One would be hard-pressed to find two thinkers as distinct as Jane Jacobs and Jaron Lanier. Jacobs, who passed away in 2006, was a thinker concerned with the concrete reality of real-world communities, and most especially, how to preserve them. Lanier is a pioneer in the field of virtual reality, having coined the phrase, with deep ties to the culture of Silicon Valley. This is why I found it so surprising upon reading relatively recent books from both of these authors that they provided an almost synergistic perspective in which each author appeared to inform the work of the other resulting in a more comprehensive whole.
I’ll start with Jane Jacob’s. The purpose of her last and by far most pessimistic book Dark Age Ahead, published in 2004, was to identify what she saw as some major dystopian trends in the West that if not checked might result in the appearance of a new dark age. Jacob’s gives what is perhaps one of the best descriptions of what a dark age is that I have ever seen; A state of “mass amnesia” in which not only have certain aspects of a culture been lost, but the fact that these aspects have been lost is forgotten as well.
In Dark Age Ahead, Jacobs identifies five dystopian trends which she thinks are leading us down the path of a new dark age: the decline of communities and the family, the decline of higher education, the decline of science, the failure of government, and the decay of culture. One of the things that make Jacobs so interesting is that she defies ideological stereotypes. Looking at the world from a perspective of the community allows her to cast her net much wider in the search for explanations than what emerges from “think tanks” of both the right and the left. Want a reason for the decline of the family? How about consumerism, the need for two incomes, and the automobile, rather than the right’s claim of declining moral standards. Want a reason for the failure of government?
What about the loss of taxing authority by local governments to the national government, and the innate inability of national bureaucracies to craft effective policies based on local conditions, rather than, as some on the left would have it, the need for a more expansive federal government.
Jacob’s unique perspective gained her prescience. Over three years before the housing bubble burst and felled the US economy she was able to see the train wreck coming. (DA P.32). This perspective grows out of her disdain for ideology, which is one of her main targets in Dark Age Ahead. Something like ideology can be seen in what Jacobs understands to be the decline of science. Openness to feedback from the real- world is the cornerstone of true science, but, in what Jacob’s sees as a far too often occurrence scientists, especially social scientists, ignore such feedback because it fails to conform to the reigning paradigm. Another danger is when fields of knowledge without an empirical base at all successfully pass themselves off as “science”.
But where the negative effect of ideology is most apparent is at the level of national government where the “prefabricated answers” ideology provides become one-size-fits-all “solutions” that are likely to fail, firstly, because profound local differences are ignored, and secondly, because national imperatives and policies emerge from bureaucratic or corporate interests that promote or mandate solutions to broad problems that end up embedding their own ideology and agenda, rather than actually addressing the problem at hand.
Sometimes we are not even aware that policies from distant interests are being thrusts upon us. Often what are in fact politically crafted policies reflecting some interest have the appearance of having arisen organically as the product of consumer choice. Jacobs illustrates this by showing how the automobile centric culture of the US was largely the creation of the automobile industry, which pushed for the deconstruction of much of the public transportation system American cities. Of course, the federal government played a huge role in the expansion of the automobile as well, but it did not do so in order to address the question of what would be the best transportation system to adopt, but as a means of fostering national security, and less well known, to promote the end of national full-employment, largely blind to whatever negative consequences might emerge from such a policy.
Jacobs ideas regarding feedback- whether as the basis of real science, or as the foundation of effective government policies- have some echoes, I think, of the conservative economist Friedrich Hayek. Both Hayek and Jacobs favored feedback systems such as the market, in Hayek’s case, or, for Jacobs the community (which includes the economy but is also broader) over the theories of and policies crafted by and imposed by distant experts.
A major distinction, I think, is that whereas Jacob looked to provide boundaries to effective systems of feedback- her home city of Toronto was one such feedback system rather than the economy of all of Canada, North America, or the world- Hayek, emerging from the philosophy of classical liberalism focused his attention sharply on economics, rather than broadening his view to include things such as the education system, institutions of culture and the arts, or local customs. Jacob saw many markets limited in geographic scope, Hayek saw the MARKET a system potentially global in scale, that is given the adoption of free- trade, would constitute a real, as opposed to a politically distorted, feedback system which could cover the whole earth. Jacobs is also much more attuned to areas that appear on the surface to be driven by market mechanisms- such the idea that consumer choice led to the widespread adoption of the automobile in the US- that on closer inspection are shown to be driven by influence upon or decisions taken by national economic and political elites.
Anyone deeply familiar with either Hayek or Jacobs who could help me clarify my thoughts here would be greatly appreciated, but now back to Lanier.
Just as Jacobs sees a naturally emergent complexity to human environments such as cities, a complexity that makes any de-contextualized form of social engineering likely to end in failure, Lanier, in his 2009 manifesto, You Are Not A Gadget, applies an almost identical idea to the human person, and challenges the idea that any kind of engineered “human-like” artificial intelligence will manage to make machines like people. Instead, Lanier claims, by trying to make machines like people we will make people more like machines.
