Digressions&Impressions

On Ivor Jennings, Hayek, A Federation for Western Europe

It is a great pity that the flood of federalist publications which in recent years has descended upon us has deprived the few important and thoughtful works among them of the attention they deserved. One which in particular ought to be carefully consulted when the time comes for the framing of a new political structure of Europe is Dr. W Ivor Jennings's small book on A Federation for Western Europe (1940).--Hayek (1944 [2001] The Road to Serfdom, p. 239.

Despite Hayek's signal boost Jennings's small book has languished in relative obscurity. This despite the fact that scholars are aware that Jennings (1903 -1965) was a member of the Federal Union Research Institute which included Beveridge, Brailsford, Hayek, Jennings, Robbins, Wilson and Wootton, who worked together on proposals for a European union after the war.* Jennings himself was a constitutional lawyer, and educational administrator (also in the colonies).

Hayek's interest in the book has also not received much attention despite the huge interest in Hayek's ideas on European federalism during the last decade. This is prima facie surprising because as Edwin van der Haar (2009) notes, "it is somewhat puzzling that Hayek also recommended the ideas of the socialist Ivor Jennings." (Classical Liberalism and International Relations Theory: Hume, Smith, Mises, and Hayek, p. 108) It is not obvious Jennings is a socialist when you read Jennings' A Federation, and Van der Haar does not provide any evidence for the claim.

However we can state Van der Haar's puzzle in a modestly revised form. In the proposal, Jennings claims that "the constitutional scheme in this book is not suggested as a mans for protecting capitalism or hindering socialism. Nor, on the other hand, it is suggested as a means for attaining socialism." (A Federation Cambridge University Press [1940 (2016)], p. 122). (In my view Jennings here echoes Lionel Robbins' approach to European federalism; and Robbins was not a socialist.) So, the fact that it does not decisively block socialism may well be raise questions about Hayek's endorsement. For, Hayek's account of European federalism is almost uniformly presented as a means to prevent socialism.**

In addition, Jennings foresees the "extension of trade unionism" in the federation. (P. 130) And he echoes Lippmann in claiming that the age of "strict laissez faire" has "long passed." (p. 131) He believe that the choice for or against socialism should be left to democracy because a "constitution which does not enable the people to try experiments which it wants to try is a faulty instrument." (p. 132) It it is worth noting that Hayek himself is explicitly seeing federalism in democratic terms (again, in general commentators tend to notice Hayek's skepticism about democracy, although I think that because of his association with Pinochet this is not wholly unfair). Here's what he says in the passage surrounding the note to Jennings (I left the footnote mark in):

The form of international government under which certain strictly defined powers are transferred to an international authority, while in all other respects the individual countries remain responsible for their internal affairs, is, of course, that of federation. We must not allow the numerous ill-considered and often extremely silly claims made on behalf of a federal organisation of the whole world during the height of the propaganda for "Federal Union" to obscure the fact that the principle of federation is the only form of association of different peoples which will create an international order without putting an undue strain on their legitimate desire for independence.1 Federalism is, of course, nothing but the application to international affairs of democracy, the only method of peaceful change man has yet invented. But it is a democracy with definitely limited powers.--Hayek (1944 [2001] The Road to Serfdom, p. 239.

I think it's little remarked that Hayek identifies federalism with democracy, and that he stresses it's peaceful nature. This echoes Jennings because for Jennings it is a sine qua non that the members of the federation are democratic and that its institutions are democratic (pp. 17 & 94-100).

Democratic critics of Hayek unsurprisingly seize on the equally clear emphasis of limiting the powers of democracy. Although I think in particular context it is clear that by the limitation on democracy Hayek does not mean a rejection of one-man-one-vote (although he is not especially perturbed by the lack of vote for women as, say, Mill and Hobhouse were), but rather rejection of popular sovereignty such that it could override the principle based rule of law/Rechtstaat that Hayek promotes. As Foucault notes, the rule of law and collective planning, which allows a high degree of arbitrary government control, are explicit antonyms in Hayek (and defined in light of each other in The Road to Serfdom). I return to this below.

Now, Jennings is eager to leave the federal states as much leeway as possible to pursue their own policies (this also echoes Robbins). But he also seems to think, if I understand him correctly, that the kind of judicial extension of a commerce clause familiar from the US where nearly everything comes under federal purview is eventually unavoidable in Europe, too(p. 141). 

