Archives for category: The Lesson Applied
. . . republished from March 23, 2010. . . .

The passing of the Democrats’ medical institution reform package, by clever and opaque political maneuvering, has angered many people. Though all ancient sages unite to advise us not to lose composure about things we cannot change, I, too, have been a bit angry about the recent events regarding what is popularly (and nauseatingly) called “health care reform.”

But what interests me at the moment is how risky the Democrats’ maneuvers are. We often say that politicians can’t accomplish much. Washington is riddled with gridlock; its prime movers are not merely dishonest and petty, but unable to take stands.

Here, however, regarding the nationalization of medicine in the United States of America, the Democrats have taken a daring stand. They are bucking the growing incredulity amongst Americans that government can solve our problems by taking control. For the past few decades, the long-term trend has been towards skepticism about large-scale government efficacy.

But this long-term trend has had its set-backs. The three biggest counter-trends to growing anti-statist opinion have pertained to

  1. War — There was a lot of support, early on, for the conquest of Iraq;
  2. Anthropogenic Global Warming Catastrophe — There was a huge surge, in recent years, in the belief that there had been recent global warming, that this was in some sense unique, that human civilization had caused it, that this would only grow more dangerous, and that government could (and mustsolve it; and
  3. “Health Care” — A rising number of people had begun to see rising costs and spotty insurance for medical care as a problem requiring a national solution.

In each of these three counter-trends to the rising general incredulity over government efficacy, the wave of pro-government sentiment has recently waned. Spectacularly.

Regarding the advisability of conquering Iraq, the widespread support for this had ended before the end of George W. Bush’s final term in office. Even Republican legislators, today, are almost unanimous in realizing that the war was a mistake. The general consensus, now? War and conquest and remaking other polities is tough work, and we should always be super-cautious about engaging in such action.

AGW catastrophism hit its peak popularity in 2008, and is now in steep decline. The leaked emails from Britain were in no small part responsible for this. Careful criticism also had an influence. And, finally, the silly folk sayings confirming global warming itself probably did the most to undermine the position. People can only speak risible nonsense so long before laughing. (Al Gore and media folk were largely responsible for encouraging the idea that every storm, every heat wave, and every exceptional weather event provided “more evidence” that global warming was happening. Record-breaking cold spells and blizzards heralded as signs of “global warming” became a popular folk joke in 2009 and 2010.) The hard rhetorical barrage Americans had been hit with for years — from scientist-advocates, media folk, popular entertainers trying to look serious, and Al Gore — appeared to toughen them up, not convince them.

Finally, support for new national programs for medical insurance peaked last year. By the beginning of this year, popular support had dropped to below 40 percent.

And here’s where courage comes in. It is now risky for Democrats to unite around an unpopular issue.

What could they be thinking? I mean, we expect politicians to rally around popular causes, not unpopular ones. Politicians have demonstrated a rather consistent desire to get re-elected. So what gives? What do they hope for?

I can think of a few possibilities:

  1. Democrats hope that, like Social Security, the new program package will grow in popularity over its first 20 years after implementation. Social Security became the infamous “third rail” of politics, which one dare not be seen to criticize, from the ’60s though the ’80s and beyond. They hope for a similar effect with health care regulation and nationalization.
  2. Democrats know that they have only a limited time in majority, in united government, and feel they have to do what their core constituency really wants, before they lose control. They are hoping that it will be harder to repeal the medical reform package than it was to pass. (It is harder, in America, to repeal programs than it is to create them. This is fairly well established.) Think of it as their “Final Solution.”
  3. They know that it will likely be struck down in courts, and that this will rally their supporters to take on a new, bigger fight, which they can make hay over for years.
  4. They really are (or, perhaps more likely, want to be seen as) ideologues, to appeal to their core supporters in the government unions, people who by their nature think that government is the key to all progress (the sole sense in which they can be called “progressives” . . . that is, they believe only in the eternal progress of increasing size, scope, and efficacy of political and bureaucratic governance).

In these four scenarios, they come out as risk-takers. People of courage.

But, when you look at the hodge-podge of proposals that make up the reform package, they come off as something else again. I’ll let the reader name that “something else.”

Republicans have a huge opportunity for a comeback, here, but only if they stick to the theme that nurtures Americans’ justified incredulity. And the only way to make this stick is to attack the package not for such things as Death Panels and Abortion support — proof positive that Republicans tend to be a rather brain-dead group, so off-point are most of these issues — but for its long-term and wide-spread negative consequences.

