative Powers of a Free Civilization.”...

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Last week in my Constitutional Economics class we discussed Hayek’s The Constitution of Liberty (1960).  My favorite chapter in that book is Chapter 2, “The Creative Powers of a Free Civilization.”  Hayek argued that “Liberty is essential in order to leave room for the unforeseeable and unpredictable; we want it because we have learned to expect from it the opportunity of realizing many of our aims.  It is because every individual knows so little, and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it. Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen.  These accidents occur in the combination of knowledge and attitudes, skills and habits, acquired by individual men and also when qualified men are confronted with the particular circumstances which they are equipped to deal with.  Our necessary ignorance of so much means that we have to deal largely with probabilities and chances.” (p. 29)

Over at Coordination Problem today I posted on Buchanan’s note “Order Defined in the Process of Its Emergence” and linked to a recent lecture by Russ Roberts on emergent order in economics.  Both of these talk about the role of discovery in the spontaneous ordering of economic activity.

In the class discussion on Monday, I suggested that Hayek — who claims to be following the Humean project of ‘using reason to whittle down the claims of Reason’ — is building a case for liberalism based on the idea of finding the appropriate framework for social interaction that enables us to live better together by both coping with our ignorance and exploiting the unique knowledge that each of us possesses throughout the system.  “Rights speak” is not invoked by Hayek, and while constitutional contract is discussed, the pure logic of social contractarianism is not what underlies his framework (though there are those curious passages about his similarities with Rawls that might suggest otherwise).  Instead, there is an argument that begins with our ignorance, and the necessity of finding rules that treat men as they really are, and yet enable them to realize the creative powers of a free civilization.

In your opinion does the argument work?

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On the Relationship Between Economics and Philosophy http://bleedingheartlibertarians.com/2012/02/on-the-relationship-between-economics-and-philosophy/ http://bleedingheartlibertarians.com/2012/02/on-the-relationship-between-economics-and-philosophy/#comments Wed, 08 Feb 2012 14:55:14 +0000 http://bleedingheartlibertarians.com/?p=2007 I am teaching a course this term which is basically an examination of modern libertarian political philosophy and political theory  for PhD students in economics.  But, I am also teaching...

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I am teaching a course this term which is basically an examination of modern libertarian political philosophy and political theory  for PhD students in economics.  But, I am also teaching an advanced topics course in economic theory for PhD students this term.  In the first course, we have so far discussed the evolution of the argument for taming man’s passions, including his passions expressed within the realm of politics.  We used Albert Hirschman’s The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph (Princeton, 1977) to serve as the primary text to discuss this intellectual evolution.  In the past I have used Scott Gordon’s Controlling the State (Harvard University Press, 2002), but that is a much more historical rather than philosophical treatment of the issue — though getting that history right is vital to the exercise.  In my advanced topics course, our preoccupation so far has been on rationality and equilibrium modeling, and we have been focusing our reading on a variety of text and journal articles.  This week we discussed a paper by Paul Anand from The Economic Journal, on the issue of intransitivity and rationality in choice.  As luck would have it, Mario Rizzo — who is teaching a course on behavioral economics this term at NYU — just posted about this issue, and why being rational might not always be rational.  Restating last night’s conversation, however, is not my intent with this post, but rather I’d like to perhaps stimulate a discussion on what actually is the relationship between economics and philosophy.  In the Anand paper, he argues explicitly that while economists have freely borrowed and engaged the literature in psychology over human choice (e.g., consider Daniel Kahneman’s Thinking, Fast and Slow), they have failed to engage as seriously the philosophical literature in decision theory and action theory (e.g., Donald Davidson).  Reading that claim made me think — what exactly should the relationship between economics and philosophy be in the modern academic discourse.

My disciplinary training is squarely within economics, though I minored in philosophy as an undergraduate, and I devoted a considerable amount of time as a graduate student studying the philosophy of science under the guidance of my dissertation adviser Don Lavoie.  And while I have written a number of articles on the method and methodology of economics, my primary research has been in applied political economy that has drawn on the disciplines of history, politics and sociology far more than pure philosophy.  At GMU, besides my position in economics, I am a faculty member of the Department of Philosophy, Honors College, Russian Studies, and Center for Global Studies, and I have taught in the School of Law, and served on many dissertations in the School of Public Policy.  In each of my intellectual forays into interdisciplinary work, economics provides the guiding framework (perhaps arrogantly so).  Sociology might provide interesting questions, but it is within the argumentative structure of economics that answers are to be found.  Historical data has no meaning until made intelligible by way of economic analysis.  Politics may be an interesting subject matter, but again it is economics that provides the analytical lens to make sense of political behavior from voting to revolutions.  And, in political theory I think the position staked out by my teacher James Buchanan is the one I am most comfortable with, and serves as the guiding framework for my teaching approach to the course mentioned above.