I don't mean to suggest there is nothing to like for Hayek in Jennings' proposal. For it is by no means easy to bring about a socialist revolution in the multi-layered democracy Jennings foresees. For, Jennings clearly envisions a transition to free trade in about ten years (p. 119). And he is very much thinking about this along the functional lines set out by Cobden (and (recall) anticipated in Molesworth), that is, the "generalisation of "most favored-nation" clause...common in commercial treaties." (p. 117). And Jennings is very alert to the fact that there are many means for concealed protection by states, and he provides the federal entity with powers to prevent it (pp. 126-128), including a road map to stable currencies and a common currency (pp. 127-128).

But Jennings' vision of federal free trade is constrained by the need to regulate, "health, morals [!], safety, and general welfare of the citizens." (p. 120)+ Jennings calls these constraints the 'police power' a term he claims then used Stateside. (Readers of Foucault and Adam Smith are familiar with this terminology, which is not uncommon in the eighteenth and nineteenth century, especially before the rise of professional police forces.) I suspect Jennings is here also alluding to the US tenth amendment, but in a substantive (and not pro forma) way.

Before I wrap up, I should explicitly note that Jennings is not committed to a slow functional integration of Europe. Rather, Jennings' vision of federalism is organized around the need to avoid future wars in Europe and caused by European rivalry: "not only should we prevent wars in Europe, but also we should prevent European rivalry from leading to wars elsewhere." (p.6; see also p. 104 where the central importance is reiterated.) And so the lynchpin of Jennings' proposal is a willingness of European states to give up independent armies and even local police forces to the Federation (pp. 101-104).++

Above I emphasized Jennings' commitment to democracy. But as he notes with disarming frankness, "necessarily a federation is a "lawyer's paradise". Disputes arise not only under the law about the law." (92) And while Jennings' builds in many precautions to avoid what we would judicial activism or the politicization of constitutional jurisprudence and judge selection, he also recognizes that this cannot be prevented altogether in a federal structure. As he puts it, "Rule or government by law cannot be placed on a firm foundation unless all disputes are determined by judicial decisions." (144 [emphasis added]) And so, in his plan, the democratic institutions are protected and shaped by a relative restrained jurisprudence that (with the exception of preserving democratic institutions) focuses primarily not on outcomes but on legal form. And so Hayek's fondness for Jennings anticipates (see chapters 3-4 of Quinn Slobodian's Globalists) the ordoliberal ideals for international law.

 

 

 

On Foucault and the Anxiety of the Left; pt.1: 'Economic Liberalism'

What both Foucault's critics and his defenders have failed to consider is a deep affinity between Foucault's thought and neoliberalism: a shared suspicion of the state. Foucault's antistatism was, in the first instance, theoretical. He famously complained that “in political thought and analysis, the king's head has still not been cut off.” What he meant was that political theorists too often understand power on the model of the state, viewing it as flowing top-down from a transcendent authority, rather than as a force disseminated across the social space through complex and open-ended relations, involving a wide range of actors and institutions. This position was a logical consequence of Foucault's antihumanism: the main fallacy of state-based models of politics is that they anthropomorphize power by viewing it as the conscious expression of a will. The theoretical antistatism implicit in Foucault's thought required, however, a specific configuration of circumstances to be actualized. In the 1970s, however, Foucault's theoretical antistatism became increasingly normative: his claim that we should abandon the state as our model for understanding power evolved, in other words, into an argument that the state should cease to be the primary focus of engaging in politics. The context in which this shift occurred is both significant and underappreciated. The economic crisis that struck France in 1973, accompanied by the implosion of the statist assumptions that had driven the country's remarkable postwar growth, suddenly made economic liberalism far more relevant to public discourse than it had been for decades. Spurred by these events, Foucault seems to have recognized the affinity between his theoretical objection to state-based conceptions of power and the economic liberalism that was the subject of contemporary debates. The onset of prolonged economic malaise in the early 1970s, I argue, proves to be as critical a factor in the intellectual transformations of the 1970s as antitotalitarianism or the so-called “death of Marx.”

