THERE IS A STRONG TENDENCY for all of us to regard what is as if it were the “natural” or “normal” state of affairs, to lack perspective because of the tyranny of the status quo. It is, therefore, well, from time to time, to make a deliberate effort to look at things in a broader context. In such a context anything approaching a free society is an exceedingly rare event. Only during short intervals in man’s recorded history has there been anything approaching what we would call a free society in existence over any appreciable part of the globe. And even during such intervals, as at the moment, the greater part of mankind has lived under regimes that could by no stretch of the imagination be called free.
In yesterday's post, I said something about the intellectual significance of New Individualist Review to the political development of what came to be known as 'fusionism' Stateside and its Hayekian context (and so the mainstreaming of neoliberal ideas, 'neoliberal' in its historical sense, that is). I also suggested that Friedman's essay (I quoted the first two paragraphs above) should be understood in context of the surprisingly critical reception of the Road to Serfdom thesis in this context. (Friedman's friend and colleague, Stigler, savages it.)
I wish I had read Friedman's essay before I blogged on Graeber and Wengrow's recent Dawn of Everything because one way to understand the significance of their book is that it challenges the idea that a genuinely free society is rare. Now, obviously Friedman and Graeber/Wengrow don't mean the exact same thing with a 'free society.' While Friedman is a right or 'individualist' libertarian he is clearly not an anarchist, so it's not the case that Graeber/Wengrow refute Friedman's claim here. (And it's pretty clear that Graeber & Wengrow would not accept Friedman's claim that we're living in a free society.) But since Graeber/Wengrow and Friedman agree that legally sanctioned coercion is itself generally problematic (in ways that mainstream liberals often think not, alas), my suggestion is not altogether farfetched. Because it's pretty clear that the many urban polities that Graeber and Wengrow admire are open to commerce while rejecting state organized/sanctioned/rent-seeking (etc.) capitalism (which is what draws Friedman's ire, too).
So, one way to react to Friedman's set-up of his argument is that he is (tacitly) working with a biased sample or a historically limited data-set (something Friedman may well appreciate given his kind of research in monetary history) because, and this is the interesting part, he is drawing on a literature (shared by Marxists and certain classical liberals alike) that presupposes something like an idea of progress (that has already occurred) and that is distinctly Eurocentric/Western. This can be checked because Friedman's main source is Lectures on Law and Public Opinion in the Nineteenth Century (1905) by A. V. Dicey. Dicey clearly impressed Friedman because he also frames Friedman's argument in his important earlier (1952) essay "Neo-Liberalism and its Prospects” that I have discussed here.
What makes Friedman's "Is a Free Society Stable?" interesting are two important observations. First, and this one (I am pretty sure) he has repeated elsewhere but here clearly credits Dicey with noticing, is that the consequentialist arguments that tend to support classical liberalism all violate what we might call 'naïve empiricism' or 'lived experience' because they require a kind of statistical or aggregate perspective:
The argument for a free society, he goes on to say, is a very subtle and sophisticated argument. At every point, it depends on the indirect rather than the direct effect of the policy followed. If one is concerned to remedy clear evils in a society, as everyone is, the natural reaction is to say, “let’s do something about it,” and the “us” in this statement will in a large number of cases be translated into the “government,” so the natural reaction is to pass a law. The argument that maybe the attempt to correct this particular evil by extending the hand of the government will have indirect effects whose aggregate consequences may be far worse than any direct benefits that flow from the action taken is, after all, a rather sophisticated argument. And yet, this is the kind of argument that underlies a belief in a free or laisser-faire society.
So, that also means (and this is Dicey's initial observation) that arguments for a free society have a kind of utopian quality ahead of their existence. And even while such societies exist, given the abstracted/philosophical nature of the argument it is "says Dicey...really amazing and surprising...that for so long a period as a few decades, sufficiently widespread public opinion developed in Britain in favor of the general principle of non-intervention and laisser-faire as to overcome the natural tendency to pass a law for the particular cases." (The natural tendency is, thus, rooted in what I called the naïve empiricist assumption which is attributed to ordinary life.) Obviously, as an aside, Marxists would take Dicey's argument, if they cared to take it seriously, and suggest that it is violence (and then ideology) that has to do the job to get people to accept a free society.
