Part V: What information constraints confront political entrepreneurs?

 This essay is one of a series exploring the topic: What impact does political entrepreneurship have on freedom and flourishing? The series commenced with a Preface which provides a synopsis of the series and explains why I think it is important to obtain a better understanding of political entrepreneurship.

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This essay considers the information constraints confronting central planners and those political entrepreneurs who have less ambitious aims to promote widely accepted economic and social objectives. It is appropriate to begin by considering the motives of political entrepreneurs.

Motives of political entrepreneurs

Many assumptions that economists make about motives of political entrepreneurs are clearly wrong. Political entrepreneurs cannot maximize social welfare functions, even when they seek to promote the well-being of citizens.  They rarely set out to maximize the number of votes they obtain, even though they seek to obtain sufficient votes to win elections. They don’t necessarily set out to maximize the perks of office, or to use their positions to maximize personal wealth, even though such behaviour is common when the institutional context is conducive to it. The claims that many politicians make to be motivated by concerns for the well-being of the population they represent are not always deceitful.

Bryan Caplan suggests that to get ahead in politics, “leaders need a blend of naïve populism and realistic cynicism.” One reason why many politicians have legal training is because “the electoral process selects people who are professionally trained to plead cases persuasively and sincerely regardless of their merits” (Caplan 2007, p.169).

The easiest way to give the appearance of sincerity is to believe in the merits of the case you are pleading. Leon Festinger’s cognitive dissonance theory predicts that when people publicly advocate a position - especially if doing so requires effort or commitment - they tend to adjust their private attitudes to align with their advocacy to reduce internal psychological tension (Festinger, 1957).

Institutional context has important implications for the character of people who are attracted to a career in politics. Unscrupulous opportunists are likely to be attracted to political and bureaucratic positions in which they can obtain personal benefit by using discretionary powers corruptly. F. A. Hayek observed that “the worst get on top” in totalitarian systems because “while there is little that is likely to induce men who are good by our standards to aspire to leading positions in the totalitarian machine, and much to deter them, there will be special opportunities for the ruthless and unscrupulous” (Hayek 1994, pp.166-67).

However, an institutional context that is attractive to unscrupulous opportunists may also attract potential political entrepreneurs who see opportunities for institutional reform. More generally, reform-minded individuals may be motivated to enter politics when they perceive that current practices are resulting in adverse economic and social consequences.

Unfortunately, reform-minded political entrepreneurs are not a panacea. As discussed below, those who advocate further restrictions on individual liberty in their efforts to promote economic and social objectives may make matters worse. And, as discussed in subsequent essays, even when reform-minded political entrepreneurs who advocate greater economic and personal freedom succeed in attaining high office, they face substantial obstacles to achieving their institutional change objectives.

The perils of central planning

In a famous article, F. A. Hayek explained that the data a national planning agency would require to engage in rational economic planning exists only in a dispersed form in the separate minds of millions of people. Hayek observed that individuals possess unique knowledge of “the particular circumstances of time and place”, which they can use for their own benefit, and that of others, only if the decisions depending on it are left to them or made with their active cooperation (Hayek 1945, pp.521-2). Hayek suggested that we should look at the price system as a “mechanism for communicating information” because prices act to coordinate the separate actions of different people (Hayek 1945, p.526).

In The Road to Serfdom, Hayek noted:

“The question raised by economic planning is … not merely whether we shall be able to satisfy what we regard as our more or less important needs in the way we prefer. It is whether we shall be able to decide what is more, and what is less, important for us, or whether this is to be decided by the planner” (Hayek 1944, p.100).

In later writings, Hayek noted that as the adverse consequences of central planning became apparent, it came to have fewer defenders in the liberal democracies. However, arguments were still being advanced in favor of the state’s taking sole charge of providing various services that can be provided privately. He suggested that this also entailed the risk that people would be prevented from using their unique knowledge for their own benefit and would be denied the benefits of competitive experimentation:

“If, instead of administering limited resources under its control for a specific service, government uses its coercive powers to insure that men are given what some expert thinks they need; if people thus can no longer exercise any choice in some of the most important matters of their lives, such as health, employment, housing, and provision for old age, but must accept the decisions made for them by appointed authority on the basis of its evaluation of their need; if certain services become the exclusive domain of the state, and whole professions – be it medicine, education, or insurance - come to exist only as unitary bureaucratic hierarchies, it will no longer be competitive experimentation but solely the decisions of authority that will determine what men get” (Hayek 1960, p.261).  

In a book first published in 1985 Don Lavoie further explained the fundamental knowledge problem that political entrepreneurs are confronted with when they seek to plan economic activities. The most obvious implication is that it is impossible for markets to be replaced by comprehensive economic planning. However, more modest attempts to steer the market towards outcomes which planners consider to be desirable also obstruct the source of knowledge which is essential to rational decision-making (Lavoie 2016, p.56-7).

Lavoie points out that the only way we can know whether we are squandering resources by over- or under-investing in microprocessors or steel, for example, is via “the messages contained in the relative profitability of rival firms in these industries”. He adds:

“But this is precisely the information we garble when we channel money toward one or another of the contenders. Deprived of its elimination process, the market would no longer be able to serve its function as a method for discovering better and eliminating worse production techniques. Without the necessity of responding to consumers’ wants or needs, businesses would never withdraw from unprofitable avenues of production” (p.181).

Lavoie notes that advocates of industry policy disagree on the directions in which the market should be steered. For example, Felix Rohatyn wanted to funnel aid to sunset industries while Robert Reich wanted to funnel it to sunrise industries. He sums up:

“It is the main conclusion of the argument that I have called the knowledge problem … that there are no rational grounds on which Reich could ever convince Rohatyn or vice versa on such matters as are involved in economic change. As a result, such battles are sure to be fought with weapons other than carefully reasoned argument” (p. 200-201).

