What impact does political entrepreneurship have on freedom and flourishing?

 

Preface to a Series of Essays

“Entrepreneurship necessarily takes place within culture, it is utterly shaped by culture, and it fundamentally consists in interpreting and influencing culture.”

-        Don Lavoie (Lavoie 2015, p. 50)

A few months ago, a kind person told me that “Freedom and Flourishing” had become more than just a blog. With that thought in mind, I have decided to try something new. I am proposing to present here a series of linked essays that can be read in much the same way as a journal article. Readers who wish to do so will be able to start at this Preface and read all the way through to the end, or alternatively, just read the essays that are of most interest to them. There will be links at the end of each essay to help readers to find their way to the next one and links at the beginning of each essay to help readers to find their way back to this Preface.

Some readers may notice that some of the material presented here has been published previously on this blog. The views presented in this series of essays have been more carefully considered but are still subject to revision.

As always, I welcome comments from readers.

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Some readers will come to this series with the prior belief that political entrepreneurship has a negative impact on freedom and flourishing. Those of us who believe that people tend to flourish most fully when governments refrain from interfering with their lives may hold that belief. We certainly have good reasons to be skeptical about the impact of political entrepreneurs on human flourishing.

Nevertheless, if we are serious about promoting libertarian ideals, we cannot avoid considering the possibility that political entrepreneurship might have a role to play in getting us from where we are now - or where we seem to be heading - to a political and legal order that is more conducive to human flourishing.

In my view, it is important to obtain a better understanding of political entrepreneurship at this time because many voters in liberal democracies seem to have become increasingly dissatisfied with conventional centre-left and centre-right political leaders. Unfortunately, there seems to be increasing support in liberal democracies for leaders who propose rule changes which are likely to have detrimental impacts on prospects for freedom and flourishing. That support seems evident on both the progressive and conservative sides of politics.

In that context, it is particularly important to understand the contribution that political entrepreneurship has made to the problems that voters perceive, and the likely consequences of the alternative approaches to political entrepreneurship that are currently on offer.

The analytical approach adopted here has been influenced by entangled political economy as explained by Richard E. Wagner. According to that approach, both “polity and economy are arenas of practical action that operate in similar but not identical fashion” (Wagner 2016, p. 64).

Wagner’s approach recognizes the importance of individual action:

“The framework of entangled political economy accommodates recognition that societies change only through individual action inside those societies, and with those actions spreading within the society according to the receptivity of other members of that society to those changes” (Wagner 2016, p. 138).

As Chris Matthew Sciabarra has suggested, to understand institutional change we need to recognize interactions between personal, cultural and structural (political-economic) considerations. Sciabarra has discussed the nature of those interactions using a Tri-Level Model which builds on Ayn Rand’s conceptual framework (Sciabarra 2000, pp. 379-83). He emphasizes that although the personal, the cultural, and the structural can be analyzed separately, they can never be “reified as wholes unto themselves” (Sciabarra 2000, pp. 379-80).

I believe that the concept of political entrepreneurship is necessary to an understanding of institutional change for much the same reason that the concept of economic entrepreneurship is necessary to an understanding of technological change. The focus of the series is on how political entrepreneurship shapes the formal rules that govern economic and personal freedom across jurisdictions.

These essays draw heavily upon the insights of Don Lavoie in considering the nature of political entrepreneurship. In the passage quoted in the epigraph, Lavoie was writing about economic entrepreneurship. He argued that the “seeing of profit opportunities is a matter of cultural interpretation” (Lavoie 2015, p. 51). However, the idea that entrepreneurship consists in “interpreting and influencing culture” seems particularly relevant to political entrepreneurship.

What Lavoie means by culture is “the language in which past events are interpreted, future circumstances are anticipated, and plans of action are formulated.” (Lavoie 2015, p. 49).

He explains that he views culture as a discourse. In that context: “entrepreneurship is the achievement not so much of the isolated maverick who finds objective profits others overlooked as of the culturally embedded participant who picks up the gist of a conversation” (Lavoie 2015, p. 51).

Essays in this series will discuss the implications of significant differences that exist between political and economic entrepreneurship. In politics, voter choices are weakly linked to individual outcomes, decision-making often involves triadic relationships, and political marketing allows greater scope for deception. Moreover, political deal-making lacks a clear success metric comparable to profit in markets, and institutional incentives may attract opportunists rather than principled leaders.

I acknowledge, however, that many political entrepreneurs are motivated by a desire to achieve economic and social objectives that are widely supported in the communities they live in. They are confronted by information constraints. It is often impossible for a central authority to possess and process all the knowledge needed to achieve social and economic objectives without producing adverse, unintended consequences. As new policy initiatives are implemented to reduce those adverse consequences, economic freedom is often further reduced, and adverse economic and social impacts tend to multiply.

Political leaders seeking to restore economic freedom face challenges including entrenched interests and institutional path dependence. Changing formal rules is insufficient without corresponding changes in norms and incentives. I maintain that institutional reform is not solely about electing better leaders at a national level.

In advocating that the social sciences should pay more attention to the role of political entrepreneurship, I am certainly not attempting to promote a “great man theory” of institutional change. Political entrepreneurs rarely act alone, and their influence is constrained by a range of factors that are present to varying degrees in the societies in which they function.

Crucially, libertarian political entrepreneurs are unlikely to have a lasting impact on freedom and flourishing if their influence is confined to national politics. A national leader may play a pivotal role in sweeping away accumulated regulation but a culture supporting liberty and individual flourishing cannot be established and maintained unless many individuals undertake frequent acts of political entrepreneurship in their day-to-day interactions with others.

The structure of the series is as follows:

Part I provides a brief discussion of the links between freedom and flourishing to explain my reasons for focusing on institutions relating to economic and personal freedom. It also explains the meaning of institutions, institutional change, and political entrepreneurship.

Part II considers the extent to which differences in economic and personal freedom in different countries can be attributed to differences in underlying cultural values. It concludes that prevailing culture at a national level offers only a partial explanation of differences in economic and personal freedom levels. There is much left to be explained by other factors, particularly the influence of political entrepreneurship on the ideologies adopted by governments.

Part III discusses similarities between political and economic entrepreneurship.

Part IV discusses the incentives that political entrepreneurs are faced with in the context of the characteristics of politics that make it a peculiar business.  

Part V discusses the motives of political entrepreneurs and the impact of information constraints on pursuit of economic and social objectives.

Part VI considers the consequences of institutional path dependence, first in slowing the emergence of interest group politics and associated detrimental impacts on economic dynamism, and second in making it more difficult for reform-minded political entrepreneurs to restore economic freedom.

Part VII considers whether heroic political entrepreneurship has potential to promote freedom and flourishing. It urges that political entrepreneurship be perceived more broadly than in terms of government leadership.

Part VIII summarizes the series and concludes.

Acknowledgement

I would like to thank Chris Matthew Sciabarra for helpful comments on earlier drafts of some of the material presented in this series. The usual caveat applies. Please do not assume that Chris endorses the views presented here.

References

Lavoie, Don, “The discovery and interpretation of profit opportunities: culture and the Kirznerian entrepreneur”, in Culture and Economic Action, edited by Laura E Grube and Virgil Henry Storr (Edward Elgar, 2015).

Sciabarra, Chris Matthew, Total Freedom: Toward a Dialectical Libertarianism (Pennsylvania State University Press: 2000).

Wagner, Richard E., Politics as a Peculiar Business: Insights from a Theory of Entangled Political Economy (Edward Elgar, 2016).