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.

Do people obtain more benefit from a walk in the park than from a walk in the suburbs?

 

I have previously written on this blog about the relationship between nature connectedness and happiness. In one essay, written in 2015, I referred to a meta-study (by  Diana Bowler et al) which suggested that exercise in natural environments promotes greater emotional health benefits – in terms of feelings of energy, and less anxiety, anger, fatigue and sadness - than exercise in an artificial environment. 

Since that study was undertaken there has been further research on the benefits people obtain from exercise in the natural environment.  I focus here on the conclusions of a review of experimental studies on psychological benefits of outdoor physical activity in natural versus urban environments. The review was authored by Claire Wicks , Jo Barton , Sheina Orbell , and Leanne Andrews, and published in Appl Psychol Health Well Being, 2022 Aug;14(3):1037-1061.

Natural versus Urban Environments

The authors identified 24 experimental studies which met their eligibility criteria, including a focus on psychological outcomes, broadly defined to include well-being, self-esteem, depression, anxiety, mood, and stress.

In the included studies, the natural environment includes forest, grasslands, nature reserves and urban parks. The urban environment includes commercial districts, city areas and residential streets.

The most common physical activity in the studies was walking.

The authors hypothesized that physical activity in nature would provide more favourable results for all psychological outcomes.

I focus here on the narrative synthesis of findings which was conducted across all studies. The authors conclude:

“Although there are some inconsistencies across outcomes, this analysis revealed results generally supporting our hypothesis. The majority of tests showed greater benefits following green exercise for anxiety, anger/hostility, energy, general affect and engagement, whereas four out of 10 tests found in favour of the natural environment for depression and one in four for tranquillity. Where studies did not find in favour of the natural environment, the results often indicated either favourable changes in both conditions or no changes in either condition.”

A personal view

I believe that most humans have deep-seated intuitions about their kinship (relatedness) to other living things. That led me, in Freedom, Progress, and Human Flourishing, to agree with the view that living in harmony with nature is intrinsic to individual flourishing and should be acknowledged as one of the basic goods of a flourishing human.  If living in harmony with nature is intrinsic to individual flourishing, I think it is reasonable to expect that exercising in the natural environment would provide greater psychological benefits than exercising in urban environments.

I walk regularly in a park close to where I live and obtain psychological benefits from doing so. I try to persuade others to do likewise.

However, I think my testimony about the benefits I obtain from walking in natural environments might be treated with some skepticism because of my belief that living in harmony with nature is intrinsic to individual flourishing. It is possible to argue that the psychological benefits that I obtain can be attributed to acting in accordance with my beliefs rather than to the impact of nature.

I am drawing attention to the findings of survey discussed above in the hope that it will receive serious consideration. Hopefully, it will induce more people to obtain the benefits of a walk in the park, and some of them will be led to view living in harmony with nature as intrinsic to their personal flourishing.

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.  

Why do I consider myself to be a neo-Aristotelian classical liberal?

 

I pondered the above question as I read Fred D Miller’s book, Nature, Justice, and Rights in Aristotle’s Politics (published in 1995). Although some of Aristotle’s politics is challenging to classical liberals, Miller mounts a strong case that it is not anachronistic to attribute to Aristotle a concept of individual rights and support for a moderate degree of individualism.

Neo-Aristotelian classical liberals are not overly interested in defending Aristotle’s politics. They seek to have their own ideas assessed on their merits rather than in terms of the extent to which they agree with Aristotle's writings. Nevertheless, they have good reasons to label themselves as neo-Aristotelian – they draw inspiration from Aristotle.

Neo-Aristotelian classical liberals certainly appreciate Aristotle’s recognition of reality and his approach of attempting to understand the nature of the world in which we live. However, it is not necessary to be any kind of Aristotelian to follow Aristotle in that regard. In an earlier essay I argued that John Sellars had adopted an excessively broad view of what it means to be an Aristotelian by suggesting that all who join Aristotle in attempting to understand the nature of the world are Aristotelians. I argued that Aristotelians seek guidance from Aristotle’s ethics.

