Does dialogue imply recognition of natural rights?

Two philosophers, John and Robert, were travelling in a lawless country when they were attacked by two bandits. In the initial exchange of gunfire, Robert and one of the bandits were killed. The other bandit had John in his sights, and John thought he was about to be shot.

John shouted: “Please don’t kill me. That would be a violation of my natural rights”. The bandit laughed. “I don’t believe in natural rights”, he said. “Around here, I decide who has rights, and you don’t have any.” 

The bandit moved closer, so John didn’t need to shout his response: “The government of the country I come from also takes the view that there are no natural rights. It claims that it has the authority to decide who has rights and what rights they have. It is wrong and so are you”.

The bandit asked John to explain what was wrong with claiming that rights are determined by the people with power. John replied: “By engaging in dialogue with me about rights, you are implicitly recognizing my natural right to self-direction. If I didn’t have that right, I would not have been able to consider your argument and to reject it”. 

The bandit laughed again, before asking: “Where did you get that idea from?”. John explained that the idea had come from Hans-Hermann Hoppe.^[i]

While John was explaining Hoppe’s idea, the bandit became distracted by a wasp hovering around his face. John took advantage of the situation to pull out a small handgun that he had concealed in his clothing and to point it at the bandit.

With the tables now turned, John said: “Give me good reasons why I shouldn’t shoot you”. The bandit pleaded that he didn’t deserve to be killed because that would be disproportionate punishment. He explained that he was not responsible for killing Robert and said that he didn’t intend to kill John.

John responded: “In the defence that you have just presented, you have claimed the right not to be subjected to disproportionate punishment. That means you have contradicted your earlier statement that you do not believe in natural rights. Have you changed your mind? Do you now believe in natural rights?” 

The bandit claimed that he did now believe in natural rights. John was not sure that he was being truthful, but had already decided to spare his life. John decided that, under the circumstances, it would be enough punishment to lecture the bandit at length about the principle of estoppel, that Stephan Kinsella has applied to natural rights dialogue.^[ii]

A couple of days later, John was discussing the incident with Peter, another philosopher friend, whom he knew had often claimed to be a natural rights skeptic. After John had related his story, he added the thought: “I am now having regrets that I didn’t shoot that bandit when I had the chance”. Peter responded: “No, you did the right thing! Killing him would have been disproportionate punishment”.

John saw an opportunity to make an important point: “Peter, do you realize that by acknowledging that there is such a thing as disproportionate punishment you have implicitly recognised the existence of natural rights?” John then gave Peter a reference to Stephan Kinsella’s discussion of rights scepticism.^[iii] 

I leave it for you, dear reader, to decide how this story might end. I would like to think that the bandit and Peter have both now stopped claiming that they don’t believe in natural rights.

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[i] Hoppe, Hans-Hermann, 1989, A Theory of Socialism and Capitalism: Economics, Politics, and Ethics.

[ii] Kinsella, Stephan, 2019, ‘Dialogical Arguments for Libertarian Rights’, The Dialectics of Liberty: Exploring the context of human freedom, edited by Roger Bissell, Chris Matthew Sciabarra and Edward W Younkins, loc 1852-1886/8713.

[iii] Kinsella, op.cit. loc 1886-1921/8713.

Is cultural change responsible for a long term decline in productivity growth?

The story of cultural change that Edmund Phelps tells in Mass Flourishing has a happy beginning and a sad ending.

Phelps’ cultural story of the advent of rapid economic growth in Britain and America in the 19^th century is much like that of Joel Mokyr and Deidre McCloskey (discussed here and here). The main difference is Phelps’ greater emphasis on grassroots innovation within firms.

Phelps makes a strong case that Joseph Schumpeter, famous for his theory of entrepreneurship, over-emphasized the importance of exogenous scientific discoveries (external to innovating firms) as a source of innovation. Phelps probably goes too far in downplaying scientific advances, but his story about the importance of grassroots innovation to the emerging modern economies seems highly plausible. He suggests:

“a modern economy turns people who are close to the economy, where they are apt to be struck by new commercial ideas, into the investigators and experimenters who manage the innovation process from development and, in many cases, adoption as well” (p 26).

Phelps describes a modern economy as “a vast imaginarium – a space for imagining new products and methods, imagining how they might be made, imagining how they might be used” (p 27).

A substantial part of the book is devoted to a discussion of socialism, as practiced in the Soviet Union, and corporatism, as practiced in Italy and Germany in the 1930s. The contemporary relevance of that discussion become relevant later in the book in his discussion of reasons for the decline in productivity growth that seems to have occurred in the U.S. since the 1960s.

Phelps’ focus on the U.S. economy as the main driver of technological progress seems appropriate. He notes that European countries experienced high productivity growth while playing the technological catch-up game, but their productivity growth has generally been lower than in the U.S. in recent decades. He attributes their lack of dynamism to ongoing corporatism over the decades since World War II. The classical corporatist model - involving state direction of industry and promotion of solidarity and social responsibility – has been augmented with codetermination of labour and capital (instead of owner-control) and stakeholderism (instead of a focus on income generation).

The author suggests that corporatism has also grown in the United States. Industries that have been subject to government policy interventions have been affected by a new populist type of corporatism as businesses have sought to use their political influence to mould government regulation to their advantage. The result is a “densely interconnected system of mutually beneficial relationships between private and public’, which tends “to redirect the economy’s innovation toward politicians”. He notes that supporters refer to that system as industry policy and detractors refer to it as corporate welfare. It should be referred to as rent-seeking.

The cultural change that Phelps sees as leading to a decline in economic dynamism is not fully reflected in changes in economic freedom indexes. He sees a deterioration in the “core functioning” of modern economies. This involves, among other things:

• Managerialism, short-termism and the rise of a “money culture” in business, with wealth-seeking turning people away from innovation.
• A rise in the litigiousness of American society - people who devote their time and energy to suing one another have less time and energy for innovation.
• Excessive patent protection resulting in an economy clogged with patents – “a creator of a new method might require as many lawyers as engineers to proceed”.
• More people aspiring to attain social station rather than to achieve something.
• Adolescent culture – less willingness to accept temporary austerity in the quest for achievement; less ability to concentrate intensely (unable to resist distractions of social media).
• A resurgence of traditional values putting more pressure on business to allow people to work from home etc.

Has this cultural change in U.S. business caused a decline in the long-term productivity growth rate? If so, what can be done about it?

In a series of posts written in 2015, I was sceptical that there had been a decline in long term productivity growth. I suggested that the slow-down in measured productivity growth in the U.S. and some other countries may be attributable, in part, to difficulty in measuring the outputs of the information and communications technologies (ICT) industries. I also noted research findings suggesting a technological diffusion problem, rather than a slow-down in technological advances, with productivity growth of global frontier firms remaining relatively robust.

The addition of a few more years of data seems to lend support to the view of the historical pessimists that there has been a long-term decline in U.S. productivity growth. And Phelps’s cultural change explanation does seem plausible.

Unfortunately, the remedies that Phelps offers are less plausible. He suggests that governments can act to restore dynamism if they become aware of its importance and gain some practical knowledge of how innovation is generated. He suggests:

“Nations will have to push back against the resurgence of traditional values that have been suffocating in recent decades and revive the modern values that stirred people to go boldly forth toward lives of richness”.

Edmund Phelps seems to be hoping that a reinvented corporatism, perhaps inspired by the starship Enterprise, will foster grassroots innovation and be less prone to rent-seeking than the industry policies it replaces. Good luck with that!

I prefer to put my faith in the potential for new technologies to disrupt and subvert populist corporatism.