This is hard work. I have not done it here. We have only just begun. Thinking “beyond Stage One” (as Thomas Sowell puts its), identifying the “unseen” as well as “the seen” (as Frédéric Bastiat put it), striving to discover the long-term effects as well as the near-term effects (as Henry Hazlitt put it) — these critical modes of thought aren’t easy. They require effort. They rub against the grain of enthusiasm. They seem treasonous to people who demand symbolic action, and identify themselves chiefly by the “good deeds” they do by merely supporting a political party.

Ah, and there’s why we don’t see Republicans normally taking to this agenda. The technique of honest and thorough social thought cuts both ways. It cuts against the right as against the left. It makes hash of simplistic arguments for war as it does against simplistic arguments for government handouts and regulations.

But there is one thing we, who try to practice economic criticism, can take solace in: Our agenda may not be the mainstream political agenda, but it does fit in, very nicely, with the common sense of the American people. Americans’ native skepticism over government may be superficial, but it is strong, and it is growing.

By applying economic thinking, and publicizing this thought, we strengthen the growing incredulity to statism in American culture, and prepare the way, perhaps, even for an eventual political success.

twv, The Lesson Applied

Jeffrey Sachs

…from The Lesson Applied….

There exist trenchant criticisms of the libertarian idea. Henry Sidgwick, in his The Methods of Ethics (seven editions, 1874-1907), provided a concise set of challenges to the doctrine as he understood it. Each of his points is well worth addressing. And yet when today’s major thinkers muster up their inner dialectician to rail against the freedom philosophy, they usually fall flat, get caught up in inessentials and absurdities.

Take Jeffrey Sachs. In “Libertarian Illusions” he attempts to unveil and discredit the ism behind the Ron Paul phenomenon. It’s a pretty lame attempt. Here’s his basic characterization of his target:

Libertarianism is the single-minded defense of liberty. Many young people flock to libertarianism out of the thrill of defending such a valiant cause. They also like the moral freedom that libertarianism seems to offer: it’s okay to follow one’s one desires, even to embrace selfishness and self-interest, as long as it doesn’t directly harm someone else.

Yet the error of libertarianism lies not in championing liberty, but in championing liberty to the exclusion of all other values. Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable — all are to take a back seat.

A well-educated liberal-leaning friend of mine gave the exact same rap years ago. He also referred to “liberty as a value,” so I’ve long pondered that odd phrasing. I think of liberty as a condition dependent on relationships (with other people). I don’t primarily think of it as “a value.”

value liberty, yes, and will agree with Sachs that it is not my only value; I have many others. Nearly all freedom-lovers do. They have lives. Personal lives, communal lives, careers, hobbies, interests . . .

Yet, I do value liberty highest in the political and legal context

This distinction is important. In which domain of life and thought is liberty relevant? What does it compete with — that is, what do some folk place higher, or “alongside,” liberty?

Sachs provides a list. An odd list. Among his enumerated values are compassion, honesty, decency, etc., — and I rate these human characteristics highly, too. I promote them in various ways, every day, in my personal life, within the community I inhabit. But when it comes to making policy for the instrumentality of coercion within my community and nation — which Barack Obama recognizes as the distinct realm of political governance — I take caution. Compassion for people in groups A and B isn’t going to elicit from me policies that would be unjust to individuals X, Y and Z, or folks in groups C and D, no matter how my heart “bleeds” for them, to use a common cliché.

Which brings us immediately to: Justice. Sachs is no Sidgwick. The great 19th century utilitarian philosopher understood how individualist liberals (i.e., libertarians) regarded liberty (freedom):

It has been held that Freedom from interference is really the whole of what human beings, originally and apart from contracts, can be strictly said to owe to each other: at any rate, that the protection of this Freedom (including the enforcement of Free Contract) is the sole proper aim of Law, i.e. of those rules of mutual behaviour which are maintained by penalties inflicted under the authority of Government. All natural Rights, on this view, may be summed up in the Right to Freedom; so that the complete and universal establishment of this Right would be the complete realisation of Justice,—the Equality at which Justice is thought to aim being interpreted as Equality of Freedom.