Lanier is not claiming that there is a sort of “ghost in the machine” that makes human beings distinct. His argument is instead evolutionary:
I believe humans are the result of billions of years of implicit, evolutionary study in the school of hard knocks. The cybernetic structure of a person has been refined by a very large, very long, and very deep encounter with physical reality.( 157)
Both human communities and individuals, these authors seem to be suggesting, are the products of a deep and largely non-replicable processes. Imagine what it would truly mean to replicate, as software, the city of Rome. It is easy enough to imagine that we could reproduce within amazing levels of detail the architecture and landscape of the city, but how on earth would we replicate the all the genealogical legacies that go into a city: its history, culture, language- not to mention the individuals who are the carriers of such legacies?The layers that have gone into making Rome what it is stretch deep back into human, biological, and physical time: beginning with the Big Bang, the formation of the Milky Way, our sun, the earth, life on earth from the eons up until human history, prehistoric settlements, the story of the Roman Republic and Empire, the Catholic Church, Renaissance city states, national unification, Mussolini’s fascist dictatorship down to our own day. Or, to quote Lanier: “What makes something fully real is that it is impossible to represent it to completion”. (134)
Lanier thinks the fact that everything is represented in bits has lead to the confusion that everything is bits. The result of this type of idolatry is for representation and reality to begin to part company a delusion which he thinks explains the onset of the economic crisis in 2008.( It’s easy to see why he might think this when the crisis was engendered by financial frankensteins such as Credit Default Swaps which displaced traditional mortgages where the borrowers credit was a reality lenders were forced to confront when granting a loan.)
Lanier also thinks it is far beyond our current capacity to replicate human intelligence in the form of software, and when it appears we have actually done so, what we have in fact achieved is a massive reduction in complexity which has likely stripped away the most human aspects of whatever quality or activity we are trying to replicate in machines. Take the case of chess where the psychological aspects of the game are stripped away to create chess playing machines and the game is reduced to the movement of pieces around a board. Of course, even in this case, it really isn’t the chess playing machine that has won but the human engineers and programmers behind it who have figured out how to make and program such a machine. Lanier doesn’t even think it is necessary to locate a human activity on a machine for that activity to be stripped of its human elements. He again uses the case of chess only this time chess played against a grandmaster not by a machine but by a crowd wherein individual choices are averaged out to choose the move of the crowd “player”. He wants us to ask whether the human layer of chess, the history of the players their psychological understanding of their opponent is still in evidence in the game-play of this “hive- mind”. He thinks not.
Like Jacobs and her example of the origins of the US transportation system in the machinations of the automotive industry and the influence of the American government to promote an economy built around the automobile for reasons that had nothing to do with transportation as such- namely national security and the desire for full-employment, Lanier sees the current state of computer technology and software as not a determined outcome, but as a conscious choice that has been imposed upon the broader society by technologist. What he sees as dangerous here is that any software architecture is built upon a certain number of assumptions that amount to a philosophy, something he calls “digital-lock-in”.That philosophy then becomes the technological world in which we live without ever having had any broader discussion in society around the question of if this is truly what we want.
Examples of such assumptions are the non-value of privacy, and the idea that everything is a vehicle for advertising. Lanier thinks the current treatment of content producers as providers of a shell for advertisement are driving artists to the wall. Fact is, we all eventually become stuck with these models once they become universal. We all end up using FaceBook and Google because we have to if we want to participate in the online world. But we should realize that the assumptions of these architectures was a choice, and did not have to be this way.
It is my hope that, in terms of the Internet, the market and innovation will likely provide solutions to these problems even the problem of how artist and writers are to find a viable means of living in conditions of ubiquitous copyable content. But the market is far from perfect, and as Jacob’s example of the development of the US transportation system shows, are far too often distorted by political manipulation.
A great example of this is both the monopolization of the world’s agriculture by a handful of mammoth agribusinesses, a phenomenon detailed by Giulio Caperchi, of the blog The Geneaology of Consent. In his post , Food Sovereignty, Caperchi details how both the world food system is dominated by a small number of global firms and international organizations. He also introduces the novel concept of epistemological sovereignty “the right to define what systems of knowledge are best suited for particular contexts”. These are ideas that are desperately needed, for if Lanier is right, we are about to embark on an even more dangerous experiment by applying the assumptions of computer science to the natural world, and he cites an article by one of the patriarchs of 20th century physics- Freeman Dyson- to show us that this is so.
There must be something with me and Freeman Dyson, for this is the second time in a short period that I have run into the musings of the man, first in doing research for a post I wrote on the science-fiction novel Accelerando, and now here. In Our Biotech Future Dyson lays out what he thinks will be the future of not just the biotech industry and biological sciences but the future of life itself.
Citing an article by Carl Woese on “the golden age” of life before species had evolved and gene transfer between organisms was essentially unbounded and occurred rapidly. Dyson writes:
But then, one evil day, a cell resembling a primitive bacterium happened to find itself one jump ahead of its neighbors in efficiency. That cell, anticipating Bill Gates by three billion years, separated itself from the community and refused to share. Its offspring became the first species of bacteria and the first species of any kind reserving their intellectual property for their own private use.
And now, as Homo sapiens domesticates the new biotechnology, we are reviving the ancient pre-Darwinian practice of horizontal gene transfer, moving genes easily from microbes to plants and animals, blurring the boundaries between species. We are moving rapidly into the post-Darwinian era, when species other than our own will no longer exist, and the rules of Open Source sharing will be extended from the exchange of software to the exchange of genes. Then the evolution of life will once again be communal, as it was in the good old days before separate species and intellectual property were invented.