Lavoie notes that Rohatyn and Reich both argued that it is the responsibility of a strong leader to coordinate the actions of the rest of us (p.190). The coordination they had in mind seems to be more akin to the coordination that military leaders impose by giving orders to subordinates than the coordination among individuals that occurs voluntarily and spontaneously in a free market.

Lavoie argues that economic planning is inherently militaristic: “The practice of planning is nothing but the militarization of the economy”. In making that point he notes that the theory of economic planning was from its inception modeled after feudalistic and militaristic organizations (p. 230).

Some would argue that a degree of militarization is a price worth paying, or even desirable, to achieve a range of national objectives. Indeed, the conventional theory of democracy seems to entail top-down direction. Prior to elections, political leaders tell voters about their plans for education, health, social security etc. and are expected to implement those plans after they are elected. That view seems to imply the existence of some kind of necessary tension between democracy and markets. I will discuss that view later in this essay.

Knowledge required for governance

Gerry Gaus’s final book discusses, among other things, the question of whether the Open Society has evolved beyond “our” governance. Gaus seems to adopt F. A. Hayek’s view of the Open Society (or Great Society) as a society in which coercion of some by others has been reduced as far as possible and individuals are free to use their own knowledge for their own purposes.

Gaus alludes to the knowledge problem when he observes that “we seek to devise policies to improve” the functioning of the Open Society. However, “we do not have the knowledge and competency to do so, hence we are constantly disappointed by the last round of interventions and we blame the last government for its failures and broken promises” (Gaus 2021, p.13).

Gaus points out that when people do not endorse a policy imposed by planners, some tend to evade it. In commenting on the “passive population model”, he writes:

“Unfortunately, this view has been resurrected by those elites who continue to believe that the public is too ignorant to make its own decisions, and so should submit to “epistocracy,” or rule by those who know (aka, them). Not only, however, is such expertise essentially nonexistent in complex systems, but most actual agents in the Open Society are anything but passive materials to be guided by the elite: they are active, reflexive agents who make their own choices. When citizens do not endorse a policy, many will employ their resources to evade it” (Gaus 2021, p.244).

Gaus considers three levels of governance – macro, meso, and micro- and three dimensions of governance – goal directed, strategic, and rules-focused. A goal-directed governor identifies preferred states and seeks to move society toward them. A strategic governor seeks to solve strategic dilemmas to assist citizens to secure outcomes they all want. A rules-focused governor seeks to structure some of the rules of self-organization.

Gaus’s analysis leads to the following conclusions:

• There is little prospect for a governor to successfully pursue macro-level goals in a complex society. For example, efforts to promote development in particular societies are often unsuccessful because institutions cannot readily be transferred from on society to another.
• Attempts to structure the “rules of the game” at a macro level are more promising. In cooperation with the self-organized normative framework of society a governor may effectively shape the rules of self-organization e.g. via civil rights legislation.
• Goal pursuit at the meso level is a dubious enterprise. Pursuit of environmental, economic and welfare-targeted variables is a hit-and-miss affair because our social world is a complex system. It is not linear and determinate, as is often assumed. Successful goal pursuit in a complex world is usually a matter of “muddling through” (sometimes described as learning-based governance).
• Polycentric governance studies show that a focus on problem-solving tends to facilitate effective governance when publics share pressing strategic dilemmas.
• There may be grounds for more optimism about the prospect for micro governance than governance at other levels.

In writing about micro governance, Gaus makes a favourable reference to the work of Abhijit Banerjee and Esther Duflo. Gaus justifies his optimism about micro governance as follows:

 “When changes come up from the more micro levels, not only are they apt to garner the moral endorsement of actual citizens, but the Open Society will possess a diversity of normative networks. Because what works today may be dysfunctional tomorrow, a diversity of approaches is always critical. This itself upsets the moralist, who believes she speaks for the truth about justice, and sees most deviations from her plan as shades of immorality. But many of the diverse publics will not take up her solutions—many citizens will see different problems and possibilities, and their normative beliefs will lead them to different solutions” (Gaus 2021, p.240).

Can democracy be consistent with freedom?

Gaus and Lavoie offer similar views on the compatibility between democracy and freedom. Gaus suggests that “so far from being opposed or in tension, democracy and freedom need each other to thrive.” He suggests that a critical task of the democratic order is to ensure the equality and fairness on which large-scale human cooperation depends. However, unless it is “animated by a spirit of public justification, democracy itself becomes a mechanism by which some seek to impose their valued goals on others in the name of the people” (Gaus 2021, p. 245).

In his discussion of the view that there is some kind of necessary tension between democracy and free markets. Lavoie notes that we tend to think that “taking democracy too far undermines markets and that taking markets too far undermines democracy”. He attributes that view to “liberalism’s gradual drift into compromises with conservatism and socialism” (Lavoie 1993). He suggests that liberalism needs to reinterpret its notions of markets and democracy so that they are seen to be essentially complementary. Our economics needs to take account of the cultural underpinnings of markets and our politics “needs to move beyond the model of the exercise of some kind of unified, conscious democratic will and understand democratic processes as distributed throughout the political culture”. The force of public opinion is best perceived as the distributed influence of political discourses throughout society rather than as “a concentrated will”.

Lavoie argues that what we should mean by democracy is a distinctive kind of openness in society rather than a theory about how to elect the personnel of government:

“Democracy is not a quality of the conscious will of a representative organization that has been legitimated by the public, but a quality of the discursive process of the distributed wills of the public itself” (Lavoie 1993, p.111).

