Wednesday, January 30, 2013

The Culture of the Invisible Hand

The great contest of world-views is the battle between the Invisible Hand narrative and the Exploitation narrative.  It's simple really.  The Invisible Hand narrative says that in order to get ahead you have to serve other people.  The Exploitation narrative says that without the right politics to curb economic greed it is Katy bar the door.

Frankly, it is the Exploitation narrative that seems closest to common sense.  Hey, it's a brutal world out there: people are looking for the opportunity to screw you and yours.  How then is it possible that a sober-sides like Adam Smith ever proposed the Invisible Hand as the reality of economic exchange?

For that we turn to Max Weber.  After writing his Protestant Ethic and the Spirit of Capitalism Weber wasn't done with capitalism.  He had seen that the Puritans had developed the idea of work as a calling and had trained the minds of men to work for economic gain in an ascetic way, without wanting to end up in a life of luxury and power.  But he wanted to know more.

In his General Economic History he went back and mined the step-by-step development of the capitalist economy.  He found some remarkable nuggets.

For instance, Weber found that the Puritan sects separated themselves rigidly from society.  They were, in Rodney Stark's model of religions, very strict in controlling members' behavior.  You would expect that this rigid separation from society would legitimize an ethic of honest dealings with insiders and exploitation of outsiders.  But no.  Many sects prided themselves on acting in a trustworthy manner even towards the "sinful children of the world."

Here's another interesting nugget.  The Puritans so prized the "calling" in work that they preached that men should be "sober" in love for family and associates.  As Reinhard Bendix writes in Max Weber: An Intellectual Portrait,
This emotional detachment from the community also reduced the social distance between its members and the strangers beyond the "gate."  Hatred is as dangerous to the soul as love, and where the relation to one's kindred and associates is detached the rejection of the stranger becomes less imperative.(p70)
This goes back, according to Weber, to the "development of mutual trust among men as individual members of a Christian community."   Then Bendix retails Weber's history of the city, which begins with associations of people that still retained their primary identification with their kinship group and only later--in the west--developed into the "burgher [that] joined the citizenry and swore his civic oath as an individual." So the city eventually developed into
an association of local property owners whose goals were: the amicable settlement of disputes; an administration of justice and a monopolization of economic opportunities that would safeguard and enhance the interests of the town residents; a reliable allocation of the obligations due to the local lord in lieu of arbitrary taxation; and, finally, the institution of a military organisation that would enhance the political and economic power of the community.(p75)
The whole urban "package" involved several items:
  • "a single standard of ethics in all business transactions"
  • an "oath-bound fraternal association [as] an important precedent for the congregational form of church government.
  • the city as an association of individuals with weakened kinship ties and rituals
We can see how the rule of the educated class in our modern era attempts to turn back the clock on these developments.  It tries to create a distance between political ethics and business ethics, privileging political values over economic values.  It privileges group affinities in race, class, and gender, over the individualistic transactional exchange relationship of the city that even extends to family relationships.  And it tries to break up the congregational notion of, e.g., the New England town meeting, with the mobilized factions of modern democratic politics.

The problem for conservatives, who mostly follow the "urban package" of fair dealing, associational government, and individual responsibility, is that the working class didn't get socialized in the old ways of the Burgertum.  Instead the new educated ruling class took them into its government schools and taught them to be go-along-to-get-along clients of the regime.

How do we persuade the regime clients that they are getting royally screwed by their liberal political masters?

The answer is, of  course, that we don't.  We can only wait until the administrative welfare state crashes and burns.  Only then will the people be ready to listen to us and our radical notion of the Invisible Hand.  

Don't just sit there with your hand out.  Make something for others; do something for others.  Then worry about what you get in return.

Monday, January 21, 2013

Three Liberal Injustices

Liberals are the ruling class in America, and that means liberal injustice.  Political power gives you the ability to lean on the scales of justice, and what's the point of power unless you abuse it?

The greatest injustice of the liberal era is probably the demolition of the low-income family.  There is no mystery about how this has happened.  It is an artifact of the administrative welfare state.  When you set out programs of free stuff, which people can get by qualifying as needy, then people will find a way to qualify.  The result, as Charles Murray has demonstrated in Coming Apart, is that in the bottom 30 percent work and marriage has collapsed.  He means that lower-income men don't work and lower-income women don't marry.  Lower-income children typically don't live with their fathers.  Higher income folks like you and me?  The top 20 percent are married, they work and typically don't get divorced.  There is a simple word for this: unjust.