Sidgwick then went on to argue that this idea doesn’t quite work, in his lights, though he saw its attraction. But note: He didn’t pretend that justice “is a value” separate from liberty. He understood that, for libertarians, justice is liberty systematized — or, at the very least, law is only just when systematically organized around the idea of basic, equal rights to freedom.

To say that libertarians shove justice to the back seat is either witless error or sly dishonesty. Sachs being no dummy, I suspect the latter.

Of course, rhetoric in political debate rarely ascends to honest dialectic. It’s mostly filled with cheap, dishonest verbal barrages. And no doubt Sachs thinks that, since the libertarian view of justice doesn’t work for him, he may characterize libertarian views of justice as, in effect, “non-justice.”

Odd, in someone who valorizes honesty in his list of things over to which liberty must, at least sometimes, give up the driver’s seat.

The reason to talk about liberty “as a value” is that, when we speak of values, we order them: This is more important than that; the other less vital than yet another. And it’s pretty obvious Jeffrey Sachs wants liberty to slide over, even take a back seat, to a number of other issues and interests. So you can see why speaking of liberty “as a value” is so strategically important to him, and to other modern “liberals”: they want to shunt aside considerations of freedom much of the time.

Often, like Barack Obama, they’ll talk about particular liberties running up to an election — checks on governments’ ability to put you in prison or kill you outright, based on mere suspicion — but it’s no surprise that such folk abandon liberties-talk when they get into power. Guantanamo was an enormity to Obama before election; a necessary part of the war on terror, after.

This experience with politicians, which every libertarian has had, is probably one of the largest influences on why we valorize liberty so highly. Politicians are in the business of compromising about the practice of coercion. Justice, in its fundamentals, is not about compromise. Politics is. So libertarians cast a suspicious eye on political processes, and certainly do not regard the outcomes of such processes as anything like “justice.”

More importantly, the liberty element in justice comes down to a core idea that Sachs does not ever mention. He never cracks the nut of the libertarian idea: Liberty limits coercion, the use of force — we are free only to the extent that we are not being robbed, beaten, bullied, or otherwise victimized by some agent (individual or group of same, under cover of some hallowed idea or symbol, or not). Libertarianism is basically the doctrine that no one has the right to initiate force; only defensive and retaliatory force can be justified.

Indeed, crimes are defined by the use of initiated force, or (by extrapolation) fraudulent machinations to extract one’s time or property by deception in contract. To say that liberty must be “balanced” by “other values” is to say that those other values trump one’s right not to be bullied, pummeled, entrapped, coerced, etc. Sachs does not bother even mentioning how his “other values” could possibly warrant the strong arm of initiated force: How does honesty trump liberty? Argue, please, how respect justifies threatening with force those whom you allegedly respect for not complying with your schemes.

Sachs’s list of “values” appears hastily constructed indeed.

Honesty, for example, is the origin of much libertarian analysis. Libertarians regard most of the common rationales for force as dishonest, inconsistent, and overlaid with flowery garlands of rhetoric.

And, in matters where people make contracts, honesty becomes a prime concern. It’s on the grounds of honesty that fraud — a concept derived from initiated force and the notion of rightful property — makes sense. So to say that libertarians place liberty above honesty seems, as P.H. Nowell-Smith neatly phrased such talk, logically odd.

Listing “respect” as something libertarians shunt aside, or back down the value scale, proves equally absurd. Most who advocate liberty for all (rather than merely take liberty for oneself) do so out of respect for others. Indeed, in the standard rhetoric of rights, “recognizing” a right is the same thing as “respecting” a person’s rights. Respect is what it’s all about, at core.

The idea of respecting individuals as individuals, and not merely for their utility in some governmental scheme, or because they fall into this group or that (race, religion, ethnicity, income category), has been central to libertarian thought for a very long time. It was there in Kant, and there, as well, in anti-Kantians like Herbert Spencer and Ayn Rand.

But don’t consult Sachs to learn out about libertarian thinkers. His short treatment of Rand is a travesty: “Ethical libertarians, exemplified by the late novelist Ayn Rand, hold that liberty is the only true virtue. Rand claimed when a rich man responds to a poor person’s plea for help (even by giving mere pennies), the rich man actually debases himself. This view is the opposite of Christian charity and Buddhist compassion, according to which moral worth is achieved by helping others.”