It seems to me that those who see merit in the view of democracy presented by Lavoie and Gaus have good reasons to be skeptical about the worth of top-down planning to achieve national objectives. Individuals have different priorities and objectives that deserve to be recognized. Top-down planning cannot give appropriate recognition to those individual differences. Moreover, given the peculiarities of the business of politics, as discussed in the preceding essay, well-meaning attempts to pursue economic and social objectives that are widely supported within communities are prone to diverted to serve narrow interest groups.

In the following essay I consider the consequences of institutional path dependence, first in slowing the emergence of interest group politics, and second in making it more difficult for reform-minded political entrepreneurs to restore freedom and enhance opportunities for human flourishing.

 

References

Caplan, Bryan., The Myth of the Rational Voter (Princeton University Press, 2007).

Festinger, Leon., A Theory of Cognitive Dissonance (Stanford University Press, 1957).

Gaus, Gerald., The Open Society and its Complexities (Oxford University Press, 2021).

Hayek, F. A., The Road to Serfdom (University of Chicago Press, 1994).

Hayek, F.A., “The Use of Knowledge in Society”, The American Economic Review, XXXV, 4 (1945).

Hayek, F.A., The Constitution of Liberty (The University of Chicago Press, 1960).

Lavoie, Don., National Economic Planning: What Is Left? (Mercatus Center, 2016).

Lavoie, Don., “Democracy, Markets, and the Legal Order: Notes on the Nature of Politics in a Radically Liberal Society” in Ellen Frankel Paul, Fred D. Miller, Jr., and Jeffrey Paul (Eds.) Liberalism and the Economic Order (Cambridge University Press, 1993).

Can discourse ethics help us to assess ideas about justice?

This essay focuses mainly on the discourse ethics of Jürgen Habermas.

Habermas, who will be 95 years old tomorrow, developed a theory of communicative rationality based on the argument that all speech has an inherent goal of mutual understanding and that humans possess the communicative competence to bring about such understanding.

Habermas is a public intellectual, but I haven’t followed his contributions to discussion of topical issues closely enough to judge whether they exemplify the discourse ethics that he advocates. My main reason for interest in Habermas’s discourse ethics is the apparent influence he has had on other philosophers, including Hilary Putnam and Amartya Sen.

In this essay I briefly outline the principles of Habermas’s discourse ethics, the ideological background and motive for his focus on communication, and similarities and differences between his communication ethics and those of Michael Polanyi and Ayn Rand, before briefly discussing whether his discourse ethics offers a normative basis to assess ideas about justice.

Principles

Habermas’s two principles of discourse ethics relate to the philosophical justification of a moral standpoint. The first concerns consensus (or possible consensus):

Only those norms can claim to be valid that meet (or could meet) with the approval of all in their capacity as participants in a practical discourse.

The second is a generalizability rule, or principle of universalization:

All affected can accept the consequences and the side effects its general observance can be anticipated to have for the satisfaction of everyone’s interests (and these consequences are preferred to those of known alternative possibilities).  

(For references, please see the entry on Habermas in the Stanford Encyclopedia of Philosophy.)

Ideological background and motive

The context in which Habermas developed his ideas about communication has been explained by Chris Sciabarra in Marx, Hayek, and Utopia. Sciabarra explains Habermas’s project as an outgrowth of the Frankfurt school, which “attempted to recapture the dialectical method of Marx, while maintaining a Marxist faith in the human triumph over unintended consequences” (Chapter 7)

Friedrich Hayek argued that any attempt by an individual or group of individuals to produce social change would inevitably have unintended consequences. Hayek argued that achievement of Karl Marx’s historical projection of a communist utopia would require a different kind of species capable of total knowledge of the consequences of their actions, rather than humans who are only capable of partial knowledge.

Sciabarra presents Habermas’s ideas about communication as a reconstruction of Marx’s project to focus on empirical conditions under which people could engage in practical, transformative social action. Habermas’s ideal society is one based on non-exploitative social relations. He views all social systems as networks of communicative actions, and argues that the institutions of power depend on and perpetuate a distorted form of social communication.

Habermas argues that if people could master ideal speech they would move towards the goals of truth, freedom and justice. One of the important characteristics of ideal speech is that the speaker must want to express his intentions truthfully so that the hearer can believe in (or trust) the utterance of the speaker. Participants learn to trust one another and share value orientations when speech is free from deception and other forms of communicative distortion. Habermas suggests that social consensus will emerge as people achieve communicative competence. (My intention is to convey the gist of Habermas’s argument without distorting it but my account has all the limitations of a summary of a summary.)

Comparison with Polanyi and Rand

Michael Polanyi was a polymath whose understanding of the importance of tacit knowledge was largely endorsed by Hayek. Sciabarra presents a quote from Polanyi which suggests that his position on communication differs little from that of Habermas. Both emphasised the importance of trust in communication and the potential for shared values to emerge from dialogue. However, Sciabarra also notes a crucial difference between them. While Habermas argued that the tacit component of dialogue could be fully articulated, Polanyi held that this was not possible.

Habermas argues that depth hermeneutics, a form of psychoanalysis, could make explicit the tacit causal connections that take place in an individual’s subconscious, overcoming blocks to consciousness, and enabling a reintegration to occur. One goal of this process is intersubjectivity – enabling participants in discussions to exchange roles with one another in expressing their needs and interests.

Sciabarra discusses the similarity and differences between Ayn Rand’s communication ethics and those of Habermas in Ayn Rand: The Russian Radical. Rand recognized that honesty is an essential component of rational human relations and fully understood the exploitive nature of strategic forms of communication. Rand’s followers emphasize that self-deception is distortive of an individual’s efficacy and communicative competence.