Dyson looks forward to an age when:
Domesticated biotechnology, once it gets into the hands of housewives and children, will give us an explosion of diversity of new living creatures, rather than the monoculture crops that the big corporations prefer. New lineages will proliferate to replace those that monoculture farming and deforestation have destroyed. Designing genomes will be a personal thing, a new art form as creative as painting or sculpture.
Dyson, like Lanier and Jacobs praises complexity: he thinks swapping genes is akin to cultural evolution which is more complex than biological evolution ,and that the new biological science, unlike much of the physical sciences, will need to reflect this complexity. What he misses, what both Jacobs and Lanier understand ,is that the complexity of life does not emerge just from combination, but from memory, which acts as a constraint and limits choices. Rome is Rome, a person is a person, a species is a species because choices were made which have closed off alternatives.
Dyson is also looking at life through the eyes of the same reductionist science he thinks has reached its limits. I want to make a kitten that glows in the dark, so I insert a firefly gene etc. In doing this he is almost oblivious to the fact that in complex systems the consequences are often difficult to predict beforehand, and some could be incredibly dangerous both for natural animals and plants and the ecosystems they live in and for us human beings as well. Some of this danger will come from bio-terrorism- persons deliberately creating organisms to harm other people- and this would include any reinvigorated effort to develop such weapons on behalf of states as it would the evil intentions of any nihilistic group or individual. Still, a good deal of the danger from such a flippant attitude towards the re-engineering of life could arise more often from unintended consequences of our actions. One might counter that we have been doing this re-engineering at least since we domesticated plants and animals, and we have, though not on anything like the scale Dyson is proposing. It is also to forget that one of the unintended consequences of agriculture was to produce diseases that leap from domesticated animals to humans and resulted in the premature deaths of millions.
Applying the ideas of computer science to biology creates the assumption that life is software. This is an idea that is no doubt pregnant with discoveries that could improve the human condition, but in the end it is only an assumption- the map not the territory. Holding to it too closely results in us treating all of life as if it was our plaything, and aggressively rather than cautiously applying the paradigm until, like Jacob’s decaying cities or Lanier’s straight-jacket computer technologies, or Caperchi’s industrialized farming it becomes the reality we have trapped ourselves in without having ever had a conversation about whether we wanted to live there.
Utopia or Dystopia 
Whew! Very well written , I admit, I had to finish this in 3 separate time periods to take it in. Interesting reads discussed here of course. I agree with Jacobs’ ideas. The part of the auto industry coming to importance in the USA reminds me of my thoughts on the USA humanitarian involvement whether it be military, the UN, or “NGOs” ( placed in quotation marks because in my opinion, there is no true NGO)—what is the true agenda of the USA in such instances? Even if not purely because they want to make the world a “better place”, does this matter since it benefits the less fortunate anyways?
Lastly, the metaphor in building Rome compared to developing AI is a good one.
Thanks for the comment Frances. The post was, I admit, a little head-twisting even for me- and I wrote it. Your application of my thoughts to NGO’s is thought provoking. I think it is certainly the case that humanitarian agencies which are part of the US government- USAID for example- have an agenda that originates with the US government and is therefore not necessarily the policy you would get had it originated from the society in which the policy is being applied. This is the case with UN agencies too which, after all, represent the interests of the most powerful states who pay its dues.
Where I would exercise caution is with agencies that are somewhat independent. A good friend of mine works for Médecins Sans Frontières
her blog can be found here: http://courtneywhite77.com/
and they do amazing work and have saved countless human lives- always a good thing. But even government and UN agencies have done good which we should not forget.
For me, the key is to given local people control over what they do rather than pushing upon them some fiat policy conceived in Washington, or New York, or Brussels. To use Dyson’s analogy we should move to an open-source model of development where we provide the technical knowledge of how to do stuff, which we excel at, and leave the issue of WHAT is to be done to the locals.
Thanks for making me think.
Hi Rick,
First of all, thank you very much for citing my work in this fantastic article. It is greatly appreciated.
If I may, I’d like to enlarge on the paragraph regarding feedback mechanisms in Hayek, as a way to agree and reinforce your article’s main point.
One of the key assumptions running through classical liberalism and neo-liberal theory (from Adam Smith, through Hayek, up to Milton Friedman) is that the market is the only place where true, spontaneous and un-biased information may be witnessed and analysed. The market, for these economists, is a site where individuals freely interact (“trade, truck and barter” as Adam Smith said) unhindered and on a completely voluntary basis. As such it is the only place where “real” human behaviour is expressed: “reality” thus occurs in the market-place. The market is conceived as a neutral ground devoid of ideology and political influence.
This is a tremendous assumption with far-reaching consequences. And, more importantly, it is a key ideological manoeuvre. What neoliberals like to claim is that seeing that they derive their social policies from feedback accruing from the “neutral” free market, they are ideologically un-biased. They contrast themselves to “big-government central planning” and socialism which apply one-size-fits-all social policy to intrinsically diverse populations. The crucial point is, however, that basing social policy on the utopian idea of perfectly working, self-regulating and un-biased free markets is itself a sublimely ideological assumption. The neo-liberal free-market is a utopia as much as the communist classless society is. In this respect forcing societies to conform to the rules of the free-market is itself a one-size-fits-all policy.(Joseph Stiglitz is probably the most important economist which shows that markets are VERY imperfect and VERY biased).