Thus Foucault did indeed have a liberal moment – but it was inspired not by the political liberalism of Benjamin Constant, Alexis de Tocqueville, or François Guizot, whom other intellectuals were busily dusting off at the time, but by economic liberals like Adam Smith, Wilhelm Röpke, and the Chicago School. In his 1978 and 1979 lectures, the antistatism latent in Foucault's theory of power was nurtured by the resurgence of neoliberal ideas that the 1973 economic crisis precipitated. In this climate, Foucault found economic liberalism to be intellectually appealing for two crucial reasons. First, at a juncture when he, like a number of his contemporaries, was attempting to free French intellectual life from the headlock of revolutionary leftism (or gauchisme), economic liberalism proved to be a potent theoretical weapon for bludgeoning the Left's authoritarian proclivities. Second, Foucault could endorse economic liberalism because, unlike its political counterpart, it did not require him to embrace philosophical humanism – the outlook that Foucault had, from the outset of his career, contested with all the energy that his intellectual skills could muster. The theoretical condition of possibility of Foucault's neoliberal moment was his insight that economic liberalism is, essentially, a liberalism without humanism. The limitation of state power that defines the practice of economic liberalism does not occur, Foucault maintained, when “subjects” are recognized as having “rights.” Of such hypotheses it has no need. Rather, economic liberalism justifies itself on the basis of its greater efficiency: it is a practice that arises when power realizes that it has an interest as power in limiting power. Far from being grounds for denouncing it, this is precisely why Foucault found economic liberalism so appealing: it offered a compelling terrain upon which his practical aspiration for freedom might merge with his theoretical conviction that power is constitutive of all human relationships.--Michael C. Behrent (2016 [2014]) "Liberalism without Humanism: Michel Foucault and the Freemarket Creed, 1976-1979." in Foucault and Neoliberalism, edited b Daniel Zamora & Michael C. Behrent, pp. 29-31. [The paper was first published in 2009.]

It is fair to say that Zamora and Behrent's volume set off an anxious debate on 'the Left' on how to evaluate late Foucault's work. My interest here is not to save Foucault for 'the Left;' but I want to engage some of the more important contributions of that debate because some of its terms prevent, I think, an adequate appreciation of Foucault's position. The problems I want to call attention to are present in Behrent's essay.

But before I get to that, I want to avoid some misunderstanding. I like, even admire Behrent's attempt to situate Foucault's thought in political and activist developments of the 1970s in France and its political economy (including stagflation, and debates over the electoral alliance between communists and socialists). So, if you are  not familiar with his paper, do read it!

In addition, in the passage quoted above, Behrent notes an important oddity in Foucault's treatment of liberalism in the Birth of Biopolitics; Foucault seems to skip the French, nineteenth century liberal tradition, including its leading lights, Constant, Tocqueville, and Guizot. (We know that Foucault was quite familiar with Tocqueville, especially.) This apparent omission matters because it entails that Foucault's treatment of the 'radical' tradition --  utilitarianism -- is biased toward Bentham and Robbins (and later Becker), and away from J.S. Mill (who was shaped by Tocqueville and Constant, especially) and who is never mentioned in the Birth of Biopolitics (nor is Sidgwick). 

Unfortunately, Behrent ends up misunderstanding the significance of this because he treats the omission as instantiating a distinction between political and economic liberalism with political liberalism committed to (philosophical) humanism and economic liberalism not. To be sure, I don't mean to deny that Foucault's engagement with liberalism exhibits anti-humanist tendencies, but Behrent's presentation ends up conflating a number of issues. 

First, the distinction between political and economic liberalism is Behrent's not Foucault's. Unfortunately, it is orthogonal to Foucault's own distinction between (recall 17 January 1979, lecture 2  The Birth of Biopolitics. p. 42) (i) an "axiomatic, juridico-deductive approach" which starts from law (and which Foucault associates with Rousseau). That is a republican-contractual approach. and (ii) "The other approach does not start from law but from governmental practice itself...and tries to analyze it in terms of the de facto limits that can be set to this governmentality." This (ii) Foucault associates with English radicalism, that is utilitarianism. And according to Foucault (i) and (ii) are two traditions of conceptualizing freedom in liberalism. That is to say, while Constant is not mentioned Foucault is actually engaged in a polemic with him.

I have quoted Foucault to make clear that in Foucault's hands (ii) is also a political form of liberalism (it's focused on governmental practice, after all). Moreover, as Behrent belatedly recognizes, it is kind of odd to slot Röpke, and Ordoliberalism generally, into a non-political or economic liberalism. And so Behrent introduces a further ad hoc claim (about the status of law in liberal thought) that ends up undermining his own distinction between political and economic liberalism:  

the Ordoliberals were not, however, crude free-marketeers. Their beliefs boil down to a single crucial insight: everything that neoclassical economics says about the free market's virtues is true; the problem, however, is that competition is a quasi-mathematical ideal, not an empirical reality. For competition to work its magic, it must first be jump-started by the state. Specifically, the state needs a robust legal framework, one that allows marketplace competition to approximate its ideal form (though like the utilitarians, it should be noted, the Ordoliberals conceived of law as a political tool, not as the state's metaphysical foundation). What seems to have intrigued Foucault about Ordoliberalism is that it confirmed his intuition that economic liberalism should be thought of as a political and not merely an economic system. Behrent "Liberalism without Humanism," p. 49

To save his distinction between economic and political liberalism, Behrent introduces a further distinction between those that treat the law "as the state's metaphysical foundation" (that is, "political liberals") and those that treat it merely as a political tool (that is, "economic liberals").