Of course, Rand doesn’t consider liberty a virtue at all. Her virtue is rational self-interest, a “new concept of egoism.” And though I reject Rand’s ill-conceived “virtue of selfishness,” and have argued against it as one of the gravest errors any libertarian thinker has made, I’ll say this: I don’t remember her arguing that benevolence and charity and generosity were “debasements” of the rich man. I’d like to see the reference. Did Sachs cull this notion from some early, Nietzschean work, such as the repulsive spectacle, Night of January 16th?

In times past, the Sachses of this world would have targeted Herbert Spencer as the callous anti-compassionate individualist. And those folks were wrong, too, for Spencer, though dubbed a “Social Darwinist,” was the 19th century’s chief theorist of empathy (following Adam Smith, he made do with a nuanced meaning of the traditional term, “sympathy”). Spencer grounded liberty on altruism as well as egoism, expounding at length on the importance of beneficence to the good society, the free society (see the final two books of his Principles of Ethics).

Spencer is relevant to this discussion because he so clearly limned the structure of morality, specifying that justice requires non-aggression (Sidwick’s “non-interference”) and that benevolence must be placed as something beyond justice, a supplement. Rights to freedom were more fundamental than compassionate giving, yes; but Spencer provided reasons for this prioritization: liberty defends and encourages the voluntary co-operation that actually advances civilization and a true sense of general well-being; beneficence has much more limited social utility.

Trade is a form of voluntary co-operation, and its benefits are mutual: both parties to any exchange aim to gain. Compassionate giving is not mutual, on the face of it. It’s one person giving to another, with the gift coming off the tally of wealth or energy of the giver and accruing to the recipient. It does not increase the powers and wealth of both parties, which is why Spencer treated it carefully, urging caution. It is also why libertarians are very skeptical about those who push “compassion” above freedom, who conflate justice with love.

It is compassionate to give to the poor, or the less well-off in whatever realm of life (to assist the slow in learning, to help the sick to heal, to comfort the dying). And in point of observable fact, compassion is as important for most libertarians as it is for most human beings. And it can be both compassionate and generous to give to organizations designed to provide aid to the victims of chance or fate or even their own perversity.

But it is neither generous nor compassionate to force A, B, and C to help D, E, and F. One cannot be generous with other people’s money: that’s the worst form of prodigality. One cannot be compassionate in taking from some to give to others. Such a practice makes mockery of the very word “compassion” — one only has to listen to the political clamor for student loan forgiveness, or against any critique of Medicare, Medicaid and Social Security, to witness both cupidity and effrontery in near pure form.

Strangely (and indicatively), the technical difficulties of giving to others are rarely addressed by the alleged advocates of compassion. Instead of dealing with them, Sachs provides a stark thought experiment comparison, imagining rich folk on the one hand, and starving folk on the other — and in that context many folks unhesitatingly follow his line of thought. But that’s rarely the context of actual need . . . though one could argue that, today, the only cases where taking from the rich and giving to the poor really make much sense would be in massive expropriation from middle-class and wealthy westerners, giving that wealth to the deeply impoverished in Africa and Asia.

And yet such a vast international transfer rarely sees the light of day. But if liberty must be abandoned for compassion in the face of true needy, that policy would surely be primary. I guess in Sachs’s trinity of “liberty, compassion, and civic responsibility, these three,” the greatest of these is . . . nationalism.

But when one forgets borderlines, and struggles to consider helping the truly needy, the problems become more obvious. What do we give to whom? How much? Are there negative effects to giving?

These problems expand exponentially when forcing some to help others and making such actions an ongoing program. Recipients aren’t simply meek receptacles of others’ largesse. People respond to the incentives of the permanent gift environment. They change their behavior to get more. If the benefactor gives to mothers without husbands, some women will indeed engage in riskier sexual behavior that leads to more offspring. If benefactors pay for (or write off) hospital bills to the uninsured, some people will choose not to insure for illness and injury. If it becomes expected that benefactors will pay for all retirements, then fewer people will adequately save for their retirements.

These incentives influence folks on several levels, and is not a matter, always, of conscious life planning. It’s often about levels of risk in the face of the diminishing bad consequences of risky behavior. If the risks of “bad behavior” are made less, we are likely to get more of that bad behavior.