This is not to say that one should be completely relativist and refuse the idea that there is nowhere that one may garner social feedback with which to inform policy. But the deconstruction of what experts and technicians call “reality”, “truth”, and “natural law” is always necessary to reveal the ideological bias ALWAYS present in any idea, concept or science.
I therefore totally agree with your powerfully stated conclusions, namely, that there is the need for constant discussion and deliberation on these “assumptions” which inform our private and public lives. The democratization of these assumptions is critically needed to reveal their ideological underpinnings and their nature as instruments (sometimes) of domination. That is why epistemological sovereignty (mostly at the local level of course) is a key instrument of resistance and a safeguard against the excesses of what experts (be they in Washington, in a university or on Wall Street) call “truth”.
Giulio,
To me “neoliberal” is a loaded word. One that I am not ashamed to cast about myself, particularly for “Supply Siders” and other assorted Friedmanites. I do not put myself in that camp, though as an Austrian School lay-enthusiast, I see some common ground, though not as much as I would otherwise like.
I don’t know much about what neoliberals think in terms of whether “the market is the only place where true spontaneous and un-biased information may be witnessed and analyzed.” I guess it really comes down to how you define “market”.
Markets in the purely economic sense? Or markets in the more abstract sense?
If the former, and if your claim is correct, I would say that neoliberals are quite narrow minded. If the latter, I would tend to agree with the neoliberals. If this more abstract, conceptual marketplace, essentially an (I am loathe to use the word) aggregation of human action is indeed the only place to witness spontaneous and unbiased information, it is precisely because of how broad an idea it is. This is where the Austrian School often faces the most criticism: the theory that all human action can be deduced using the same (or superficially dissimilar) axioms as purely economic action.
So basically, ALL human action, spontaneous or otherwise is seen as part and parcel of the marketplace (which could, in effect really be an infinite amount of smaller marketplaces). Given this axiom, it is impossible for human action to exist outside of the marketplace, by definition. Based on this, the market would be the only place to witness spontaneous information.
And then their is the question of bias. Bias exists in the market. Whether this is desirable or not depends entirely on the human actors themselves. This includes those acting spontaneously and those acting more deliberately. Those acting deliberately (such as the state, regulators, corporations) are able to cause undesirable bias by distorting the market. They cannot do this without committing, perpetuating, or taking advantage of some form of coercion, explicit or implicit. At which point the FREE part of the Free Market goes out the window.
Under ideal circumstances, which may not even be attainable on a large scale, biases that occur are simply a reflection of the decisions of market actors. I fail to see the problem. If there is good, good. If there is bad, the fault is in the actors, not the system.
I don’t think most libertarians believe in the perfectibility of the human condition, which to me is the defining characteristic of a utopian ideology. And certainly most would not suggest that the Free Market alone could accomplish this. Most hold that the Free Market, whether it might be considered to have inherent flaws or not, at least is the best allocator of resources and cause of economic growth. But the main reason some prefer the Free Market has little to do with how effective it is in these areas, but instead the fact that it is the most consistent with what are seen as natural rights. Some, myself included, would still advocate the Free Market even if it was not the “best” system for allocating resources and spurring growth. It is not the practical implications that are our chief concern. It is the ethical ones.
I agree that Markets are not, as you say, “perfectly working, self-regulating and unbiased”. I do hold, however that Markets are the best of all possibilities, but this is not perfection. That markets self-regulate to a point, which happens to be the same point at which the word FREE goes out the window. That bias is not undesirable, per se.
I am sure that you and I agree more than we would disagree on many an issue, this one included. It is not my intent to argue, though I would happy to engage in discussion. I am only here to express another point of view for the benefit of this blog’s readers and to, in someone else’s words, engage in a civil exchange of ideas between bloggers.
Henry, a non-utopian advocate for the Free Market
Hi Henry,
Thank you for your wonderful and very articulate response. You are indeed right, we do agree on many respects.
Essentially, what I am arguing for, and the chief reason I criticise utopian strands of free-market ideology, is for the separation of the the political sphere from the economic, and the refusal of subsuming politics and the public sphere to economic imperatives.
I do not agree with the fundamental neoliberal axiom that all human action may be explained in terms of rational individuals freely pursuing their interests. Coming from a more communitarian perspective (think Michael Sandel for example), there are certain types of behaviour that cannot be rationalized through market motivations. Patriotism and sacrifice, for example, elude the idea of rational interest-motivated behaviour. The virtues informing classical citizenship, also, are not informed by market behaviour but by respect and allegiance to the public sphere and to the common good of the “demos”.
More importantly, something like the social contract and the erection of democratic a order are not a spontaneous acts arising from the state of nature (as some neoliberals and libertarians have it -think Nozick), but a conscious political effort of collective human agency.
On the question of bias, we thoroughly agree: very few believe in the infallibility of human behaviour and that there will always be bias/asymmetries/coercion in our societies. I also agree that it is not inherently the fault of the free market. However, I do think that a society informed by the rationale of laissez fair is more inclined to exacerbate such power imbalances that we naturally find in the human condition.