Sciabarra suggests that an “emphasis on communicative truthfulness, self-awareness, and “de-repression” is as crucial to the Randian project as it is to Habermasian discourse theory”. (293) He suggests that “she sustained a belief in a conflict-free society of individuals united by their common love for the same values” (355). However, Rand’s values differed from those of Habermas: She “would have vehemently rejected Habermas’s emphasis on “intersubjectivity” and the social consensus of norms”. (291)

Relevance to ideas about justice

If we are seeking to reach agreement with others it seems obvious that we should seek to understand the basis for their points of view. For example, if a person is engaged in a discussion with his or her spouse about who should cook dinner, agreement is more likely if each party understands why the other might or might not want to cook on a particular day.

In the example I have just given, both parties have a strong incentive to reach agreement to enable a harmonious relationship to continue. It is also possible to think of contexts at a societal level where people have a strong incentive to reach agreement and are willing to set aside differences in current interests in making collective decisions. James Buchanan and Gordon Tulloch suggested that when individuals are considering constitutional rules that they expect to be in place for a long time, they may be able to set aside current interests because they are uncertain about what their interests will be in any of the long chain of collective choices made according to those rules. (The Calculus of Consent) I wonder if Habermas would approve if the participants in a constitutional convention agreed to rules protecting individual rights to property ownership.

This brings me to a fundamental problem with Habermas’s generalizability rule. Douglas Rasmussen pointed this out. (‘Political legitimacy and discourse ethics’, International Philosophical Quarterly, March 1992) According to Habermas, the “moral point of view” requires one to consider the satisfaction of one’s own needs and interests from an impersonal point of view – from a point of view which treats the fact that some needs and interests are uniquely yours as being of no consequence. Rasmussen points out that this so called “moral point of view” is not compatible with the moral reasoning of real people in real situations:

“One cannot even recognize his own life as his and his own reasoning as his very own if in order to play the moral game one must forgo all special attachments to ends that are uniquely one’s own.” (30)

Rasmussen concludes by noting that values associated with modernity, including recognition of the inherent worth of the individual human being, are inconsistent with Habermas’s “moral view”:

“Such a modern view, then, does not call for theoretical attempts to paper over the real and legitimate differences among the values and projects of individuals by attempting artificially to induce consensus through a generalizability of interests rule or by appealing to the so called “moral point of view”. Rather, it requires that one accept the moral propriety of pluralism and individualism, and from this starting point attempt the difficult task of constructing a theory of justice.” (34)

Conclusions

Jürgen Habermas has proposed that principles of discourse ethics can provide a normative basis to assess ideas about justice.

Habermas developed his principles of discourse ethics while reconstructing Marx’s project. He envisaged that the potential for “ideal speech” could enable a social consensus to emerge for movement towards the goals of truth, freedom, and justice.

Habermas’s discourse ethics is similar in some respects to the views of communication ethics advocated by Michael Polanyi and Ayn Rand. However, unlike Polanyi, Habermas argued that the tacit component of dialogue could be fully articulated. Unlike Rand, Habermas argued for intersubjectivity, which amounts to adoption of an impersonal point of view.

There is a fundamental problem in applying Habermas’s principles of discourse ethics to assess ideas about justice. Habermas’s generalizability rule seeks to artificially induce consensus by papering over legitimate differences among values held by individuals. 

Addendum

Readers may also be interested in Chris Sciabarra's discussion of possible libertarian applications of Habermas's view in a section on "Dialogical Models" in libertarian thought, in Chapter 9 of "Total Freedom". That section surveys various thinkers in Austrian and libertarian traditions. 

How different were the views of Hayek and Rand on the role of reason?

 

I think many people who have some knowledge of the views of Ayn Rand and Friedrich Hayek have the impression that they had vastly different opinions on the role of reason. I certainly had that impression until recently.

I have changed my mind since reading Ayn Rand: The Russian Radical, by Chris Sciabarra.

In what follows, I begin by explaining why I had the impression that Rand and Hayek had vastly different views about reason, then outline why Sciabarra considers their views are similar in some respects, and follow that by attempting to identify the most important area of difference between them.

Opposing views?

The best way to explain why I thought Ayn Rand and Friedrich Hayek had vastly different views about reason is via some quotes.

Rand wrote:

“Rationality is man’s basic virtue, the source of all his other virtues.”

“The virtue of Rationality means the recognition and acceptance of reason as one’s only source of knowledge, one’s only judge of values and one’s only guide to action.” (Quotes from The Virtue of Selfishness, 1961, 31)

Hayek wrote:

“Like all other values, our morals are not a product but a presupposition of reason, part of the ends which our intellect has been developed to serve. At any one stage of our evolution, the system of values into which we are born supplies the ends which our reason must serve.” (The Constitution of Liberty, 1960, 63)

Chris Sciabarra notes that Rand recognized that individuals tacitly absorb the dominant values and ideas of the culture in which they live. (193) They develop the essentials of a “subconscious philosophy” from the earliest impressions of their childhood. (298) However, she saw each individual’s articulation of values and attitudes as a means towards rational integration or alteration, and analysis of values and attitudes at a social level as a means toward their explicit articulation or transcendence. (299)

While Hayek argued that reason helps us to observe social rules that enable us to get along with one another, he also argued that coercion to ensure compliance with those rules should be minimal. That was not only because coercion as such is bad, but because it is often desirable that social rules “should be observed only in most instances and that the individual should be able to transgress them when it seems to him worthwhile to incur the odium which this will cause”. He saw the system of values into which we are born as having emerged via social evolution. (COL, 58-9) He noted that “the existence of individuals and groups simultaneously observing partially different rules provides the opportunity for the selection of the more effective ones”. (COL, 63)

Hayek also recognized that “we must always strive to improve our institutions”, thus allowing for the possibility that conscious efforts in that direction could be successful. However, he suggested that we “can never synthetically construct a new body of moral rules” and “must take for granted much that we do not understand”. (COL, 63)

It seems to me that although Rand was more optimistic than was Hayek about the role of reason in enabling improvements in cultural values, their views about the role of reason were not diametrically opposed. Both recognized that individuals may have good reasons to question the dominant values of the culture in which they live.

