When It Is Noticed, It Is Usually Because It Is One, When It Is Not, It Is Usually Because It Is Not One†

When It Is Noticed, It Is Usually Because It Is One, When It Is Not, It Is Usually Because It Is Not One†.

Three weeks ago, I posted an article. It was three to five days in the works before I posted it*. There were emails that needed responses (or lack thereof), sources to cite (far too many if you include all the links), thoughts to think, and of course, unrelated activities, that all delayed its posting. In spite of, or perhaps because of all this, it is a cluttered, jumbled, at times hard to follow (I would imagine, though I can understand it just fine myself), mass of words and ideas. It has been edited more than anything else I have posted to date, and I mean just since it was posted! I fixed two things within the last couple hours, in fact.

I was bored and have been contemplating publishing more articles (I actually wrote one two days ago but then all but scrapped it) for the past several days so I decided to re-read some of my most recent posts. Usually when I do this, it is a guarantee that something will need to be tweaked. Such was the case today with the article in question. It is one of the edits itself that has inspired me to write this article I lay before you. This paragraph did not contain an error, but it did contain a weakness:

Sure enough, a few days, maybe weeks later, it came time to post some rebuttals (something I promised I was going to do) to one, Barry Germansky and a comment he left on an earlier post, and one of the phrases I was using just seemed like it needed some backing up by some intellectual authority figure. The phrase was “near-rational”, and again, “quasi-rational”. I wasn’t able to find the quotation at that time, which is why I feel compelled to write about it now.

Let me just say that every single word, punctuation, and idea is EXACTLY how it was before the edit. How can it possibly be called an edit then? Where was this weakness? The truth is that upon reading the paragraph, I was reminded of a logical fallacy (elsewhere in the piece I point out a few straw men), argument from authority (or if you want to be all fancy, argumentum ad verecundiam). So what I did was add a link to the word “authority.”

But understand that this is no mea culpa, but a disclaimer! I am not acknowledging that I engaged in a logical fallacy, because frankly, I hadn’t. But I realized that it looked like I might have, so better to link to the wikipedia page on aforementioned fallacy before someone else (not that anyone would read such an ugly mess) points out what they perceive to be one, thereby attempting to discredit one or all of my points, forcing me to do damage control. It is probably not the sort of thing anyone would notice, whether I have 2 readers or 2 million, whether before or after the edit, but I think it behooves me, as a writer-albeit-amateur, to act on it.

Now, how can I say that I did not engage in this fallacy? Did I not do exactly as the fallacy describes, appeal to authority? Before I answer the second, let me answer the first. I can say it for two reasons, the first being that argumentum ad verecundiam is not technically always a fallacy. Rather, when it is pointed out, it is usually because the specific case is a fallacy, as when the authority in question is not really an authority, or when there is hardly any consensus and you use it as your chief argument. So there is an inherent bias in pointing out the type of argument that makes one automatically assume it is one (a fallacy), rightly so in most cases. The second reason is that the whole point of appealing to the authority was not to win an argument, but more to provide an anecdote on why I phrased an idea in another argument a certain way; as well as to introduce other concepts, for not only did I say that authority figure A said statement B, therefore B must be true, but I dissected some of the ideas behind B, independently of who just happened to have said it. So, to answer the second question, yes, I did appeal to authority, but not really as part of any argument.

Perhaps there is something wrong with me. That is, being so messy on the one hand and so meticulous on the other. I’ll just blame it on my rugged individualism and that spontaneous order malarkey.

*I am proud to say that some of the things I write (including the piece before you) are more spontaneous. I get a blank slate, start typing, and post (unless of course it was originally an email or comment, but the same basic scenario plays out), just like that, no prior preparation whatsoever.

†What is with that seeming paradox for a title? The antecedent to the first, third, fourth, and sixth “it” is “argument.” The antecedent to the second and fifth “it” is “the reason.” The antecedent to each “one” is “fallacy.”

Joseph Schumpeter’s Anti-Utopian Quotation

Joseph Schumpeter’s Anti-Utopian Quotation.

[Disclaimer: The objective of this piece is to get things off my chest, to engage the three people I mention herein, possibly at the risk of weirding out others who do not know the background of the piece, and to show that a voluntary society is both moral and workable.]

A few weeks or maybe more than a month ago, I came across a quotation from Joseph Schumpeter (1883-1950) that I thought made a lot of sense.