Finally, I am not arguing against the free market per se. But I am arguing that in CERTAIN domains the free market is NOT best suited to allocate resources or inform behaviour. For example (and here comes my European bias) healthcare, basic public transportation, the military, certain infrastructure, water provision, education, and the right to food are services and issues so essential to the unity and stability of the modern nation state that they cannot be exposed to the imbalances/biases/asymmetries inherent in the free market. In addition, I do not think that the free market is always most consistent with regimes ensuring natural rights. The ethical implications of natural rights, for me, do not arise spontaneously from a system of free-markets but from a united and concerted discussion within democracies on which ethical paradigm(s) best applies to particular contexts.
In conclusion, I agree with your final remarks saying that markets are not perfect but that they are better than many other catastrophic politico-economic systems witnessed throughout history. But we cannot remain blind to the economic and financial catastrophe caused by unbridled and corrupt free markets (with governments thoroughly compliant of course) unfolding before our very eyes. Yes to free markets – but constant vigilance of its inherent excesses (as in all things).
I therefore think that we must have a public discussion on WHERE markets are best suited to allocate resources and promote growth/innovation/creativity, and where they are not. While I am not a fan of government regulation (and this is my libertarian side coming out), prudential limits and legislative boundaries are essential to our stability as a nation and as a united people. Therefore, as Rick says in his post, we should have a public discussion on whether the neoliberal axiom we have discussed earlier should in fact inform societal and governmental behaviour.
Many thanks for taking the time to answer my points and engage in this fruitful discussion. Indeed this is what democratic deliberation is all about. I really do think we don’t disagree that much and that we both favour a democracy and an economic order where liberty is indeed maximised.
All the best,
-Giulio
Henry,
I had initially intended to close this discussion after yours’ and Giulio’s last comments. But after I had finished that damned Turing article, what the both of you articulated struck me with questions that I would hope you could help me understand.
[I hope to put all of this in a single coherent post at some point very soon after your response, but please feel free to answer the questions at your leisure, or if you are not interested in answering just let me know]
What I am curious about is this: I know from reading your blog that you are strongly anti-interventionist in terms of the government trying to manage the economy, and hold that many of the large-scale economic crises we have experienced were brought about by government interference in the market.
But do you think this always the case? Are markets, in your view, not so much perfect as impervious to catastrophic failure in so far as they are not subject to government distortions? Has the government no or only a minimum role in cushioning the public from such crises in your understanding?
Some further questions: Do you not hold the view that what are termed neo-liberal policies have the consequence of exacerbating sharp economic inequality? If you do believe neo-liberal policies can result in rising inequality why is this inequality not a danger to the survival of the market based society you wish to promote? At some point, it seems to me, some level of equality is necessary for the survival of the market itself. Isn’t it in a sense true that this is what natural property rights are meant to protect? Wouldn’t the right to hold property contradict itself in a society where only a tiny minority actually held property?
I promise I won’t ask for any more of your time after these questions. I think on the whole this will have made a great philosophical and political discussion.
This is the third time I have tried to respond, each time with the same basic structure and ideas.
Rick,
Every time that notification symbol turns orange, I get very excited. I am nothing if not in need of extra venues to write. Your request is no trouble at all, and in fact is very worthwhile. I will have to do it when I have time and my are thoughts collected, of course, but it is still my pleasure.
I already have knee-jerk reactions to your questions, but in the interest of not being to dogmatic, will take some time to mull over what you have said, read up on some of the more technical things, and think my thoughts through to their logical conclusions. Note too that my opinions on many things are still evolving (four years ago I was your typical neoconservative, though young enough to have an excuse and independent enough to not be sycophantic). But I am nowhere near being uncertain or confused or lost.
For now, I am content to say that I too am concerned about inequality and its effects, and that it can and does occur in the free market (or the closest thing we have resembling one), if not also being directly caused by it at times.
Hank (as my friends call me)
Hank,
Glad that you are willing to respond, and please take all the time you need to give the best response you can. Hopefully G. will do the same.
Rick
Rick,
Please understand that I approach Free Markets from a Libertarian position, rather than an Egalitarian one. That is, from a love of liberty (which is simply the result of other’s duty to not aggress), regardless of its consequences, rather than a love of equality (which has many forms, some of which seem not to be compatible with others, and some which may be incompatible with liberty). Having said that, libertarianism and egalitarianism are not mutually exclusive. In fact, there is a “leftist” school of thought that emphasizes both. The left-libertarians, particularly Market Anarchists argue, pragmatically, that markets are best because they lead to equality and social justice, that monopolies rarely come into existence, and that when they do, it really is because they are the best and most efficient at what they do, rather than because their cronies did them a favor. To them, it is regulations that truly cause monopolies, rather than protect against them.
More right-leaning anarchists and libertarians (such as myself) would tend to agree, but with the caveat that even if markets did lead to inequality they are still better because they do not violate the non-aggression axiom. However, my heart does bleed more than others I could name.
Wikipedia says, “Neoliberalism is an ideology based on the advocacy of economic liberalizations, free trade, and open markets. Neoliberalism supports privatization of state-owned enterprises, deregulation of markets, and promotion of the private sector’s role in society. In the 1980s, much of neoliberal theory was incorporated into mainstream economics.”
Looking at the first sentence, it would seem that the libertarian groups I mentioned above all fit neatly into this camp. But neoliberalism, especially as it has been incorporated into mainstream economics does not seem to have much common ground, apart from a few general principles, with the more fringe (anarchists, deontological minarchists) elements of Free Market advocates.