I don't mean to suggest such utopianism is required. For, as Friedman notes there is another route that is at least partially ground in experience:
one of the factors that led Bentham and the Utilitarians toward laisser-faire, and this is a view that is also expressed by Dicey, was the self-evident truth that if you wanted to get evils corrected, you could not expect to do so through the government of the time. The government was corrupt and inefficient. It was clearly oppressive. It was something that had to be gotten out of the way as a first step to reform. The fundamental philosophy of the Utilitarians, or any philosophy that puts its emphasis on some kind of a sum of utilities, however loose may be the expression, does not lead to laisser-faire in principle. It leads to whatever kind of organization of economic activity is thought to produce results which are regarded as good in the sense of adding to the sum total of utilities. I think the major reason why the Utilitarians tended to be in favor of laisser-faire was the obvious fact that government was incompetent to perform any of the tasks they wanted to see performed.
So, you might say that on Friedman's view Bentham and the radicals that followed backed themselves into laisser-faire as a kind of second best (or n-th) best option. What's undoubtedly correct here is that there is no intrinsic connection between free society and Utilitarianism. But Friedman ignores how important Adam Smith (and Hume) is to Bentham's intellectual development and the more important political radicals.
The second really interesting observation by Friedman is set up by him noting that "Dicey’s argument is enormously strengthened by an asymmetry between a shift toward individualism and a shift away from it." (For all his admiration, Friedman doesn't mince words about a kind of Victorian complacency in Dicey.) By contrast, in virtue of accepting the rarity of a free society (and a kind of explanatory parsimony), Friedman treats the mechanisms one might posit in a road to serfdom thesis as symmetrical (even potentially identical) with those that lead to a free society. Friedman is motivated to do so, also, by his reflection on Schumpeter's acceptance of the Marxist idea that capitalism is doomed to failure (but with this twist that "[W]hereas Marx’s view was that capitalism would destroy itself by its failure, Schumpeter’s view was that capitalism would destroy itself by its success.").
As an aside, if you accept my claim that Hayek is Friedman's real target in his 1962 article (which I claim is plausible on contextual grounds), what's neat about this is that he inscribes the road to serfdom thesis in a larger debate, inspired by Marxism, about the historical necessity of capitalism, and its subsequent demise. And in Friedman (recall here and here) not unlike Foucault in Lecture 7, The Birth of Biopolitics, 21 February 1979. Birth of Biopolitics, Schumpeter is crucial for linking the debates about monopoly capitalism and the road to serfdom thesis. (And unlike Foucault, Friedman, in turn, treats Schumpeter as a variation on Veblen and Burnham as a variation on Schumpeter--it is really a virtuoso performance by Friedman.) Some other time I will address Friedman's criticism of Schumpeter's thesis.
The mechanism, which has some unacknowledged roots in Marx's analysis, is as follows:
the development of laisser-faire laid the groundwork for a widespread respect for the law, on the one hand, and a relatively incorrupt, honest, and efficient civil service on the other, both of which are essential preconditions for the operation of a collectivist society. In order for a collectivist society to operate, the people must obey the laws and there must be a civil service that can and will carry out the laws. The success of capitalism established these preconditions for a movement in the direction of much greater state intervention.
But then Friedman adds:
The process I have described obviously runs both ways. A movement in the direction of a collectivist society involves increased governmental intervention into the daily lives of people and the conversion into crimes of actions that are regarded by the ordinary person as entirely proper. These tend in turn to undermine respect for the law and to give incentives to corrupt state officials....the erosion of the capital stock of willingness to obey the law reduces the capacity of a society to run a centralized state, to move away from freedom. This effect on law obedience is thus one that is reversible and runs in both directions. It is another major factor that needs to be taken into account in judging the likely stability of a free system in the long run.
And this argument is directed against both Marxist necessity and the road the serfdom. Because countervailing forces are naturally developed as one goes down the road to serfdom: "Once government embarks on intervention into and regulation of private activities, this establishes an incentive for large numbers of individuals to use their ingenuity to find ways to get around the government regulations." (And this, in turn, starts to swallow up time of the more earnest government officials, etc.) Friedman recognizes his claims are speculative (much more historical work is needed), but a reader of Friedman comes away thinking that free societies are rarely stable, if one means by that, in equilibrium; that is, they are always in some kind of crisis (again this anticipates Foucault's idea that liberalism is co-constituted with crisis); but these crises of a free society have, on the whole also a self-correcting quality over the medium term.
It's easy to mock Friedman's position as I have reconstructed it as a kind of providential optimism. But perhaps such providentialism is required within political life; the great danger of it is that encourages complacency about the possibility of a crisis that fatally undermines a free society.
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