Similar views about rationalism

Chris Sciabarra notes that Ayn Rand saw knowledge as the product of a conceptual integration of the facts of reality. She agreed with rationalists that human awareness is distinctly conceptual but departed from their view because they based their analyses on “floating abstractions” – dogmatic acontextual premises - rather than on concepts with perceptual roots. Leonard Peikoff, Rand’s close associate, has argued that rationalists pretend to have omniscience.

 Sciabarra suggests that Rand and her intellectual allies would have agreed with Hayek’s assessment that constructivist rationalism – the belief that deliberately planned social constructions produce outcomes that are superior to those of the spontaneous order of a free society - is an inappropriate extension of the Enlightenment faith in reason. He suggests that the crux of both Rand’s and Hayek’s critique of rationalism is as follows:

“The failure of rationalism was not a failure of reason. By ascribing to human beings the attributes of an omniscient deity, and then condemning human reason for not fulfilling this ideal, rationalists attack the genuine legitimacy of human cognition. Rand argued that this destructive pattern is reproduced by the advocates of altruism, who erect an impossible, self-abnegating standard of morality and then indict humanity for not being able to live up to it.” (212)

Hayek observed that constructivist rationalists tend to base their case on the synoptic delusion, “the fiction that all the relevant facts are known to some one mind, and that it is possible to construct from this knowledge of the particulars a desirable social order”. There is additional discussion of Hayek’s view of constructivist rationalism my recent essay: Did Hayek acknowledge the importance of individual self-direction in his vision of spontaneous order?

The most important difference?

I think the most important difference between Hayek and Rand about the role of reason concerns their differing views about the desirability of articulation of the rules underlying skills and customs of thought. As Sciabarra explains, Hayek acknowledged that the articulation of principles can be useful in transmitting know-how but noted that people often pass on know-how from generation to generation without being able to articulate the underlying principles involved. He quotes Hayek:

“Man has more often learnt to do the right thing without comprehending why it was the right thing, and he is still more often served by custom than by understanding.” (197-8)

Sciabarra points out that Rand believed that the articulation process was essential in the realm of morality because it enabled individuals not only to do the right thing but to know why it was the right thing to do. Rand held that an articulated philosophy is necessary for efficacious living: to live efficaciously it is necessary to choose, to choose it is necessary to define values, to define values it is necessary to know one’s own nature and the nature of the world. (200)

Rand proclaimed that the standard of value of the Objectivist ethics is “man’s life, or that which is required for man’s survival qua man”:

“Man has to be man—by choice; he has to hold his life as a value—by choice; he has to learn to sustain it—by choice; he has to discover the values it requires and practice his virtues—by choice.” (The Virtue of Selfishness, 28)

Personal perspective

I think Ayn Rand went too far in her assertions about choice and Friedrich Hayek went to too far in his assertions about the limits of human understanding.

I find it difficult to comprehend Rand’s assertion that humans have to choose to live. Does a new-born baby choose whether to accept the nourishment being offered by his or her mother? 

Some of Rand’s followers have attempted to explain that the choice to live is a fact inherent in the conditional nature of human life itself, but that seems to me to cloud the meaning of choice, and make it difficult to distinguish a choice from a survival instinct.

As I see it, rather than choosing whether to live or not live, it is more in accord with human nature for individuals to seek to discover or recognize what it means to be a human. As Henry Veatch wrote:

“We could say that this natural end or natural disposition of a human being is something pre-rational or pre-intelligent: it is just a fact that reason can do no more than recognize. And yet – and here is the decisive point – having come to recognize this pre-rational and pre-intelligent end, our human intelligence then sees that it is man’s natural end and hence the proper end for a human being to seek. It thus becomes an end which we do not seek merely in fact and automatically, toward which we are impelled uncritically and unreflectingly, but rather an end that we see that we have reason to seek and which we recognize as being the right and proper end for us as human beings.” (Rational Man, 79)

It is necessary to be aware of your natural end as a human being before making choices about what that potential means for the way you live your life.

In my recent post about Friedrich Hayek, referred to earlier, I suggested that he sometimes went too far in downplaying the ability of humans to understand the significance of abstract rules. I argued that most people are capable of understanding the purposes served by rules of just conduct and that it makes more sense to explain those purposes than to suggest that reverence for the traditional should be sufficient reason for compliance.

Conclusions

The views that Ayn Rand and Friedrich Hayek held about the role of reason are not as far apart as I had thought them to be prior to reading Chris Sciabarra’s book, Ayn Rand: The Russian Radical.

Rand was more optimistic than Hayek about the role of reason in enabling improvements in cultural values but they both recognized that individuals may have good reasons to question the dominant culture in which they live.

Sciabarra argues that Rand’s intellectual allies would agree with Hayek’s denunciation of the constructivist rationalism of those who believe they knew enough about human nature to plan a perfect society. Rand’s allies also condemn rationalists for ascribing to humans the attributes of an omniscient deity.

In my view, the most significant difference between the views of Rand and Hayek concerns the desirability of articulation of reasons for adherence to moral rules. I agree with Rand on that point.