In my view it is Aristotle’s views on the nature of humans and individual flourishing that offer greatest inspiration for classical liberals. I think neo-Aristotelian classical liberals obtain inspiration from Aristotle mainly because they perceive him to have embraced an important role for individual self-direction. In what follows I draw upon Fred Miller’s book to explain why that is justified.

Aristotle’s account of individual flourishing

Aristotle identifies human flourishing with actualization of the potential of individuals. Miller suggests:

“Aristotle’s theory is perfectionist in the sense that it presupposes a theory of human nature and identifies the good with the fullest possible development of this nature.”

Aristotle identifies the good as “that for which everyone strives” but is not a perfectionist in the sense of insisting that anything short of perfection is unacceptable. For Aristotle, perfection provides an objective standard against which we can judge which of the things we might wish for are more choice-worthy. The good is both desirable and choice-worthy.

Aristotle maintains that rationality is the essential function of a human. He sees this function as stemming from the nature of human beings as a particular kind of organism. He argues that it is good for individuals to promote this function.

Miller notes Aristotle’s claims that virtuous acts must be chosen by the agent for their own sakes, that true self-love is embodied in persons who act according to their own judgement, and that the exercise of reason, in contrast to perception, is voluntary and up to the agent. He summarises:

“Those claims together seem to imply that rationality, virtue, and happiness are essentially free and voluntary”.

Miller also notes that Aristotle “relegated liberty to the status of a mere external good” and “prescribed frequent intrusions on individual freedom of choice in the pursuit of liberty”. However, he observes:

“None the less, it has been argued that Aristotle provided the theoretical basis for a more central role for self-directedness or autonomy”.

The references he cites of authors taking that position include some works by Douglas Rasmussen and Douglas Den Uyl. With the benefit of advances in knowledge, it seems to me that the foundations for Aristotle’s views supporting individual self-direction are much stronger than the foundations for his views supporting slavery, a subordinate role for women, and a role for the state in moral development of adult citizens.  

Neo-Aristotelian classical liberalism

 In The Perfectionist Turn (2016) Douglas Rasmussen and Douglas Den Uyl write:

“Succinctly stated, human flourishing is understood by us to mean the exercise of one’s own practical wisdom.”

They argue that “human flourishing and the goods and virtues that constitute it” cannot “be adequately understood apart from the actualization of human nature”. They assert that “holding that human flourishing is the ultimate end and good for human beings is compatible with there being many diverse forms of human flourishing and with self-direction being vital to the very actuality of human flourishing”.

Rasmussen and Den Uyl state that they “seek to advance a neo-Aristotelian account of human flourishing”.

My views on human flourishing have been strongly influenced by Rasmussen and Den Uyl, as well as Aristotle. The following passage is from my book, Freedom, Progress, and Human Flourishing:

“Wise and well-informed self-direction is integral to the process of human flourishing. The nature of humans is such that when individuals mature, they normally have potential to exercise the practical wisdom and integrity required to direct their own flourishing in accordance with goals they choose and values they endorse. Individuals cannot fully flourish if they are unable to exercise their potential for self-direction.”

The views presented in that passage were inspired by my reading of Aristotle.    

Is Alexander Hamilton's ideal of a modern commercial republic still relevant today?

 

Alexander Hamilton was one of the Founding Fathers of the United States. He served as secretary to the Treasury from 1789 to 1795 during the presidency of George Washington.

I knew little about Alexander Hamilton’s contribution to American economic policy before reading Samuel Gregg’s book, The Next American Economy: Nation, State, and Markets in an Uncertain World, 2022. Gregg suggests that America faces a choice between a form of state capitalism – top-down interventionism focused on achieving political objectives such as greater economic security for specific groups and “national security” – and a free market economy. He argues that in making the case for free markets it is helpful to take another look at the ideal of a modern commercial republic as espoused by Alexander Hamilton.

Centralization of powers

Prior to reading Gregg’s book, I knew that Hamilton had argued successfully for greater centralization of government powers than prevailed in the original confederation. On that basis, I had entertained the idea that he might possibly have been responsible for much that is wrong with the U.S. today.

Gregg presents a more positive view of Hamilton’s contribution. He suggests that integration of the states into a more unified commercial republic made it easier for Hamilton to apply principles of free trade among the states and between the U.S. and other countries.