Unfortunately, we're now slipping furth away Foucault's own understanding. For, first, Foucault doesn't treat "axiomatic, juridico-deductive approach" as treating the law as a metaphysical foundation for the state--he actually thinks that in so far as law is derived from anything, it's revolutionary violence (or war). But let's stipulate for the sake of argument that Behrent is correct about this.

More important for present purposes, second, it it is quite clear that Foucault treats the "axiomatic, juridico-deductive approach" as leading into Kantianism and he understands Ordoliberalism (plausibly) as itself explicitly a species of Kantianism, but one shaped by the influence of phenomenology (recall especially lecture 5). For, in fact, when Foucault treats of ordoliberalism, they are represented as recognizing explicitly (recall my treatment of lecture 4, 31 January 1979, The Birth of Biopolitics)  that "a state which violates the basic freedoms, the essential rights of citizens, is no longer representative of its citizens." That is to say, the ordoliberals constitute the state in terms of its capacity and willingness to respect citizens' rights. (It is no surprise that James Buchanan, who is a contractualist, admired the Ordoliberals.) So, while Behrent is right to claim that the law is also a tool for Ordoliberals (in particular a means to help battle the effects of concentrated power), Behrent's distinction between economic and political liberalism mischaracterizes them (as an interpretation of Foucault and of their self-understanding). 

As an aside, Behrent's distinctions make a total hash of Röpke's political philosophy. For, Röpke himself is a big fan of Tocqueville (their mutual overlap can be characterized as a kind of 'aristocratic liberalism'). And while Foucault doesn't mention it, it would have been odd if he had missed it.

Now, above I noted that I am open to Behrent's idea that Foucault's attraction to neoliberalism, if it is one, might be found in a kind of shared anti-humanism. The problem with Behrent's way of articulating this insight is that Foucault is quite clear that the Ordos are humanists (this is actually evident from the titles of Röpke's books alone: Civitas Humana; Mass und Mitte; Humane Economy.) Crucially, Foucault explicitly treats and recognizes the Vitalpolitik and Gesellschaftspolitik  of Ordoliberalism as enmeshed in humanism, I quote (recall) lecture 10 (21 March, 1979) of The Birth of Biopolitics: for the Ordos, "The individual’s life must be lodged, not within a framework of a big enterprise like the firm or, if it comes to it, the state, but within the framework of a multiplicity of diverse enterprises connected up to and entangled with each other, enterprises which are in some way ready to hand for the individual, sufficiently limited in their scale for the individual’s actions, decisions, and choices to have meaningful and perceptible effects, and numerous enough for him not to be dependent on one alone." (p. 241, emphasis added; there is an echo of Heidegger here, but without his anti-humanism!)

As an important aside, while Foucault clearly admires Ordoliberalism, Behrent misses that Foucault treats the French uptake of their ideas as a "radicalization" (lecture 8, p. 207; in context Foucault is discussing Giscard and Barre). And so Behrent misses, I think, how Foucault is criticizing how Giscard and Barre have applied ordoliberal (and Austrian) ideas in France. But about that another time more.

Now, as I have noted before, inscribed in the Birth of Biopolitics, is a natural history of the changing conceptions of homo oeconomicus: (i) in the Smithian period he is the man of exchange (224) or with explicit reference to Hume (as an exemplar of English empiricism) "the subject of interest" (273); in the (ii) classical period starting with Ricardo he is man the consumer in terms of satisfaction/pursuit of needs (p. 225);+ (iii) in the neoliberal period, especially in the (recall) ORDO senses, "he is the man of enterprise and production." (147, lecture 6). And (iv) at Chicago he is also "an entrepreneur," but now, especially, "an entrepreneur of himself," who develops and produces/maintains his own human capital as a source of earnings (226), even a possible earning stream into the future (230), and (crucially for present purposes) "reacts to reality in a nonrandom way." (p. 269, 28 March 1979).* 