Despite my disagreements with some of the views of both Rand and Hayek on the role of reason, I agree with what I see as the central elements of their views on this topic. I strongly support Rand’s view that it is necessary for individuals to have an articulated philosophy if they are to live efficaciously, and I strongly support Hayek’s denunciation of constructivist rationalism.

Did Hayek acknowledge the importance of individual self-direction in his vision of spontaneous order?

 

One of the reasons why Friedrich Hayek’s vision of spontaneous order is more attractive than collectivist alternatives is because it offers individuals greater opportunities for self-directed flourishing. However, the question arises of whether Hayek may have undermined the appeal of his vision by presenting a view of the limitations of human reason that leaves little room for individual self-direction.

In exploring this question, I sketch out the importance of self-direction to human flourishing, Hayek’s objections to constructivist rationalism, Hayek’s reverence for tradition and social evolution, Hayek’s attitude to free will, and the role of human agency in Hayek’s account of spontaneous order.

Importance of self-direction

 In helping make the case that “self-direction is the central necessary constituent or ingredient of human flourishing” Douglas Den Uyl and Douglas Rasmussen quote Aristotle and Henry Veatch, a leading neo-Aristotelian of the 20^th century. Veatch writes:

“Is it not evident that not only does a human being not attain his natural end by an automatic process of development and maturity after the manner of a plant or animal? In addition, no human being ever attains his natural end or perfection save by his own personal effort and exertion. No one other than the human individual – no agency of society, of family, of friends, or of whatever can make or determine or program an individual to be a good man, or program him to live the life that a human being ought to live. Instead, attaining one’s natural end as a human person is nothing if not a ‘do-it-yourself’ job.” (The Perfectionist Turn, 51-2)

The errors of constructivist rationalists

Chris Sciabarra makes an important point about Hayek’s anti-rationalistic beliefs:

“His enemy is not reason but the constructivists who have “historically again and again given birth to a revolt against reason”. (Total Freedom, 131)

Hayek observes that constructivist rationalists - enthusiasts for a deliberately planned society - tend to base their case on the synoptic delusion, “the fiction that all the relevant facts are known to some one mind, and that it is possible to construct from this knowledge of the particulars a desirable social order”. (LLL, v1, 14) Hayek argues that by over-estimating the powers of reason, constructivist rationalism has given birth to a revolt against the wisdom embodied in abstract rules, including rules of just conduct, which tell us what not to do. (LLL, V1, 31-34) The abstract rules protect individuals from arbitrary violence by others and enable them to try to build for themselves a protected domain with which nobody else is allowed to interfere and within which they can use their own knowledge for their own purposes. (LLL, V3, 163)

Hayek’s reverence for tradition and social evolution

In my view, Hayek sometimes went too far in downplaying the ability of humans to understand the significance of abstract rules. For example, in one instance he claimed that “submission to undesigned rules and conventions whose significance we largely do not understand, this reverence for the traditional, that the rationalistic mind finds so uncongenial, … is indispensable for the working of a free society”. (COL, 63) It seems to me that most people are capable of understanding the purposes served by rules of just conduct. It makes more sense to explain those purposes than to suggest that reverence for the traditional should be sufficient reason for compliance.

The emphasis which Hayek placed on group selection in the evolutionary process also downplays the potential role of reason. Hayek argues that rules of just conduct evolved because the groups which practiced them were more successful and displaced others. (LLL, V1, 18) James Buchanan pointed out that there is no reason to believe that group survival will always lead to a more beneficial state of affairs. Chris Sciabarra makes the same point, also noting that Hayek does not provide an objective standard by which to judge as desirable or undesirable the consequences of spontaneous orders. (Total Freedom, 131)

Buchanan suggests that Hayek’s skepticism about the ability of humans to rationally design social institutions, including constitutions, precludes any attempt at reform. In their excellent discussion of this point, Peter Boettke and Scott King suggest that the issue has been confused by conflating the question of the origin of institutions with questions relating to the development and improvement of institutions. They note that Hayek is open to attempts to improve spontaneous orders through small revisions in the overall rules. (I refer to the chapter entitled ‘Hayek and the Hayekians on the Political Order of a Free People’, in Hayek’s Tensions: Reexamining the Political Economy and Philosophy of F. A. Hayek, edited by Stefanie Haeffele, Solomon M. Stein, and Virgil Henry Storr.)

Hayek’s attitude to free will

Discussions of Hayek’s attitude to free will often begins with his venture into theoretical psychology in The Sensory Order, published in 1952. When I read the ‘Philosophical Consequences’ chapter of that book, about 30 years ago, I gained the impression that Hayek was an advocate of free will. Hayek certainly rejects the idea that it is possible to explain why people hold particular views, at particular moments, from knowledge of their material circumstances. Immediately afterwards, in discussing free will more explicitly, Hayek asserts:

“To us human decisions must always appear as the result of the whole human personality – that means the whole of the persons mind – which, as we have seen, we cannot reduce to something else.” (See page 250 of “The Essence of Hayek”, 1984 by W. Glenn Campbell (Foreword), Kurt R. Leube (Editor), Chiaki Nishiyama (Editor).

Hayek based his argument against microphysical reductionism on the belief that the human brain can never fully explain its own operations. Paul Lewis has suggested that if Hayek had relied more fully on the ideas of organismic biologists he would have been able to develop an emergentist argument against microphysical reductionism, thus providing a stronger basis for use of concepts such as goals and purposes. (See Lewis’s chapter entitled ‘Tensions and Ambiguities in Hayek’s Social Theory’ in Hayek’s Tensions, cited above. Those who are interested in reading a philosophical emergentist argument for free will can find one in the The Metaphysics of Emergence, by Richard Campbell. I reviewed the book here.)