Gregg’s line of reasoning poses a challenge both to libertarian globalists, who see national governments as the source of barriers to the functioning of free markets, and to economic nationalists who want governments to prevent foreign economic competition because they see it as a threat to national sovereignty. He challenges libertarian globalists by suggesting that “failure by the government to smooth the economic ups and downs which are part of life in a market economy risks opening the door to political movements that have no particular regard for human freedom”. He challenges economic nationalists by suggesting that tariffs and other measures that protect of American industry from foreign competition are harmful to Americans.

 It isn’t necessary for libertarian globalists, like myself, to abandon utopian thinking in order to see merit in effective unilateral action by national governments to promote free trade. At a national level, the case for free trade rests on it providing individual citizens and their descendants with the prospect of better opportunities than would otherwise be available to them.

To eliminate the excesses of statism, it is necessary for political leaders to exercise statecraft (or what Adam Smith and David Hume referred to as “the science of the legislator”). As Gregg puts it Smith and Hume recognized that:

 “the knowledge furnished by … integration of moral, political, and economic inquiry needed to be brought to bear upon society by statesmen and governments in the interests of its improvement”.

Gregg notes that although Edmund Burke’s involvement in economic policy was “attuned to political realities” he leaned strongly towards promoting greater commercial freedom within Britain’s empire and between Britain and other nations.

America’s Founding Fathers, including Alexander Hamilton, were also influenced by Adam Smith and David Hume.

Hamilton’s vision of a commercial republic

Samuel Gregg explains how Hamilton advanced his vision of a commercial republic in his contributions to the Federalist Papers and in his role as secretary to the Treasury. Hamilton’s vision of a modern civilized nation combined republican government and a private enterprise economy, with merchants subject to the discipline of competitive markets. He hints that character traits that make for commercial success – industry, innovation, economy, self-restraint, honesty, prudence – are also republican virtues.

Hamilton argued for free trade between the states and for revenue tariffs only on international trade. He suggested that tariffs “force industry out of its more natural channels into others in which it flows with less advantage”. He maintained that trade policy should be driven by national interest and was adamantly opposed to use of trade sanctions as an instrument of foreign policy.

What next?

Samuel Gregg ends his book by acknowledging that he doesn’t know whether there is a real possibility that an American commercial republic could emerge to shape America’s future. He hopes that it could on the basis that he can “see no reason why America cannot embrace the habits, incentives, and disciplines associated with markets while also grounding them in the language, norms, and virtues of the American experiment”.

Since 2022, when Gregg’s book was published, it has become clearer that the U.S. is likely to continue, for a few more years at least, down the path towards greater international trade protectionism.  The choice that the two major political parties are offering voters in the 2024 presidential election certainly does not include a candidate offering an alternative to higher trade barriers.

Unfortunately, the adverse impacts of increased trade protectionism in the U.S. cannot be guaranteed to result in a strong impetus for policy reversal. The U.S. economy is sufficiently large and diverse that increased barriers to international trade are likely to have relatively minor adverse impacts by comparison with those that would occur in most other countries if they followed similar policies.

It looks to me as though trade liberalisation is unlikely to occur in the U.S. until influential politicians come to see merit, from a foreign policy perspective, in supporting multilateral efforts to encourage trade among countries that have more than minimal regard for free market principles.

Meanwhile, Samuel Gregg’s book will hopefully be widely read in other countries where some current political leaders may be more receptive to Alexander Hamilton’s vision of a commercial republic based on free market principles.

Conclusion

Samuel Gregg’s book, The Next American Economy, urges Americans to adopt the ideal of a modern commercial republic, as originally espoused by Alexander Hamilton. Hamilton argued for the U.S. to adopt, unilaterally, the principle of free international trade on the grounds that this would serve the economic interests of Americans and promote republican virtues.

Unfortunately, American political leaders do not currently seem to be in the mood to re-endorse Hamilton’s vision of a modern commercial republic.

Hopefully, Gregg’s book will be widely read in other countries where some political leaders may be receptive to messages about the contemporary relevance of the role that free market polices played at an early stage in the economic and social development of the United States.