Within the Buchanan analytical framework the relationship between social philosophy and economics can be understood to reflect the distinction between choice over the rules, and choice within a given set of rules.  Social philosophy examines “what is a good game of life”, but that question cannot be operationalized unless we talk about “what are the good rules that define that game”.  In answering that question, however, we must always be mindful of the strategies that players will play once the rules are established.  In other words, we have to answer “How will the players play the game given those rules?”, and to do that we require the analytical apparatus of economics.  It is the tacking back and forth between “What are the good rules?” and “How will players play given those rules?” that we form a political economy answer to questions of social organization.  This is one of the reasons I am so intrigued by non-ideal theories of justice, as opposed to ideal theorizing — the non-ideal theorizing takes seriously the constraints of treating men as they really are, and seeks to find the pattern of institutions that will allow us to live better together.  In short, it represents philosophy disciplined by economics in order to produce better philosophy.

That is one possible relationship between economics and philosophy in the context of political theory.

On the other hand, there is also the disciplining role of philosophical discourse in the context of economics.  Methodological discussions and the questions of philosophy of science should not just be the peculiar interests of some practicing economists, but should occupy the attention of all economists at least twice in their careers — at the beginning so they can make an informed choice over what sort of economics they want to do, and at the end of their careers as they reflect back on the success or failure of their research endeavors.  Ultimately, methodology matters because it determines not only what one considers interesting questions to pursue, but perhaps more importantly what are acceptable answers to those questions.

How do professional philosophers see the relationship between economics and philosophy?  Is Anand correct that economists could learn as much, if not more, from action theorists as from psychologists on the nature of human choice?  Is Buchanan right that philosophical inquiry into the ‘good society’ must always be tempered by a discussion of self-interest with guile and thus the possibility of strategic opportunism?

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The Liberalism of Classical Liberalism http://bleedingheartlibertarians.com/2012/01/the-liberalism-of-classical-liberalism/ http://bleedingheartlibertarians.com/2012/01/the-liberalism-of-classical-liberalism/#comments Thu, 26 Jan 2012 15:25:23 +0000 http://bleedingheartlibertarians.com/?p=1883 I want to thank Matt for the invitation to blog through the semester at BHL. And contrary to Steve Horwitz’s depiction I don’t roll my eyes at the phase “bleeding...

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I want to thank Matt for the invitation to blog through the semester at BHL. And contrary to Steve Horwitz’s depiction I don’t roll my eyes at the phase “bleeding heart libertarianism” but at the state of intellectual play in academia, and our broader intellectual culture, that makes the introduction of such an adjective necessary. As Steve highlights in his post on Jeff Sachs’s understanding of libertarianism, there should be no doubt that folks misrepresent the classical liberal and libertarian position. Why would Sachs believe that “Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable – are all to take a back seat.” Did he read that in Adam Smith, in J. B. Say, in J. S. Mill, in F. A. Hayek, in Milton Friedman, in James Buchanan, or in Vernon Smith? Deirdre McCloskey’s perhaps more than another other contemporary scholar is really trying hard to set the record straight. She has already published 2 weighty volumes, which I have written review essays on — Bourgeois Virtues and Bourgeois Dignity — and is currently finishing up Vol. 3, of a projected 6 volumes,  and her work is so weighty because the argument requires that much elaboration in our current intellectual culture.

Our modern understanding of the technical economics, the structural political economy, and deeper moral philosophy of Adam Smith is so flawed that such a basic common concern of the Scottish Philosophers as that of creating the institutional conditions for a civil and compassionate society is lost in the rendering. Hume’s focus on private property, the transference of property by consent, and the keeping of promises through contract are not rules that only benefit one segment of society at the expense of others, but instead form the general foundation for civil society and peaceful social cooperation. Smith’s analysis of the wealth of nations is not ultimately measured in trinkets and gluttonous acts of consumption, but by a rising standard of living that is shared by more and more of the general population. It is an empirical matter as to which set of institutions best achieves that task. But the concern with raising the living standards of the least advantaged in society is never far from view. Sachs, in other words, I am arguing should know better. And so should others in philosophy, politics and economics. The atomistic neoclassical model has nothing whatsoever to do with liberalism as understood by classical political economist or the modern descendants of the mainline of political and economic thought.