In The Constitution of Liberty, Hayek offers a potted summary of the free will debate. He notes that the concept of universal determinism that dominated 19th century science seemed to eliminate the possibility of free will. He also notes that physicists have now abandoned universal determinism but doubts that this affects “the puzzle about the freedom of the will”. He then states:

“It appears that the assertion that the will is free has as little meaning as its denial and that the whole issue is a phantom problem, a dispute about words in which the contestants have not made clear what an affirmative or negative answer would imply.”

However, Hayek’s subsequent discussion of the conclusions generally drawn by determinists and voluntarists about their respective positions leaves little doubt about where he stands:

“The determinists usually argue that, because men’s actions are completely determined by natural causes, there can be no justification for holding them responsible or praising or blaming their actions. The voluntarists, on the other hand, contend that, because there exists in man some agent standing outside the chain of cause or effect, this agent is the bearer of responsibility and the legitimate object of praise and blame. Now there can be little doubt that, so far as these practical conclusions are concerned, the voluntarists are more nearly right, while the determinists are merely confused.” (COL, 72-73)

In discussing the difference between “inner freedom” and the absence of coercion, Hayek had already made clear his belief that it is possible for a person to be guided by “considered will”, “reason or lasting conviction, rather than by momentary impulse or circumstance”. He adds:

“If a person does not succeed in doing what, after sober reflection, he decides to do, if his intentions or strength desert him at the decisive moment and he fails to do what he somehow wishes to do, we may say that he is ‘unfree,’ the slave of his passions.” (COL, 15)

Later, Hayek asserts:

“The recognition that each person has his own scale of values which we ought to respect, even if we do not approve of it, is part of the conception of the value of the individual personality. (COL, 79)

The role of individual human agency

In The Road to Serfdom, Hayek wrote:

“Freedom to order our own conduct in the sphere where material circumstances force a choice upon us, and responsibility for the arrangement of our own life according to our own conscience, is the air in which alone moral sense grows and in which moral values are daily re-created in the free decision of the individual. Responsibility, not to a superior, but to one’s conscience, the awareness of a duty not exacted by compulsion, the necessity to decide which of the things one values are to be sacrificed to others, and to bear the consequences of one’s own decision, are the very essence of any morals which deserve the name.” (231-2)

That statement seems to me to be broadly consistent with the do-it-yourself job of being a good person, as described by Henry Veatch. However, some of the things that Hayek wrote later give a different impression. In The Constitution of Liberty, he advocated submission to rules and conventions, quoting David Hume’s assertion that “the rules of morality are not the conclusions of our reason”. (63) In Law, Legislation and Liberty, Hayek writes:

“Man is as much a rule-following animal as a purpose-seeking one.”

Mario Rizzo has suggests (in a paper entitled, ‘F.A. Hayek and the Rationality of Individual Choice’) that Hayek’s mature views about rationality should be understood in terms of a general framework acknowledging that humans are both purposeful agents and rule-followers. In emphasizing the importance of rule-following behaviour, Hayek didn’t abandon individual rationality. Even at the purely individual level, leaving aside the need to coordinate plans with others, rule-following makes sense because we live in a world of uncertainty and because our minds have limited capacities to know and compute.

Hayek seems to have rarely considered individual agency apart from the spontaneous order. The following paragraph provides a good summary of his perspective:

“What makes men members of the same civilization and enables them to live and work together in peace is that in the pursuit of their individual ends the particular monetary impulses which impel their efforts towards concrete results are guided and restrained by the same abstract rules. If emotion and impulse tells them what they want, the conventional rules tell them how they will be able and be allowed to achieve it.”

Personal perspective

Did Friedrich Hayek undermine the appeal of his vision by presenting a view of the limitations of human reason that leaves little room for individual self-direction? In his efforts to counter constructivist rationalism, I think Hayek inadvertently understated the role of human reason in individual flourishing. However, if individuals have greater potential for self-directed flourishing than Hayek thought possible, that makes spontaneous order a more attractive option.

In assessing Hayek’s views on the role of self-direction in individual flourishing it is important to recognize that advising individuals how best they could flourish was incidental to his main purpose. One way to illustrate that is by reference to my book, Freedom, Progress, and Human Flourishing. I draw fairly extensively upon Hayek’s wisdom in the first part of that book in discussing topics such as the definition of liberty, rules of just conduct, transmission of ancient law to the modern world, and evolution of social norms.

I only mention Hayek’s contribution once in the chapter discussing the challenge of self-direction. His views are referred to in that context not to emphasize the difficulty of self-direction but to counter the view that we (humans) are prone systematically to make serious mistakes in the individualized pursuit of happiness. I draw attention to the fact that Hayek urged respect for social norms that embody the experience of generations in advocating a legal and social order consistent with pursuit of happiness by individuals. (150-1)

In retrospect, I could also possibly have drawn on Hayek to point out implications of the fact that reasoning is cognitively demanding. In pursuing our personal goals it often makes more to sense for us to choose rules (norms) to follow, based on our own previous experience and the experience of others, than to attempt to reason our way through life by treating every issue that arises as though nothing similar has ever previously been encountered in human history.  

Did Ayn Rand recognize the capacity to exercise practical wisdom as a basic good?

 This question is of interest to me for two reasons. First, I am a fan of Ayn Rand’s novels. Second, in the first chapter of my book, Freedom, Progress, and Human Flourishing, I seek to identify the basic goods that a flourishing human could be expected to have.

My view of basic goods

The chapter identified the basic goods as: wise and well-informed self-direction, health and longevity, positive relationships, living in harmony with nature, and psychological well-being. I suggested that the exercise of wise and well-informed self-direction helps individuals to obtain other basic goods.

The chapter also noted that Aristotle saw the exercise of reason as the function that distinguishes humans from other animals and held that a good man’s purpose is to reason well (and beautifully).