First, Neoliberalism tends to accept things the way they are, even while advocating for a change of hands, from the public sector to the private sector. If there is already a monopoly, regardless of how it got there, so long as it is not a public entity (on paper), all is well. That is their take on economic liberalization. Rather than lead to inequality, this enshrines inequality that already exists.
Second, free trade to a Neoliberal, is not free at all, it is managed, often heavily-managed trade and consistent with the ideas of a state-government partnership that resembles a “benign” fascism, i.e., crony capitalism, and entangling alliances. That is not to say that one form of managed trade isn’t better than another form, but to call either free trade is a mockery.
Third, the concept of an open market is not the same as that of a free market. A free market is an open market that is always subject to market forces, and in that sense they are the same. But an open market could in theory be a part of any economic system so long as none (perhaps meeting certain requirements like competency, liquidity, and/or competitiveness, perhaps not) are denied the right to enter that market as a merchant. Also, the otherwise laudable idea that all markets should be open markets leads to the more contemptible idea that “closed” markets should be forced open. This can amount to forced trade, or at the very least trade that favors one party over the other. Another variant of legal plunder.
Fourth, privatization of state-owned enterprises, may be all well and good for things such as railroads and communications and resources, but in the case of an entity that should not exist in the first place (Federal Reserve System, Federal National Mortgage Association, Federal Home Loan Mortgage Association, to name a few), privatization is just another road of economic fascism.
And finally, deregulation can mean any number of things. It can mean deregulation of certain entities or industries and not others, which is picking winners and losers. It can also mean the removal of regulations that were in place to paper over the problems caused by other regulations, or to remove the original regulations and leave the ones that only came about as a result of the original ones, when this may be a considerably worse thing to do than to just leave them all or remove them all. This sort of occurrence is fodder for the mainstream media which can then claim that deregulation is causing economic mischief and miscalculation.
So Neoliberalism, as practiced, does seem to promote inequality. Not a gradual inequality emanating from true competition and market forces, but an already present inequality solidified and then worsened in the process of so called “liberalization.”
Inequality such as this is indeed a danger. Partly because the sheer scope of it may squeeze out competition, thus harming potential competitors and consumers, and partly because it was brought about through coercion.
Some level of equality (though I am not sure how one would measure it) may be necessary to the progression of a market based system. If different players do not at least have similar chances, the one with the best chances will necessarily end up on the top. By the same token, if their chances are roughly equal, they can compete and keep the others from crowding them out. Even so, it is very hard to maintain front runner status, even with a huge head start (in terms of resources or capital), without being artificially propped up. There will always be those smaller (unequal) entities that are just able to do things more efficiently, provided the larger entity does not have some regulatory body fixing prices in its favor, which is just one example of being artificially propped up.
Can markets have serious downturns or crashes without large scale government intervention? The answer is yes. But something (the market, to me, is not a “something”, but rather the absence of “something”, it is negative, not positive) still must be the cause. Put in place of government intervention either wide-scale fraud or groupthink. I see no reason why these couldn’t cause problems. But there are several differences between these things and government intervention.
Whereas the failures of government intervention can be used to excuse even more of it, when fraud or groupthink occur, because they are not thought to have the same irreproachable nature as the state, they are more readily dealt with. A downturn caused by government just leads to more such intervention and more problems. Look at the dot-com boom and bust. The government’s and the Fed’s policies resulting from it led to our current housing boom-bust, and those same policies in reaction to that are now leading to a sovereign debt boom and soon to be bust. But con artists and highly speculative fads, because they do not have power over whole jurisdictions simply cannot create as big of problems. And because they are not quite so sacrosanct as the state, they will be discovered, understood, and dealt with, and will have no chance of using their own blunders to save or perpetuate themselves.
In the case of fraud, there should be laws protecting against it, but they should be defensive in nature rather than aggressive. They should not forbid every single action that could, in theory become fraudulent, as they would tend to weed out perfectly safe and moral economic actions. And in the case of irrational or risky manias, no law can protect against these. There are too many variables. Should the Dutch government have banned tulips or the cultivation of tulips or any activity related to tulips even if it had known tulipomania would lead to a bust? But even in that example, the monetary environment was distorted by debasement of the currency. Crooks and speculators (who, unlike the former, serve a valuable purpose in the market) will always exist and always be problematic, but when they are enabled with regulations protecting them from bankruptcy and granting them monopolistic privilege; or with an elastic currency encouraging their risk-taking and misallocation of resources, then does the blame fall on the enablers as well.
That the government should cushion the blows of its own making is just another way it can get its foot in the door and create more distortions. I do not think the government should have the role in bailing out industries, especially when the time is coming when the government will be the one that is in need of a handout. I am a little less inclined to criticize welfare programs for their economic effects (which, as with a bailout or stimulus, are negative), as much as for their lack of necessity. I don’t see why charity and initiative (as opposed to just one, which may be insufficient) can’t more than replace welfare programs, especially in relatively normal economic times. During a crisis, drastic measures may be more necessary, but only because of how dependent some have become during more stable conditions.
I apologize for being so longwinded in answering your questions. When I really thought about them, they were much harder to answer than I thought they would be. To be honest, I wish I could say even more, but for both our sake I will leave things as they are. I also apologize for not answering things in the order you asked them and for stringing out some of my sentences.
Hank
Thank you for your in-depth answers, Hank. What I intend to do is give Giulio a few days to respond as well- if I don’t hear from him I will shoot him an email.