Addendum

A year has passed since I suggested: "The U.S. economy is sufficiently large and diverse that increased barriers to international trade are likely to have relatively minor adverse impacts ...". A year ago, I had no idea that the 2nd Trump administration would generate so much uncertainty about future tariff levels, or that it would raise tariffs to such an extent that it might start a trade war. 

I expect that the tariffs imposed by the 2nd Trump administration will have substantial adverse impacts on the U.S. economy, particularly during the next couple of years while the economy is adjusting to these new price distortions. The price increases resulting from the tariffs is likely to generate expectations of higher inflation that the Fed will presumably try to contain via tighter monetary policy. That would be likely to result in a recession even without taking account of the impact of foreign retaliation on U.S. exports. 

It now does seem possible that the Trump tariffs might have a sufficiently large adverse impact on the U.S. economy to generate political pressure for some kind of policy reversal.

Why should peacefulness be viewed as a characteristic of a good society?

 

In the most popular post on my blog, written in 2009, I asked: What are the characteristics of a good society? I began the post by suggesting that a good society would have good institutions – norms and laws that are good for its members. I noted that in thinking about the characteristics of a good society different people tend to emphasise different things that they consider to be important e.g. egalitarianism, personal freedom, moral values and spirituality. I then suggested that rather than just agreeing to differ, it might be useful to try to identify some characteristics of a good society that nearly everyone would agree to be important. 

The three characteristics I identified were: 

• institutions that enable members to live together in peace; 
• institutions that provide members with opportunities to flourish – to have more of the things that are good for humans to have; 
• and institutions that provide members with a degree of security against potential threats to individual flourishing.

No-one has suggested to me that they disagree that good societies should have those three characteristics.

However, I have been wondering recently how I should respond if someone suggested that in some societies a substantial proportion of the population hold attitudes that place a relatively low priority on living together peacefully. For example, while they may play lip service to peacefulness, people in some societies may not consider that it is important for children to learn to have tolerance and respect for others.  The chart shown above suggests that the importance placed on that particular child quality does indeed vary substantially throughout the world.

On reflection, I have decided that my view that peacefulness is a characteristic of a good society does not actually depend on the degree of support for that view in any society.

Why is peacefulness important?

It is appropriate to begin with the proposition that a good society would have good institutions – norms and laws that are good for its members. What that means is that a good society has institutions that support the flourishing of its individual members.

In my book, Freedom, Progress, and Human Flourishing, I identified several basic goods that a flourishing person could be expected to have:

• Wise and well-informed self-direction
• Health and longevity
• Positive relationships
• Living in harmony with nature
• Psychological well-being.

The merits of that list is a matter for ongoing reflection and discussion but I think it is helpful in considering what characteristics a society needs to have if it is to support the flourishing of individual members.

The contributions of peacefulness are fairly obvious. Peaceful societies protect the rights of individuals to self-direct, provided they do not interfere with the rights of others. They contribute to health and longevity my minimizing violence. They provide a context in which people can develop trusting relationships with others.

There isn’t any explicit discussion of the concept of a good society in Freedom, Progress, and Human Flourishing but the extensive discussion of progress in that book is highly relevant. Progress is defined in the book as growth of opportunities for human flourishing. On that basis, the good societies are those in which a great deal of progress has occurred in the past. Progress can be ongoing because there is always scope for good societies to become better.

Importance of consensus about the desirability of peacefulness    

Widespread agreement about the importance of peacefulness to human flourishing provides important support for institutions that enable the peaceful resolution of disputes among people with different political objectives. A society has little hope of becoming good, or remaining good, when an increasing number of people become willing to resort to violence to impose their visions of a good society on others.

Why am I still blogging?

 

I began blogging about 16 years ago, when blogging was somewhat fashionable. At that time, many blogs were like public diaries in which people discussed daily events in their lives. I have the impression that blogs of that kind have become less common, presumably because of competition from social media such as Facebook.

I can’t recall ever having used this blog to discuss daily events in my life and have rarely used it to discuss hot political issues. At the outset, I decided that I didn’t want the blog to be about me. And I thought it would be wise to focus on longer term issues, rather than to be unduly distracted by the day-to-day antics of politicians.