Schumpeter is one of those long-dead Austrian economists that you read about every so often. He was a pupil, along with Ludwig von Mises, of Eugen von Böhm-Bawerk, the Austrian Finance Minister. Though he was influenced to a great extent by the Austrian school of economics, he is generally considered to be a member of the Historical school of economics. In reality, he was a little of both (in addition to being enamored of the Lausanne school of economics and influenced by Weberian sociology), as he attempted to solve the two schools’ differences in methodology.

I haven’t read any of his books, and I don’t plan on doing so any time soon, but I recommend to anyone interested in economics or political philosophy from either a classical liberal or heterodox perspective, that they consider at least perusing some of them. I had to do this myself just the other day trying to find his quotation again. I couldn’t find it in any of the books I scanned through.

All the while I was looking myself, I asked some others to help me out. I emailed no less personages than Walter Block (got back to me), Gary North (got back to me), Roderick Long, Mark Thornton (got back to me), Thomas DiLorenzo, David Gordon, Robert Higgs, Hans Hoppe, Robert Murphy (got back to me), Ralph Raico, Joseph Salerno, P.J. Hill, and Thomas Woods (got back to me), with the message:

I read a quote from Joseph Schumpeter just the other day that I thought was pretty good. But for the life of me I can’t recall where exactly I read it, and am unable to find it using google or the lists of Schumpeter quotes I found. It basically states that consumers aren’t really rational, but instead their decisions approach the rational, and it maybe also had something to do with price system or the allocation of resources. I am working on something right now and feel that this quote would be a perfect fit for the point I am trying to get across. I would greatly appreciate your help if you can point me in the right direction, perhaps if you know the exact quotation or the work it is found in. I am emailing a few other knowledgeable people about this quote, so if you are unable to help, that is fine too.

Thank you very much,

Henry Moore

For the record, I do not put Schumpeter on as high a pedestal as I would a Mises or a Hayek or a Rothbard. I find some of the things he wrote to be questionable and some of the things he said to be reprehensible. But he was a very intelligent, well-informed man who has contributed much insight to the fields of economics, sociology, political science, and philosophy, and so there is still wisdom to be extracted from his voluminous body of work. Hence my fixation with just one measly quotation.

I must have originally read it here, though this is not where I eventually found it again. I thought it was worth keeping, so I copied and pasted it to one of my files, just in case I needed it for something.

Sure enough, a few days, maybe weeks later, it came time to post some rebuttals (something I promised I was going to do) to one, Barry Germansky and a comment he left on an earlier post, and one of the phrases I was using just seemed like it needed some backing up by some intellectual authority figure. The phrase was “near-rational”, and again, “quasi-rational”. I wasn’t able to find the quotation at that time, which is why I feel compelled to write about it now.

The reason the particular phrase needed some additional fire power (while certain other phrases and ideas did not) has to do with the its relation to the central issue in my “discussion” with Germansky. Germansky’s op-ed makes several statements and draws several conclusions that I fundamentally disagree with, but I felt it absolutely necessary to convey (though unfortunately not emphasize, as I couldn’t find the quotation), that I did accept at least some of his premises. It is very hard to argue with someone without agreeing with them on a few basics. In spite of Germansky’s straw man arguments to the contrary, advocates of the free market (I speak mainly for libertarians of Austrian persuasion, albeit as a layman) do not have Utopian ideals, and reject the idea of mankind’s and society’s perfectability.

The premise that we all agree on is that of man’s imperfectability, more or less the same as his fallibility. He is unable to create Utopia (Greek for “No Place,” though true Utopians think it is Greek for “Good Place”). There are, of course, different ways of putting this idea to words. The Christians have their Doctrine of Original Sin. A number of other religions also acknowledge that man, while confined to earth, cannot create his own heaven. The secular humanist might think more in terms of man being a superior being, but an evolved (perhaps still evolving) animal nonetheless, and that when push comes to shove, survival, at least in the subconscious of the individual, trumps any notion of moral duty or value.

[Let me briefly pause here, before going on to show how Germansky and Schumpeter each have their own version of the above premise, to say that this piece, came largely out of the blue as several things came together right before me. I have already explained some of this, but while the iron is still hot, I would like to strike it again. That’s why I am giving a shout out to Rick Searle and Giulio Caperchi, two fellow bloggers with whom I have had similar (but less one-sided) discourses, more on which is hopefully to come in September. Searle has gotten me interested in the topic of Utopia of late, and Caperchi has some similarities to Germansky, in that they both argue for a separation of the political sphere from the economic, though the latter is much more rigid.]