Almost as bad is the sequestration of workers' savings.  It's hard for employees to see this, but easy to see if you are an employer.  About 20 to 30 percent of the cost of labor goes to the government for a range of programs ranging from Social Security, Medicare, unemployment, disability.  Of course all these monies are for the people.  But the people don't get to direct those monies; they are sequestered by the government and only available to people when they qualify, by age or by situation, for a disbursement.  This means that people are enrolled in a forced savings program but during most of their working life don't get the benefit of their savings.  Suppose people put that 20-30 percent of income in a savings account.  If they are prudent they would have enough money in 10 years to start a business, enough money in 20 years to send a kid to college, enough money in 30 years to retire.  Instead the money is given to politicians so they can buy votes.  There is a word for the sequester of the worker's savings: unjust.

The third great injustice is the nationalization of education.  It means that the culture of the ruling class is the only culture allowed in the education of our children.  When the First Amendment proscribes an "establishment of religion" it is demanding a separation between church and state, between the moral/cultural sector and the political sector. But the education of children is clearly a moral/cultural task.  The German ideal of education is "Bildung," an untranslatable word that means "form" or "image," the forming or development of a human being.  It stands to reason that any parent should have the freedom to direct the education of their children independently of the state and the views of the political ruling class.  It stands to reason also that a ruling class will abuse the power to educate our children, to mold them into mindless supporters of the regime, and that is what has happened.  Liberals like the current system because they are the ones that get to set the educational agenda.  But there is a simple word for the education system in America: unjust.

There are six ways of looking at the monstrosity of our modern ruling class: its cruelty, its corruption, its injustice, its waste, its ignorance, and its delusion.  Today we have dealt with injustice.  There will be more to come.

Friday, January 18, 2013

Life After Liberalism

There are two pieces out today on the topic of "An American Manifesto:" the question of life after liberalism.

Walter Russell Mead expands on his "end of the blue social model" notion with a discussion of "Liberalism 5.0."  He sees a continuation of the past, with increased order and increased liberty.  But his vision seems to call for more government.  He writes about the increase in laws that would accompany an end to the "drug war."
The 21st century, if we get things right, won’t see either the triumph of an all-powerful government or the return of the Articles of Confederation. The government will do more than it does now, and regulate activities that are unheard of today, but individuals will have more choices than they currently do and their rights and their property will be better protected.
Really?  But this will mean a continuation of the disciplining of the ├ętat policier, the government that sees its project as the aesthetic task of making society elegant, disciplined, and legible.

Or there is Charles Kesler.  In his view President Obama thinks his reelection means
that liberalism has returned to its natural role as modern America’s public philosophy or established religion... Reaganism was a blip, an anomaly.
But the Democrats’ very successes are intensifying liberalism’s contradictions, both fiscal and philosophical. And so "American liberals are coming to the end of their rope."  The old liberalism believe in progress as "something scientifically and rationally certain, benign, and steerable."  But the advent of postmodernism has made politics not a discovery process but just a dance of power, "more a matter of will than of reason."

So we may say that liberalism is reducing to a matter of power, of enticing people with enough "free stuff" for the ruling class to win elections, and that all the talk about "fairness" is just an apology for power.

The question then becomes, as I have argued, what the "religion" will be on the other side, after liberalism runs out of money with which to deliver "free stuff?"

One of the key roles of religion, according to Nicholas Wade in The Faith Instinct, is to deal with the freeloading problem, that in any society, it "pays" to work less and consume more, because the whole point of society is to share out the risks of life.  Thus every society needs to socialize people to feel good about making and feel guilty about taking.  Otherwise you have to restrain the takers with government, and government means force rather than persuasion.

Obviously modern liberalism has inverted this idea.  It encourages people to think that other people are freeloaders; it does not ask people to worry about their own freeloading.  Or "sin" as we used to call it.

I argue in "An American Manifesto" from recent left-wing scholarship that the way to the future is to reduce the amount of government and "system", and increasing the amount of face-to-face civil society.  Government is force, politics is division, system is domination, and all these things reduce society to a regiment of compulsion.

We need to reduce the incidence of government programs and get people to interact with each other to obtain their daily bread and spread the risks of life around.  When people interact together they are more sensitive to their contribution and the contribution of others.  The freeloader is not just "the rich" or "welfare moms" but a real person in their acquaintance.

But when people are stuck in a system they experience the helplessness of a mechanical existence and just go along to get along, taking advantage of the system as the system takes advantage of them.

There's nothing mysterious about this.  It goes back to Adam Smith and the "invisible hand."  The idea is that, for most people, they cannot get what they want in this world without doing things for other people.  Thus they can only satisfy their selfish wants by satisfying the wants of others.

Some people insist that this notion is invalidated by the inequality of power: exploitation.  People give a lot but get little in return.  There's no doubt that inequalities exist; the question is when these inequalities require the intervention of force.  And how likely is it that force will make things any better?

Wednesday, January 16, 2013

The Political Situation in Context

Should they or shouldn't they?

Should Republicans fight President Obama tooth and nail over debt ceilings, fiscal cliffs, and spending sequesters, or should they let them through?