I will then put the whole thing together in a way that is easier for readers to digest, share that with you and G to get your approval, and put it up as a new post- it’s likely to get lost here, and I really want readers to see it. Is that okay with you?
Absolutely. And if you don’t mind, I would like to post just what I wrote to my blog, with links back to the other comments/posts of course. I have other things I can post in the immediate future, so if you would like to some how coordinate so that I can post my comment either to synchronize or “syncopate” (or whatever the antonym of synchronize is, chorizochronize? chorachronize? achronize? ectchronize? ectochronize?) with your post, that would be great.
Sure, sure, if or when I get a response back from G I’ll let you know, so you can post on your blog accordingly.
Giulio,
As I said to Henry:
I had initially intended to close this discussion after yours’ and Giulio’s last comments. But after I had finished that damned Turing article, what the both of you articulated struck me with questions that I would hope you could help me understand.
[I hope to put all of this in a single coherent post at some point very soon after your response, but please feel free to answer the questions at your leisure, or if you are not interested in answering just let me know]
What I am curious about is this:
I know from reading your blog that you are especially interested in finding alternatives to the current economic and social order which you find to be dominated by corporate interests which use the tools of the state for their own ends and suppress what might be called “forms of living” that emerge spontaneously and organically from the people. I am thinking here of things like peasant movements and organic farming. Knowledge, in your view, is often an instrument of power.
My questions are, though you reject the idea Henry promotes that property rights are the basis of natural rights: Is there any natural limit to the power of the state acting as an instrument of the people to demand use or regulation of the property held by individuals? If yes, what limits do you think these might be? If no, is how is this not a kind of tyranny of the public, and why will it not give rise to the same sorts of injustices and epistemological imperialism you see now originating from the free market only now from a different set of players- bureaucrats, democratic factions, ethnic groups etc?
Again, as I said to Henry I will not ask anything more from you and think that if you are so kind as
to answer my questions we will have put together a great philosophical discussion.
Hi Rick,
Very interesting questions! I, like Hank, will take some time to respond.
I am very happy to be part of this civil and thought-provoking discussion. Thanks for hosting and nurturing it Rick!
Great! Please take all of the time you need.
Dear Rick
First of all, please excuse my very late response. I have been caught up in work and travel and had no way to sit down and devote the time and effort that your questions undoubtedly deserve.
I thoroughly believe that there is absolutely no natural limit to what the state’s power can be used for. Be it guided by private, ethnic, religious or public interests, the modern state remains fundamentally a coercive apparatus with absolute sovereignty over its territory and citizens (in its classical Weberian definition). If an egalitarian-minded political movement claiming to represent “the people” were to take power tomorrow morning, there would be no internal or “natural” principle limiting its power: it would most probably coercively redistribute the hard-earned property of the well-off and may very well impose its own epistemological imperialism. History is rife with such occurrences.
My central point, however, is that principles of limitation of public and private power do in fact exist. The Declaration of the Rights of Man, the Declaration of Independence, the US Constitution, along with most of modern legal orders clearly limit the power first and foremost of the state (these were, after all, documents enshrining principles defending the private citizen from arbitrary power of centralized monarchies). In addition, most of the greatest minds of the enlightenment (both liberal and egalitarian) such as Montesquieu, Locke, Rousseau, along with practically all of the American Founding Fathers saw the separation of government’s powers as central to the architecture of any democratic nation.
So the first effective limits to state power come into existence with the birth of the modern democracy. We may safely state that the afore mentioned “fathers” of liberal democracies were primarily concerned with the state NOT falling into corrupt hands (be them egalitarian or private-minded). Madison’s famous essays in the Federalist Papers are a prime example of this.
The limitations to state power are therefore, in my personal opinion, not “natural” limits based on axioms of non-aggression or conceptualizations of personal and property rights as libertarians have it. Rather, they are principles born out of historical struggle and resistance against various forms of oppression (in the enlightenment it was against absolutism and aristocracy). These principles may be “self-evident” and “universal”, but they do not exist in a void: if government were to retreat to nothingness tomorrow morning we would not in fact be left with our inviolable personal liberty. Liberty, as French philosopher Foucault once said, is relational: it exists solely in virtue of its mutual recognition.
This act of recognition is thoroughly a positive act, as it is born out of political struggle and out of democratic deliberation. Indeed, the recognition of rights to one another is the basis of a democratic society, of the social contract and is the very “stuff” of democracy.
Thus, any limitation to the power of the state, for me, is not based on “negative” rights but on positive democratic deliberation over what those limitations should be. Which brings me to why I do not agree with libertarian tenets. Even though I agree with libertarians in asserting that government is essentially a coercive apparatus, I don’t believe that its simple retreat will leave us with more liberty. It is not a zero sum game of: more government = less liberty; or, less government = more liberty.
In this conceptualization, when government retreats out of the individual’s life we are left with the free market. But the free market is not a “negative” domain devoid of interests, morals and values; rather, it comes laden with specifically free-market ethics and morals (or lack thereof). For example, in the domain of free markets liberty is not primarily understood as the relationship between free and equal citizens in the public sphere, but is rather defined by, and exercised through, the exchanges between rationally motivated individuals pursuing their self interest. This is a momentous change in the very conceptualization of the citizen and her/his relationship within society.