Barry Germansky has his own philosophy, which he dubs Pseudo-Practicality (though what little I know of it would better be described as Quasi-Practicality) states that all human thoughts are mere abstractions, that all abstractions are inherently contradictory, but that some (perhaps to be determined through trial and error, or just logical deduction) are less contradictory than others. He also maintains (quite rightly) that societies based on the least contradictory abstract concepts, though still imperfect, are preferable to more contradictory forms of societal conduct or structure.

Clearly, at least in his philosophy, Barry Germansky rejects Utopianism. But then comes the rub. What he advocates in terms of societal behavior and hierarchy violates his own philosophy. Hyperdemocracy and legal positivism, and their products (ranging from the socialist dictatorship to the special-interest oligarchy to the “benign” welfare state) are among the most highly contradictory (and therefore Utopian relative to the claims made for them by their apologists) societal configurations imaginable. I feel that I (will) have shown this (in due time), hopefully within the scope of my discussion(s) with Germansky.

Not to be outdone, Schumpeter also had something to say on this, the imperfectability of man and society. Which brings me at long last to the quotation (Which I did eventually find, buried deep in my files, as it was in a format that made it impossible for my internal search application to find it using any keywords. I basically just happened upon it after becoming demoralized and giving up entirely.) itself, which was first published in 1911:

The assumption that conduct is prompt and rational is in all cases a fiction. But it proves to be sufficiently near to reality, if things have had time to hammer logic into men. Where this has happened, and within the limits in which it has happened, one may rest content with this fiction and build theories upon it.

The implication is that people are not perfectly rational, though they are capable of rational thought and action. The take-away from this is that even though mankind can come apparently close to perfection in so many of his decisions and endeavors, he still can not know and consider every possible facet of every possible detail of his actions and their possible consequences, long enough or hard enough for them to truly be considered infallible. There is a constant falling short, even if in practice this is of little concern.

For those that accept them (what I suspect is the majority of informed free market advocates) these notions preclude all Utopian aspirations on their part. For even if the free market were Utopian on the same grounds (their unworkability) that hyperdemocracy and legal positivism are, it still wouldn’t be Utopian in its ideals or goals, outside of perhaps a few ideological circles. So, a free market might still be Utopian to the extent that it is not all that it is claimed to be. But a great deal of the claims as to what those claims are, are exaggerations. More straw men.

The free market’s advocates do not claim for it the same types of things that other Utopian ideas (including those masquerading as non-Utopian) claim. Take social justice and equality. For even those Market Anarchists who emphasize the value of these two things recognize that even within their preferred system, perfect social justice and perfect equality are just as unattainable as perfect rationality. This is because the benefits of a free society and free economy are still conferred on merits (how valuable a producer, and not just in the sense of a manufacturer or other entrepreneur, each person is to society, to consumers). Discrimination still exists, but it is not, at root, irrational. So there is social justice.

Because what discrimination that manifests itself is rooted in the choices of individuals and their responsibility for themselves, it creates alignments rather than distortions. That is, those with a low time preference and high motivation get what they desire, and those with a high time preference and low motivation get what they desire. Both groups would contain free riders (those with low time preference wait to do things at lower cost than those with a higher time preference, and those who are less motivated do not have as much at risk in relation to the benefit they reap in the form of increased capacity or standard of living brought on by the more highly motivated) on the others, but none of them is complicit in fraud or coercion in so doing. So there is equality (in addition to equality before the law).

The imperfections of society do not reflect the structure of that society, in a free, voluntary, or unanimous consent society, so much as they reflect each individual’s responsibility for himself. Bad choices are the responsibility of the chooser.

This does not mean that there is no spill-over effect. But the negative impact can be lessened if distortions are not present. And where others are wrongly affected, there is room for reparation, compensation, justice to be meted out.

Nor does it mean that others are prohibited from protecting the bad decision maker from some of the consequences of his actions, or helping him to deal with them. For these acts (of protecting or helping) are themselves choices which may be bad or good and come with their own sets of consequences.

Human Action

Human Action.

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