One of the distinctive characteristics of the blog is that the title of each article is a question. That seemed to me to be a good way to stay on topic in exploring relationships between freedom and flourishing. (I have previously discussed the question format here.)  

My reasons for blogging are still much the same as they were when I began. In a post in 2011, entitled "What is my purpose in blogging?”, I wrote:

“When people have asked me this question in the past my answer has been that I am interested in issues related to liberty and happiness. I read a lot of material related to those issues; I write about the things I read because that helps to focus my mind; and I publish what I write on my blog because my views might be of interest to some other people.”

My blog has evolved in various ways that have helped sustain my enthusiasm for blogging.

Evolution of the blog

When I began blogging, my main objective was to understand the links between freedom and life satisfaction that were evident in survey data. Surveys show that people who say they have a lot of freedom also tend to say they have high life satisfaction.

My objectives have become more focused as I have come to understand more about the importance of self-direction to the flourishing of individual humans. These days I am particularly interested in exploring the implications of the idea that progress should be viewed as growth of opportunities for individuals to flourish.  

From the outset, most of my blog posts have been prompted by articles and books I have read. I sometimes review a whole book, but more often select some ideas in it that I want to explore. A fairly recent example of this approach is my review of The Individualists, by Matt Zwolinski and John Tomasi. My review focuses on the question: Where is the soul of libertarianism?  (I use that essay as an example because I think it deserves more attention than it has received thus far.)

In my early years of blogging, I conducted a substantial amount of quantitative research using survey data on life satisfaction and personal freedom, along with more objective measures of economic and personal freedom. I still retain some interest in quantitative analysis, and am proud of a series of posts last year (summarized here) on the question: Can cultural values explain authoritarianism?

When I began blogging, I posted about once a week. These days I tend to post about once every couple of weeks. When I began blogging, I tried to keep posts as short as possible. More recently, my posts have tended to be longer, but I frequently use sub-headings and conclusions to help readers follow the line of argument.

Benefits of blogging

The benefits I obtain from blogging don’t include wealth or fame. If either wealth or fame was my motivation for blogging, I would have given up many years ago.

The main benefit I obtain from blogging is the satisfaction of learning about a topic by writing about it. There is also some satisfaction in knowing that what I am writing is attracting some attention.

I don’t know how many people actually read the essays on my blog, but there have been 1,197,600 views in total since I started the blog. There were 24,768 views last month.

My most popular post is entitled: What are the characteristics of a good society? That post has had 56,600 views.

One of the important benefits I have obtained from blogging is to establish contact with like-minded people in other parts of the world who share my interest in liberty and ancient philosophy.

Blogging has also helped me to develop my views sufficiently to be able to write a couple of books. I wrote and published Free to Flourish on Kindle in 2012. Freedom, Progress and Human Flourishing was published, by Hamilton Books, in 2021. I consider that writing the latter book has been one of the most significant achievements of my life.

Conclusion

To sum up, I am still blogging because blogging gives me a lot of satisfaction. Blogging has helped me to deepen my understanding of the importance of self-direction to human flourishing. Blogging has enabled me to establish contact with like-minded people who share some of my interests. Blogging also helped me to write Freedom, Progress, and Human Flourishing, which I view as one of my most significant achievements.

Is ecological justice also a mirage?

 

David Schmidtz advocates “ecological justice” in his book, Living Together: Inventing Moral Science. Although Schmidtz does not refer to Friedrich Hayek in this book, his general line of argument is similar, in many respects, to that developed by Hayek in Law, Legislation, and Liberty. From Schmidtz’s earlier writings, it clear that he is well aware of Hayek’s views.

I presume Schmidtz has good reasons for not comparing his views to those of Hayek in this book. However, since Hayek argued that ‘social justice’ is a mirage, I thought Hayek would not object to me asking whether ecological justice could also be a mirage.

In this essay, I provide a brief summary of Hayek’s reasons for viewing social justice as a mirage before considering the basis for Schmidtz’s concept of ecological justice.

Why did Hayek view social justice as a mirage?