In conclusion, I therefore argue for increased democratization of the spaces in which individuals interact: be it government or free market. The principles limiting the domains and extents of the public and the private are never given but always negotiated, fought over and forged through political contention. Let us use our democratic instruments to participate in the definition of our public and private life and not retreat to what some consider a “natural” form of human existence. What some deem “natural” (as some proponents of free markets do) is, in my personal opinion, an ideological paradigm no different from the ones we are familiar with today. For me, it is better to define our nature collectively through democratic means in positive political acts rather than allowing “natural” forces -such as inequality- strip us of our personal liberty and collective self-determination.
I thank you again Rick for allowing me to be part of this enlightened discussion, and please excuse me again for this late response. And Hank, thank you for clearly stating and elegantly expounding many of the key points of libertarianism, as well as helping me understand some of its areas which I had previously not been acquainted with. Although I do not agree with all libertarian tenets, I do remain fascinated by it and will now study it in a different light.
Cheers,
Giulio
An absolutely fantastic answer, Giulio. And don’t worry about any delay- you’re timing is actually perfect. What I would like to do is this: I have a post planned for this week. I would like to make yours’ and Hank’s great responses both more digestible for readers, and more prominent in a single post. I will do that over the weekend, send you and Hank my version via email, and if you both approve post it next Thursday.
I am interested in exploring discussions like this further, but I am not sure that text is the best medium. Would you be interested, at some point, in the future in having periodic SKYPE conversations around such issues, sort of a poor man’s DAVOS?
Or better, a kind of proof of concept for the deliberative form of politics to which both you and I aspire.
I intend to extend this invitation to Hank and others as well.
Thank you again for taking the time to do this!
Rick
You guys have been great and this has been a very informative discussion. I would also like to to post some of my comments on my blog with links back to your own, and perhaps Rick’s post, here, as I have done once already. And SKYPE might be worth a try. I do not have it, but it might be worth a go. Normally I am quite shy, and much more comfortable writing and typing than having a conversation with people other than friends, but perhaps. I have gotten to know you both, at least in terms of the things we have been discussing. So, I may be open to the idea in the future. Haha. I just noticed that it has been two months since Giulio left his first comment.
Great post. I did my undergrad dissertation on the notion of emergence as found in Jacobs and Hayek (his spontaneous order), and though I was writing it for a supposedly conservative supervisor, even he had to point out that there is an ideology of emergence which says just “let the market be the market” and that this is insufficient.
I ended up supplementing emergence with the hermeneutics of Paul Ricoeur and his notion of “possible worlds” as an ideal which we can hold up alongside the apparently objective mechanism of emergence. As with the above comments, I completely agree that the need for conversation is central here (as it is to the father of modern hermeneutics, Gadamer – can you smell a motif in my interests?!), because this is where we find the ideals which we aim for.
As an aside, David Graeber’s recent book “Debt: The First 5000 Years” has an interesting interrogation of the notion of the market as a spontaenously ordered beast unto itself, going to the source of emergence (via Samuel Alexander) in Smith’s “invisible hand”, effectively saying that in fact we have never had that ideal free-market which everybody goes on about so much. It is always supplemented/clouded by ideals which go uninvestigated because we assume that the free market is indeed free…
Hey Andrew,
Thanks for this reply- it is loaded with really great information. It’s strange, just last week I had a dusty never read copy of Ricoeur’s Fallible Man in my hand and thought “I should read this”. You’ve just convinced me I should do so now.
To explain my reasoning for why I think this is interesting within the context of my blog; one of the issues I am trying to understand here is why utopias often fail or how they often go horribly wrong.
I thought at least some of this failure can be understood by contrasting utopias with the kind of organic models you find this in Edmund Burke, Smith, Hayek, Jacobs, or more recently James C. Scott in his Seeing Like a State. This issue now appears much deeper than I had initially assumed and pregnant with even more questions.
If you would be willing to share you Jacob’s/Hayek/Ricoeur paper I would greatly appreciate it given that it would help me address these questions.
Giulio and Henry,
Thank you both for participating in this brief but illuminating discussion. I fear that your discussion will be lost among my subsequent posts, so I intend to place all of your questions within a single post in the very near future.
My reason for asking the both of you to engage in this discussion is that I find you both to be very civil, articulate representatives of your different schools of thought. I believe most of us are struggling with the question: “what is the best form of society for human beings to live in?” ,or its flipside, “what is wrong with the society we live in now?”
Each of you answers this question in their own way and I think we can all learn from both of your perspectives.
What I personally have learned from Giulio is to be cognizant of the way power intersects with supposedly neutral markets and to ask myself: how do the way current markets work reflect the capture and use of political power by economic players to shape the market in their interest?
What I have learned from Henry is that schools of thought such as Austrian economics or libertarianism , at least in terms of the way this is understood by some of their proponents, are not just a cover for economic forces looking to use political action- undoing of regulation, lowering of taxes etc- as a means of achieving their own interest, but as a deep seated need by some individuals to create a system in which the distortions Giulio rightly opposes would be impossible.
This indeed is an area of broad agreement and my hope is that by having discussions like this we will be able to establish a common understanding. None of us, not me, Giulio, or Henry are members of the elites that have failed us. I think it is about time people like us decide these questions for ourselves, and we can only do that if we lay down our ideological loyalties and actually start talking to one another.
Thanks again to you both.
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