But it gets worse . . . when unilateral giving is coupled with vast takings, not only does the recipient list for all that “compassion” tends to grow, but class divisions increase as more expect to live at the expense of others, and greater “contributions” are required from those others to support the dependent classes. Parasitism emerges as a dominant social mechanism.

After decades of such programs, people now wonder why the number of “poor people” increases. Why, after billions spent on a “War on Poverty” is there still poverty?

It’s because it pays to be poor.

This is well demonstrated in both economics and sociology, though rarely talked about. Honesty would require the advocates of compassion to discuss this often, but those who speak of a “compassionate politics” rarely hazard such concerns. And they deride those who do. Without compassion.

Nearly every person I know who has adopted the freedom philosophy while coming from other commitments has thought about this at some level. Not all read the vast literature on these subjects — and very few dare read the dread Herbert Spencer! Many simply reflect on the general experience with socialism and the welfare state as preparation for adopting the libertarian idea.

And personal history often helps. Anyone who’s given their labors in a modern society a second thought recognizes the play of incentives on what they themselves do. The longer unemployment benefits are extended, the longer one is likely to remain unemployed. Statistics bear this out, but introspection often suffices. Though libertarians may rank among the hardest working of Americans, we all feel the tug of leisure, and it’s easy to lose one’s grip on the work ethic — the tough work required to seek and maintain employment, whether as a wage earner or professional contractor or entrepreneur.

I focus on compassion longer than his other trumps because it obviously means so much to Sachs. Libertarians realize something that Sachs does not address: That compassion and giving have severe limitations, and — when coupled with governmental exploitation and political demands — too easily becomes the acme of compassionate giving’s opposite: greed. There may be no group greedier than a public employee union pushing for the expansion of their benefits and the bureaucracies that allegedly help “others.”

True progress happens when people face up to the ultimate truth about voluntary co-operation: You must please others to get ahead. Some others. Some paying others.

The great tragedy of the poor is that they have little to offer anyone else. So they are left with gifts or plunder as a way of life. The horror of this is not well recognized, because, like death, the truth is so unpleasant. Though poverty is a frequent subject of literature, no tale has done for poverty what Leo Tolstoy did for mortality in “The Death of Ivan Ilyich.” The degree of universal evasion of the truth of this condition eclipses my ability to measure.

That this message isn’t a main and explicit lesson provided by “public education” is a good sign that education isn’t very educational.

Jeffrey Sachs would undoubtedly point to education as a vitally important “public good” tinged with a dollop of redistributive “compassion” that advocates of “civic responsibility” must advance. And yet this industry is one of the prime examples of massive and thorough government failure. Government-provided (tax-funded, government-run) schooling has engendered a whole education culture mostly devoid of practical use. We live and think in the context of near-universal miseducation.

Most libertarians have thought themselves out of at least some of the traps that establishment educators have set for them. And if they place the idea of resistance to force above all else, it is not in a vacuum, fed only by folks like Ron Paul and Ayn Rand and others.

We who are libertarians have dealt with these ideas on a personal level as well as theoretical ones discussed by economists and philosophers. Vague hand-waving about “civic responsibility” cannot trump our preference for a society respecting individuals and based on a humane division of responsibility that does not evade the actions and actual potential of human beings.

Indeed, when libertarians speak out, protest, devise legislation and repeals, and even go so far as to engage in the ugly work of politicking, they are engaged in “civic responsibility”; pretending that libertarians do so for narrowly selfish reasons is absurd. When Sachs says that the “vast majority of Americans today embrace liberty, civic responsibility, and compassion, and seek a government built upon all three,” libertarians don’t necessarily disagree. The difference? Libertarians judge massive expropriation as not only undermining of justice but also as corrupting the actual culture of voluntary giving.

It is not compassionate to denigrate individual liberty and personal responsibility. It is not compassionate or responsible to advance the war of all against all in the form of the modern redistributive state.

And it is not compassion to wear “giving” on one’s sleeve. That’s a pharisaic something else.

Compassion can only flourish where liberty is the rule.

Generosity and sympathy, when set loose in the environment of the modern state, are corrupted by dangerous greed and the vile temptations of plunder. Sachs’s brief dismissal of libertarianism ignores the modern state’s grave hazards — and carefully elides any mention of substantive libertarian critique of that state. (He engages, instead, in a typical canard: Praising Europe at America’s expense. This tactic quickly loses any grip on reality as Europe descends into poverty and strife.) Sadly, Sachs’s work in general rests upon acceptance of vast patterns of coercion and theft. It is understandable how a person so highly placed in the intellectual wing of the modern state would find the general order a great and grand thing. It is a system that valorizes his own very dear self.