Now, of these only Becker (iv), perhaps, may be slotted into a kind of philosophical antihumanism in Foucault's hands (recall this post). (I return to that some time.) But in so far as there is a tradition of economic liberalism as constructed by Behrent, it is not constituted by philosophical antihumanism in Foucault's presentation (or, I would add, in 'reality'). And so this means that in so far as we're trying to explain Foucault's attraction, if any, to neoliberalism something has gone off the rails. And this is, I have argued, because Behrent mistakenly treats "economic liberalism" as a kind term that somehow combines Smith, Röpke, and Becker whereas Foucault does not. It doesn't follow from this, of course, that 'the Left's anxiety' about Foucault's seeming attraction to neoliberalism is itself mistaken. To be continued.

28 March 1979: Foucault on Locke's World Historical Conceptual Shift (XXXVII)

To simplify things, and somewhat arbitrarily, I will start, as from a given, with English empiricism and the theory of the subject which is in fact put to work in English empiricist philosophy, with the view that—once again, I am making a somewhat arbitrary division—the theory of the subject in English empiricism probably represents one of the most important mutations, one of the most important theoretical transformations in Western thought since the Middle Ages.

What English empiricism introduces—let’s say, roughly, with Locke—and doubtless for the first time in Western philosophy, is a subject who is not so much defined by his freedom, or by the opposition of soul and body, or by the presence of a source or core of concupiscence marked to a greater or lesser degree by the Fall or sin, but who appears in the form of a subject of individual choices which are both irreducible and non-transferable. What do I mean by irreducible? I will take Hume’s very simple and frequently cited passage, which says: What type of question is it, and what irreducible element can you arrive at when you analyze an individual’s choices and ask why he did one thing rather than another? Well, he says: “You ask someone, ‘Why do you exercise?’ He will reply, ‘I exercise because I desire health.’ You go on to ask him, ‘Why do you desire health?’ He will reply, ‘Because I prefer health to illness.’ Then you go on to ask him, ‘Why do you prefer health to illness?’ He will reply, ‘Because illness is painful and so I don’t want to fall ill.’ And if you ask him why is illness painful, then at that point he will have the right not to answer, because the question has no meaning.” The painful or non-painful nature of the thing is in itself a reason for the choice beyond which you cannot go. The choice between painful and non-painful is a sort of irreducible that does not refer to any judgment, reasoning, or calculation. It is a sort of regressive end point in the analysis.
   Second, this type of choice is non-transferable. I do not mean that it is non-transferable in the sense that one choice could not be replaced by another. You could perfectly well say that if you prefer health to illness, you may also prefer illness to health, and then choose illness. It is also clear that you may perfectly well say: I prefer to be ill and that someone else is not. But, in any case, on what basis will this substitution of one choice for another be made? It will be made on the basis of my own preference and on the basis of the fact that I would find someone else being ill more painful, for example, than being ill myself. In the end the principle of my choice really will be my own feeling of painful or not painful, of pain and pleasure. There is Hume’s famous aphorism which says: If I am given the choice between cutting my little finger and the death of someone else, even if I am forced to cut my little finger, nothing can force me to think that cutting my little finger is preferable to the death of someone else.
    So, these are irreducible choices which are non-transferable in relation to the subject. This principle of an irreducible, non-transferable, atomistic individual choice which is unconditionally referred to the subject himself is what is called interest.

    What I think is fundamental in English empiricist philosophy—which I am treating completely superficially—is that it reveals something which absolutely did not exist before. This is the idea of a subject of interest, by which I mean a subject as the source of interest, the starting point of an interest, or the site of a mechanism of interests. For sure, there is a series of discussions on the mechanism of interest itself and what may activate it: is it self-preservation, is it the body or the soul, or is it sympathy? But this is not what is important. What is important is the appearance of interest for the first time as a form of both immediately and absolutely subjective will.--Michel Foucault, 28 March, 1979,  translated by Graham Burchell, Lecture 11, The Birth of Biopolitics, 271-273 

Because most of lecture 11 is a brilliant analysis of the history of criminology and the (sometimes overlapping) significance of Gary Becker's redefinition of homo oeconomicus, it is easy to miss how Foucault embeds his analysis in a narrative in which the least genius of the tradition, Locke, is a world-historical -- "one of the most important mutations, one of the most important theoretical transformations in Western thought since the Middle Ages"* -- figure (in Nietzsche's sense). In my last post (episode 36), I had already observed that lecture 11 is tied by Foucault to the start of the lecture series and Locke's conception of the liberal art of government.   