Because the fights are really minor skirmishes on the march to sovereign default.  The federal deficit is about six to seven percent of GDP, and that can't go on forever.

And even though everyone is dumping on the Republicans for their intransigence (President Obama) or their timidity (conservatives) the fact is that Republicans have the whip hand.

When we hit default day then Democrats are going to have to call for tax increases on the middle class and/or spending cuts.  The American people won't like that.  Republicans?  We say cut spending, so nothing will change for us.

But what do the scholars and the experts tell us about all this?  I'm glad you asked, Senator.

In The Calculus of Consent, James Buchanan and Gordon Tullock argue that the government should use unanimous consent, not majority voting, as its default voting system.  Why?  Because that would minimize the ability of some people, even a majority, to force costs on other people.  Under unanimous consent, the supporters of a government measure would have to pay off the opponents in order to get their consent.

Shocked?  Appalled?  Well, the system of "logrolling" where solons vote for the other guy's measure in return for the other guy's vote for their own measure is already the way that politics is done.  What Buchanan and Tullock call unlimited "side payments" is just a formalization of this system.

But let's roll out a key quote from the end of the book:
[N]o social organization in which men (some men or all men) are allowed freedom of choice can prevent the exploitation of man by man and group by group... The relevant choice among alternative institutions reduces to that of selecting that set which effectively minimizes the costs (maximizes the benefits) of living in association.  The shift from market organization to political organization does not, in any way, eliminate the opportunity for specific individuals and groups to impose external costs on others...
This is central.  In any situation, where a decision-maker has the power of choice, he can use it to exploit someone else.  Let us stipulate Marx's notion that capitalism is exploitation.  As Chuck says:
In one word, for exploitation, veiled by religious and political illusions, [capitalism] has substituted naked, shameless, direct, brutal exploitation.
The same applies to socialism and communism, in spades.  That's what Buchanan and Tullock show in their analysis of political voting.  Any system of deciding social and political issues will impose costs on the losers.  In one word: exploitation.

People are selfish; the rules of capitalism as encoded in economics recognize this.  Thus:

[Its] organizational norms are based on the view that [selfish] behavior can be channeled in such a direction that it becomes beneficial rather than detrimental to the interests of all members of the community.
That is the means of Adam Smith's "invisible hand."  The question that Buchanan and Tullock ask is this:
Can the pursuit of individual self-interest be turned to good account in politics as well as in economics?
Buchanan and Tullock answer that we can do better, and one way to do this is to empower the minority to demand compensation when society wants to do something they don't like.

That's something that President Obama and the ruling class, the executive committee of the educated elite need to remember as they send the whole economy into the toilet. 

Friday, January 4, 2013

Critique of Pure Politics

Our liberal friends like to make the rule of their administrative welfare state seem mild and beneficial, as all rulers do.  But we conservatives, trying to stem the tide, have a different idea of their politics.

We see four highly charged electrodes that will do serious damage to society unless carefully handled: government, politics, culture, and system.

Government is force.  This is so obvious that it often gets forgotten.  Government operates by taking money from people by force and spending that money on its supporters.  It starts with the money government takes to fund its armed forces and its police forces and goes on from there.  The question about any government program should be: "why does this need to be done by force?"

Politics is division.  If you put a bunch of Americans into a room to solve a problem they will solve it, and solve it in a way that gives everyone a piece of the action.  If you want to divide them then put a politician into the mix.  Politicians divide people into the 51% and the 49%.  Nothing wrong with that; it's just what they do.  But divide they will, wherever they go, and so it's a good idea to minimize the amount of politics going on.  Politics, after all, is civil war by other means.

Culture is power.  This is something that conservatives know to their cost.  You cannot speak to anyone unless you have standing in the culture.  When you are cut out of the conversation, as conservatives are in education and in media, you might as well not exist.  The way that liberals have shut conservatives out of the culture is an injustice and cries out fro redress.

System is domination.  There has to be a system, said a liberal friend about health care.  No there doesn't.  Anytime you have a social system you have domination, because the system declares that there is one way, the system way, to do things.  Everything that the government has reduced to a system, from health care to pensions to education to welfare, is a monstrosity.  Social animals don't work by system, they work by communication and consensus.

Of course, no society can do without government, politics, culture, and system.  The point is that they are like electrodes, highly charged with energy: they can be used for good and for ill.  The great temptation is to assume that if "I" ran the government, drove the politics, influenced the culture, organized the system, that all would be well.

No it wouldn't.  These four electrodes are like sirens, seducing us into evil.  The meaning of life cannot be precipitated into government, or politics, or culture, or system.  It can only be found in the actual living of life, and life is best lived at a respectful distance from these four highly charged electrodes.  Otherwise they might electrocute you.