But enormities, too, are big, impressive, over-powering.

Against such powers and principalities, libertarians insist that such influences need not over-power our reason and judgment.

And against lame attacks on the libertarian idea? Actual, informed arguments against libertarian ideas would be of more use. For, it may be that only by overcoming the problems (real or perceived) in libertarianism will we ever achieve a free society.

Final thought: Sachs’s main gambit, the “play of many values,” was precisely the issue that decisively turned me to libertarianism. Value subjectivity and value diversity present grave problems for moral philosophy and political practice. They do not require the kind of robust state that Sachs seems to think they do.

twv, January 20, 2012

A number of writers from across the political spectrum have been writing about the word “capitalism” recently.* What does it mean? Do we have what it signifies? Does talking about such a seemingly vague thing increase our understanding?

enjoy-capitalismJohn Stossel argues that we don’t live under capitalism, unless you modify the word to mean “crony capitalism.” His essay “Let’s Take the ‘Crony’ Out of ‘Crony Capitalism’” makes a very familiar case:

The word “capitalism” is used in two contradictory ways. Sometimes it’s used to mean the free market, or laissez faire. Other times it’s used to mean today’s government-guided economy. Logically, “capitalism” can’t be both things. Either markets are free or government controls them. We can’t have it both ways.

The truth is that we don’t have a free market — government regulation and management are pervasive — so it’s misleading to say that “capitalism” caused today’s problems. The free market is innocent.

But it’s fair to say that crony capitalism created the economic mess.

This is all very well and good. Accurate in its own way. But I am not sure we should give in to either libertarians who want to defend free markets or statists who want to bury them in red tape. “Capitalism” isn’t a word that means just one thing, just as “democracy” isn’t a word that means just one thing. One usage isn’t obviously better than another. Thackeray’s coinage serves more than one master.

I support laissez-faire. It’s a great and noble — and ultra-civilized — policy. But laissez-faire isn’t the only form of capitalism. Indeed, the dominant form has always been some form of dirigisme, or piecemeal state control of market activity.

So, I suggest letting everybody use the word “capitalism” in a broad sense, as an economic system featuring a large degree of private property both at the consumer and producer levels, wide market interaction in both consumer and producer goods, and fully developed labor markets.

It nevertheless remains the case that laissez-faire is more capitalistic than dirigisme. For, the more state control of markets, the more limitations on private property — particularly with command-and-control regulation, rather than rule-of-law oversight — capitalism morphs into socialism. The more government you have, the less the capitalist element dominates.

To put this more straightforwardly, capitalism is defined by the features that laissez-faire unreservedly supports: private property, freedom of contract, markets in capital goods, and contract labor. So, though dirisgistic capitalism is indeed capitalism, laissez-faire capitalism is “more capitalistic,” by the standards of its very definition.

There is one sense that this understanding, however, is not true. That’s the sense in which dirigistic capitalism serves capitalists, that is, people with money. It is a truism of government that it rarely serves all, equally. And it is also a truism that money talks in politics. So, dirigistic capitalism amounts to little more than plutocracy.

This sad truth comes as a shock to those who hail from the left. Those leftists who propose to make capitalism more dirigistic often merely serve as useful idiots for the very rich. Businesses have a long history supporting mercantalist policies, policies that so-called “progressives” thought “regulated business.” Instead, regulations most often help business cartelize, even monopolize, their positions. Getting the upper hand is something many businessmen attempt, and attempt through government.

Such operations have taken many forms, from anti-trust (which actually makes businesses less competitive) through micromanaging regulation to outright subsidy.

It can be quite amusing to watch a standard-brand leftist make all the arguments necessary for businesses to trump their market competition. The trump being, of course, government.

This was most entertainingly seen in the recent bailouts, where it was a whole class of bankers and intermediaries who were aided, not the general run of market participants. Indeed, bankers’ jobs and intermediaries’ jobs were made secure, and their fortunes restored, while the economy lurched out of control and into double-digit unemployment. Such is the logic of dirigisme: Not very logical.

Very political, though.