I argued that individuals develop and realize their potential for wise and well-informed self-direction largely by learning from experience. I therefore accepted implicitly that it is good for adults to have a capacity to self-direct even if they make choices that on mature reflection they might later regret.

Rand’s view

Until recently, I was fairly sure that my view of what is good for humans was broadly similar to that of Ayn Rand. Some of the things she wrote suggest that impression was correct. For example, John Galt’s speech (quoted above) suggests that it is good for humans to have the capacity to exercise practical wisdom. A similar sentiment is expressed in the following passage in the chapter, ‘What is Capitalism?’ in Capitalism: The unknown ideal:

“Man’s essential characteristic is his rational faculty. Man’s mind is his basic means of survival – his only means of gaining knowledge.”

However, later in that essay, in endorsing “the objective theory” of the nature of the good, Rand rejects the idea that good can be an attribute of things in themselves:

“The objective theory holds that the good is neither an attribute of ‘things in themselves’ nor of man’s emotional states, but an evaluation of the facts of reality by man’s consciousness according to a rational standard of value.”

It seems to me that Rand is suggesting that it would not be legitimate to say that the capacity to exercise practical wisdom – which is a thing in itself - is a good attribute for an individual to have, irrespective of how it is used. Rand seems to be implying that having the capability is only good when it is used to make evaluations according to a rational standard of value.

Grades of actuality

Douglas Rasmussen and Douglas Den Uyl (the Dougs) seem to me to provide a less ambiguous approach to considering the nature of the good in a recent article in which they compare their Individualistic Perfectionism (IP) to Rand’s Objectivist Ethics (OE). (‘Three Forms of Neo-Aristotelian Ethical Naturalism: A Comparison’, Reason Papers 43, 2, 14-43, 2023.)

The Dougs acknowledge that a person does not have a concept of moral good apart from the self-directed use of their conceptual capacity. The human good is individualized. It is good for a human being to engage in the act of discovering human good.

However, the Dougs suggest that the process of discovering the human good can be thought of in terms of grades of actuality:

“IP holds with Aristotle that there is a distinction between grades of actuality when it comes to living things. The first grade of actuality is the possession of a set of capacities that are also potentialities for a living thing’s second grade of actuality—that is, their actual use or deployment by a living thing. Included among the set of potentialities of a human being that comprise its first grade of actuality is the potential to exercise one’s conceptual capacity. This first grade of actuality is a cognitive-independent reality. However, when one’s conceptual capacity is exercised and used in a manner that actualizes the other potentialities that require it, then a second grade of actuality is attained. For example, one has the capacity to know one’s good and attain it (first grade of actuality), but one needs to engage in knowing and attaining it in order to be fully actualized (second grade of actuality).”

One’s inner nature

In 2008 I wrote a blog post on the topic, ‘Is our inner nature good?’. The post consisted of a discussion of the views of Abraham Maslow, Aristotle, J S Mill, David Hume, and Jonathan Haidt and Fredrik Bjorklund. My outline of the views of Abraham Maslow is reproduced below because it seems relevant to the current discussion.

Abraham Maslow suggested that humans have an inner nature or core which is good. According to Maslow this inner core is “potentiality, but not final actualization”. He argued that in principle our inner core can easily self-actualize, but this rarely happens in practice due to the many human diminution forces including fear of self-actualization and the limiting belief in society that human nature is evil (“Toward a Psychology of Being”, 1968, chapter 14).

On reflection, I am not sure that the concept of an inner nature makes much sense. However, the idea that all humans have good potentiality is appealing.

Conclusions

In my view it is good for adults to have a capacity to self-direct even if they make choices, that on mature reflection, they might later regret.

I am unsure whether Ayn Rand would have agreed. At one point she seems to imply that a capacity to exercise practical wisdom is only good when it is used to make evaluations according to a rational standard of values.

Douglas Rasmussen and Douglas Den Uyl offer a less ambiguous approach by recognizing different grades of actuality. They suggest that the first grade of actuality is cognitive-independent. On that basis, there is no reason to doubt that the potential to exercise practical wisdom is good.

I like the idea that all humans have good potentiality.

Postscript

My understanding of the quoted passage by Doug Rasmussen and Doug Den Uyl is as follows:

Though we must use our minds and act in the appropriate manner to self-actualize, that is, to attain our second grade of actuality, it does not follow from this that what is being actualized is merely a potentiality.  Rather, it is a cognitive-independent actuality that also has potentialities.  The distinction between actuality and potentiality in the case of living things does not require a dichotomy. It is not 'either-or'. Aristotle is subtle.

Moreover, though attaining one's second grade of actuality requires both cognition and practical actions to exist, this does not make human good simply an evaluation (which Rand claims). To hold that an objective view of human good is an evaluation is a further non sequitur.  Consider this analogy:  Phar Lap was a thoroughbred racehorse, as such he would not have existed without much human thought and effort, and in terms of the function of racehorses he was very good.  But the reality of his goodness did not consist in our evaluation of him as good but in how well he fulfilled his function. The same is so for human beings, mutatis mutandis.  Humans attaining their second-grade of actuality does require cognitive effort and choice, but this does make the goodness thereby expressed merely an evaluation.

Further Reading

I was prompted to write this contribution by my reading of two recent essays on The Savvy Street:

Ed Younkins, Objectivism and Individual Perfectionism: A Comparison; and

Roger Bissell, Ayn Rand’s Philosophy Decoded: Replies to Recent Criticisms of the Objectivist Ethics.

Roger Bissell has also responded to this essay.

I encourage anyone wishing to obtain a better understanding of the issues to read those articles as well as the article by the Dougs referred to above.