Hayek argued that it is “a dishonest insinuation” and “intellectually disreputable” to make reference to social justice in an attempt to bolster an argument “that one ought to agree to a demand of some special interest which can give no reason for it”. Hayek implies that where there are good reasons for assistance to the less fortunate, reference to social justice adds nothing to the argument. (LLL, V2, p 97. See also p 87 for Hayek’s discussion of reasons to support “protection against severe deprivation”.)

Hayek also argued that “a society of free individuals” … “lacks the fundamental precondition for the application of the concept of justice to the manner in which material benefits are shared among its members, namely that this is determined by a human will – or that the determination of rewards by human will could produce a viable market order”. (LLL, V2, pp 96-7)

Elsewhere, Hayek made the point that the size of the national cake and its distribution are not separable issues:

“We must face the truth that it is not the magnitude of a given aggregate product which allows us to decide what to do with it, but rather the other way around: that a process which tells us how to reward the several contributions to this product is also the indispensable source of information for the individuals, telling them where they can make the aggregate product as large as possible” (Conference paper published in Nishiyama and Leube, “The Essence of Hayek”, p 323).

Hayek went on to make the point that John Stuart Mill’s claim that “once the product is there, mankind, individually or collectively, can do with it whatever it pleases” is really “an incredible stupidity, showing a complete unawareness of the crucial guide function of prices”.

Interestingly, David Schmidtz suggests that by pulling production and distribution apart, J. S. Mill “unwittingly pulled one question into two half questions that in fractured isolation had no proper answers and that would derail rather than facilitate our study of the human condition”. (p 6) Following Mill, questions about production were allocated to economists, while questions of distribution were the province of philosophers: “those who work on justice”. (p 5)

What is ecological about justice?  

David Schmidtz writes:

“We are social and political animals, and justice is a human adaptation to an ecological niche.” (p 220)

What does that mean? The common human characteristic of negotiating what we expect from each other is one of the reasons why humans are viewed as social and political animals. As people negotiate what to expect from each other, they create social niches in which they hope to flourish. (p 25) Schmidtz suggests that to speak of justice is to speak of what we should be able to expect from each other. (p 219)

Justice manages traffic. (p 220) People share an interest in avoiding collision, but otherwise have destinations of their own:

“The truth for political animals is that since we began to settle in large communities, being of one mind has not been an option. Being on the same page is not an option. Even our diverse ideas about how to resolve conflict are a source of conflict. And, disturbing though it may be for a theorist to admit it, theories do not help. It is a political fact that we live among people who have theories of their own, who do not find each other’s theories compelling, and who are perfectly aware that there is no reason why they should.” (p 221)

Schmidtz discusses several other features of ecological justice. For example, norms of ecological justice are an adaptive response to reality. Principles of justice are based on an understanding of which institutional frameworks are enabling people to flourish and which are not. Justice is somewhat testable: when the world tests our ideals and finds them wanting, we need to rethink.

The author ends up suggesting that the features of ecological justice that he has discussed “do not define ecological justice, and do not exhaust it, but they indicate whether a conception of justice is more or less ecological”. (p 226)

 Instead of seeking to define ecological justice, perhaps it is more helpful to ask what is the question that ecological justice seeks to answer. The title of Schmidtz’s book suggests that the question has to do with how we can live together. In his introduction, he asks:

“What if justice evolved as a real question about what people ought to be able to expect of each other?”

Since we have reasons to believe that justice evolved in that way, perhaps the relevant question is:

What rules of just conduct should influence what people ought to be able to be able to expect of each other, allowing for the possibility that individuals might flourish in different ways?  

(That question borrows words from Friedrich Hayek, and Douglas Rasmussen and Douglas Den Uyl, as well as David Schmidtz.)

Conclusion

David Schmidtz’s concept of ecological justice is certainly not a mirage. It has to do with the nature of humans as social and political animals, and the nature of justice as a human adaptation to an ecological niche.

Rather than seeking to define ecological justice precisely, perhaps it is more helpful to ask what is the question that ecological justice seeks to answer. My suggestion is:

What rules of just conduct should influence what people ought to be able to be able to expect of each other, allowing for the possibility that individuals might flourish in different ways?