The great rule of capitalism is that everybody’s worth differs in differing contexts. Laissez-faire is a form of regulating capitalism by the rule of law, trying to set a political limit on the value of human beings. In laissez-faire, the political value of people are equalized by their equal rights to liberty and free contract. But under dirigistic capitalism, the fluctuating value of human beings is re-introduced into the political system because rights no longer regulate human interaction, micromanaging policy-makers do. So everything goes up for grabs.

Under dirigisme you get the general exploitation of the politically weak by the politically powerful — two classes that continually shift, according to the deals and machinations of politicians. You get what Anthony de Jasay calls “the churning state.”

I have no special love for the term “capitalism,” and see no great and overriding reason to shore it up. I just want people to be able to talk to each other about the realities of the current (and past) social world. Capitalism obviously exists in some form today. But it is obviously not laissez-faire capitalism. What we are blessed with and suffer under is dirigistic capitalism.

Two French terms. Why not?

It should be remembered, though, that dirigisme is the ancient, traditional state practice. It flows naturally out of the limited-access society’s basic deal: Tough guys provide order, and in “exchange” we — each of us — gets a fairly stable, quasi-guaranteed place in that state, however lowly.

The idea of laissez-faire, though perennial, is much newer, and quite revolutionary. It is deeply associated with the idea of a rule of law, and its main feature, on the personal level, is personal freedom, the ability to choose what you do in life.

It is always amusing to me how advocates of dirigistic capitalism so readily devolve into advocates of ancient political notions of status. Both centrist Republicans and Democrats tend to move in that direction, and leftists, in particular, keep reviving ancient notions of class and “my station and its duties.”

The great thing about laissez-faire is that it allows us that opportunity to throw off the shackles of time and chance and programming, it conjures up the ability to remake oneself, correct course. This allows for a great amount of progress and flexibility. But stability? Nothing can be guaranteed.

Those who want guarantees of place and position, they tend to hate the freedom in laissez-faire. They don’t want government to “let others act” within the confines of a rule of law, they want more regulation.

Ah, regulation!

The lifeblood of dirigisme. The command structure of socialism. The inheritance of the conquerors who established the first states. At one with military orders, the darling of bureaucracies, the goal of most politicians. It is coercion instantiated in its most paradigmatic act.

The paradigmatic acts of laissez-faire, on the other hand? First, the trade; and, second, being held responsible for one’s own actions.

But I’m more than willing to admit that “capitalism” fits a broader history than the ideal of laissez-faire. So the word must be modified. “Dirisgistic” will do. I offer it to those reasonable people — see, for instance, Stephan Kinsella in his recent essay “Capitalism, Socialism, and Libertarianism” — who wish to keep their terms straight and move beyond semantic disagreement to substantive argument.

And perhaps more French words could be found for the varying degrees of control that have characterized American market life.


* This essay was originally posted April 16, 2010, on The Lesson Applied, by Wirkman Virkkala. A very few changes have been made to the original text.

…reposted from The Lesson Applied, April 5, 2010:

I may disapprove of what you take, but I’ll defend till your death your right to take it.

The same sort of values and reasoning that support the right of free speech supports, also, the right of self-medication.

Because we have had free speech rights, but have lacked the right to self-medicate, the two rights seem (to many) the most distant of cousins, if not warring foes. To most folk, the idea of self-medication? Heaven (or the state) forbid: We must always be guided by doctors, who know better!

But, in a free society, it is each person’s own responsibility to decide what to do with his or her body. In families, spouses and parents and siblings and even children can assist. But, unless a person is addled or unconscious, the responsibility for decision making is his or her own.

It’s this way regarding belief and speech. We have a right to believe and say as we wish. But the responsibility to refine those wishes for our own betterment? That’s ours, too. The right and the responsibility. The right gives us freedom to choose a wide array of thoughts. The responsibility means that we can’t blame others for our silly notions or foolish talk. And decisions.

So it is with medicine. And by this we must mean psychoactive drugs as well as drugs for acid reflux, blood pressure, or what-have-you. When I mentioned this to a friend, he was aghast at the thought. “We don’t have a right to self-medicate for pleasure!” I asked why not. He was on the fence about a right to self-medicate to avoid pain or repair physical maladies, but for just pleasure? Of course not! The idea had never crossed his mind. And yet he, like me, knows many people who are prescribed Paxil-related drugs, drugs that are designed to increase pleasure.