The classical liberal political economists treat the individual not as atomistic, but as embedded within social settings – in families, in communities, in history. Yes there is both the self-interest postulate and the invisible-hand postulate, but these are not understood as the conventional critic wants to present them. The mainline of economic thought from Smith to Hayek has a rational choice analytical structure to the questions of the logic of choice, but it is rational choice for mortals, not robots. And there are invisible hand processes, but they depend on an institutional context to provide the filter processes which dictates the equilibrating tendencies exhibited. In short, the mainline of political economy from Smith to Hayek is one that does rational choice as if the choosers are human, and institutional analysis as if history mattered. No atomistic, ego-centric, prudence only analysis is to be found in this work properly read.

Furthermore, this mainline of political economy approach while rejecting the claims to resource egalitarianism, is firmly grounded in analytical egalitarianism. Anyone, who challenges the analytical egalitarian perspective is subject to scorn by Smith – e.g., his proposition that the only difference between the philosopher and the street porter is in the eyes of the philosopher, or his warning that the statesman who attempts to out guess the market would not only assume of level of responsibility he is incapable of judiciously exercising, but also would be nowhere as dangerous as in the hands of a man who thought himself up to the task. Hume and Smith presented a structural argument in political economy; an argument intended to discover a set of institutions where bad men could do least harm if they were to assume positions of power. As Hume put it, when we design institutions of governance we must presume that all men are knaves. And in a move that anticipated the modern political economy of both Hayek and Buchanan, Smith basically argued that our knavish behavior manifests itself in either arrogance or opportunism.

But the emphasis I have provided so far is on the restraints that classical liberals hoped to establish on the abuse of power by political elites. However, it is just as important to stress the emancipatory aspect of the doctrine as well. As Hayek writes in his essay “Individualism: True and False”, Smith and other classical liberal political economists were concerned “not so much with what man might occasionally achieve when he was at his best but that he should have as little opportunity as possible to do harm when he was at his worst.” Hayek continues: “It would scarcely be too much to claim that the main merit of the individualism which he and his contemporaries advocated is that it is a system under which bad men can do least harm. It is a social system which does not depend for its functioning on our finding good men for running it, or on all men becoming better than they now are, but which makes use of men in all their given variety and complexity, sometimes good and sometimes bad, sometimes intelligent and more often stupid.” And Hayek concludes, “Their aim was a system under which it should be possible to grant freedom to all, instead of restricting it, as their French contemporaries wished, to ‘the good and the wise’.” (emphasis added)

The difference in judgment between Hayek and Sachs is not one of philosophical concern with the least advantage, but an empirical assessment of what system best provides “Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable.” The liberal vision has been throughout its history that sought to find a set of institutions that would produce a society of free and responsible individuals, who have the opportunity to participate and prosper in a market economy based on profit and loss, and who live in, and are activity engaged in, caring communities.

As Deirdre McCloskey put this point in her Bourgeois Virtues, one cannot answer empirical questions philosophically — they must be answered empirically. And that means that we must push the conversation about compassion, justice, civic responsibility, honesty, decency, humility, respect, and a concern for the poor, the weak, and the vulnerable, beyond romantic poetry and to hard-headed institutional analysis. Check out this recent discussion with Bob Lawson on the relationship between Economic Freedom and Income Inequality.

No doubt the liberalism in the classical liberal tradition reflects a bleeding heart libertarianism, but that compassionate concern for the least advantaged is always disciplined by the hard noised analysis of how the institutional environment within which we live together structures the incentives actors face in making decisions, and mobilizes the dispersed information throughout the social system that must be utilized in making decisions and learning from social interaction.

Matt linked to my course syllabus for Econ 828 – Constitutional Economics. This class is one I inherited from Professor James Buchanan and it is largely inspired by his work in political economy and social philosophy. The course ultimately is an invitation to inquiry into the rules of governance that enable us as fallible but capable human beings to live better together; to realize the gains from social cooperation under the division of labor.

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