But avoid pain, first and foremost. Avoid the pain of stress and anxiety.

Besides, these drugs are prescribed. It’s not a question of a right, right?

Wrong. I see no persuasive reason for the prescription system, either. If I want a pain killer, it’s my business, no one else’s.

The arguments for the current manner of regulating drug usage is harm prevention. And, surely, people can hurt themselves with drugs. As they can with food. As they can with cars. As they can climbing rocks and mountains. As they can believing weird things about “being clear” (and I’m not referring to Peircean pragmaticism).

The reasons for treating one’s own medicinal use as a right, and the costs of said exercise of the right as one’s own responsibility, are the same here as regarding speech. These reasons include:

  1. Each person has the greatest incentive to learn from his/her mistakes, to make the best search for knowledge and advice, so it is almost natural and commonsensical to leave such decisions up to each person, not to “each other.”
  2. Other persons often face strong incentives to exploit persons under their care. By distributing responsibility to each person’s own self, rather than to some organization of others, one cuts down on temptations for corruption and abuse.
  3. When a responsibility is one’s own, the natural relations with others tend to be contractual, and contracts contain more clarity of scope and correction than other forms of interaction, which tend to be arbitrary and murky. When things go bad, it is easier to correct for mistakes and error when rights and responsibilities are assigned to each person rather than focused on professional bodies.
  4. Charitable aid and generosity are more clearly demarcated, and flourish with less chance of self-delusion, when responsibilities are individually assigned rather than collectively devolved onto other groups.

These sorts of reasons for individual freedom and personal responsibility apply to matters of belief and speech and to matters of care and feeding as well as medication. When the default position for rights and responsibilities, for adults, is to the persons themselves, feedback systems are set in place for widespread chance at learning. When these rights are taken away, or the responsibility for bearing the costs associated with exercising those rights is taken away, you end up with people becoming weaker of judgment, more foolish.

This principle of what might be called moral education was summarized in relation to money in a classic essay:

The ultimate result of shielding men from the effects of their folly,
is to fill the world with fools.

And here we come back to the sentiment I began with. It is a somewhat harsh doctrine. Voltaire is said to have declared “I may disapprove of what you say, but will defend to the death your right to say it.” I revised this for drug use, to say “I may disapprove of what you take, but will defend till your death your right to take it.” Drugs are dangerous things. You can, indeed, cause yourself much harm, even death. I can see no reason to mask the danger here. I support freedom even if some, under the tutelage of generalized personal responsibility, fail rather than grow.

This harm and the possibility of failure is why many people wish drugs regulated, prohibited (depending on the drug). But this intention of helping does not guarantee that people are actually and truly helped.

The unintended effect of the prohibition of something some people really, really want, means that they purchase those goods on the black market. And there, without standardization, dosage is hard to control. Drug overdoses, which on the free market would be the occasional result of carelessness, is, on the black market, a too-frequent and far too common result of prohibition itself.

The clarity that freedom engenders would surely help many who now abuse illegal drugs. But it is very hard to get people to rethink old prejudices against freedom in these cases. In other cases, too. So often folks let themselves assume that freedom doesn’t work “in this case,” but still expect it in so many others, like where they wish to eat, where they find employment, and much else.

The logic of liberty works across all (or: nearly all?) realms of experience. Responsibility, the flip side of freedom’s coin, promotes betterment by providing feedback and spurring learning. Few elements of life neatly wrap up into a tight system where learning is perfection. We all make mistakes. Sometimes we make fatal mistakes. But not allowing us to make some mistakes ill prepares us for all sorts of situations. And the sheer bulk of regulation in all walks of life, from education and medical care to dining and wining and even signing, weakens us, turns us, increasingly, into sheep who require shepherding, rather than more independent stock who have the wherewith to decide when to follow the flock, when to strike out on our own.

The lack of courage amongst the knowing population on this issue saddens me. But it’s not just courage that is lacking in the populace.

What is most lacking is the vision of social causation that sees human beings as complex and fallible, not perfectible but most adaptive if held responsible for their actions. Our diversity requires distributed responsibility, several property, and individual freedom. And we must be able to think beyond the obvious or the merely traditional. We must apply Bastiat’s lesson of looking beyond the easily seen, outwards, towards what is usually unseen. But there. And vitally important.

One sentence has been elided from the original, in this reposting.