As an aside, it is striking how conventional Foucault's philosophical categories (e.g., 'Western thought;' 'British Empiricism;' 'Middle Ages' etc.") can be sometimes. But as we know, artistic genius in this convention is characterized by the virtuosity of playing with the given constraints. And as Foucault teaches in this very lecture (recall), that fits the definition of rational agency.

The way I understand Foucault's conceptual analysis of the empiricist agent, the subject of interest, is that he reveals the thin conceptual pre-conditions that ground the nature of homo oeconomicus that figure into the importantly different definitions of economics (say offered by Robbins ("the optimal allocation of scarce resources to alternative ends") and Becker (the "science of the systematic nature of responses to environmental variables")). Recall that inscribed in the Birth of Biopolitics, is a natural history of the changing conceptions of homo oeconomicus: (i) in the Smithian period he is the man of exchange (224); in the (ii) classical period starting with Ricardo he is man the consumer in terms of satisfaction/pursuit of needs (p. 225);+ (iii) in the neoliberal period, especially in the (recall) ORDO senses, "he is the man of enterprise and production." (147, lecture 6). And (iv) at Chicago he is also "an entrepreneur," but now, especially, "an entrepreneur of himself," who develops and produces/maintains his own human capital as a source of earnings (226), even a possible earning stream into the future (230). 

And what Foucault notices is that this agent has properties that in so far as there is agency at all, cannot conceptually be reduced to other properties (that's the irreducible element and that cannot be exchanged (or traded)--that's the non-transferable property. Now, I want to pause at this second feature. 

For, to be a subject with interest, one that at the start of liberalism is capable of trading commodities with others (and to be held accountable, etc.), requires that one is constituted by (I use Hume's phrase) elements that themselves are irreducible and that cannot be traded. (This raises interesting questions on the natural limits of economics as a totalizing science.) And so the liberal tradition is founded by a conceptual distinction between entities that can be traded (by subjects of interest) and entities that compose/constitute agents and (at least when they are doing such grounding) cannot be traded as such.* And this conceptual bifurcation between these two kinds of entities survives through the other transformations of the natural history of homo oeconomicus. What does happen is that the manner in which the subject capable of interest is conceptualized shifts. The agents of the contemporary prisoner dilemma or in an agent-based simulation do not need to have Humean impressions and ideas, etc. But they do have these two features that ground their irreducible interest.

As an aside, perhaps far from Foucault's thought, the Lockean/Humean subject of interest with its irreducible elements is a monster from the perspective of (principle of) sufficient explanation. Because in them explanation bottoms out without a proper ground. As Michael Della Rocca has shown, Hume was clearly aware of  this feature of his own theory. What this tells us is that well before the arbitrary initial conditions of natural science were treated as a standing problem for adherence to sufficient reason, the (liberal) subject with an interest was so.

Let me close with a critical observation. It is somewhat unfortunate that Foucault treats the subject of interest as 'atomistic individual.' Even leaving aside the conventional categories he is playing with, and Hume's "famous aphorism," it is kind of natural for him to use this terminology because it seems that the two elements that help constitute a subject of interest are, like Robinson Crusoe, isolatable (in modelling terms) from other subjects of interest. So, there is a sense in which what he says is unobjectionable. And, to be sure, in so far he is thinking, as he is, of Becker (and we would include the effective altruists) for whom the welfare of others (especially in the family) can contribute greatly to our individual utility, he is not unfair. 

But as is made transparent by Adam Smith, building on Hume's philosophy, our (social) feelings, even without "judgment, reasoning, or calculation" incorporate irreducibly and inescapably the (imagined or inherited) judgments or perspectives of others (in my book I call these "social feelings" or "derived passions").** That is, others are an in-eliminable part of, and help constitute, our identity. As we know (recall) J.S. Mill made this, perhaps somewhat too greedily (and without sufficient clarity), a firm foundation of his version of utilitarianism. To be sure this Smith-Mill tradition (revived by the humaneconomics of Vernon Smith and his students) is distinct from the Becker tradition. So, there is another sense in which Foucault reinforces a misleading trope about the possibilities of liberalism. It is unusual for him to do so. And it is worth keeping in mind as we explore Foucault's final arguments.

 

14 March 1979: Foucault on the Neo-Liberal Criticism of Ricardo and Marx (XXIX)

[T]he American neo-liberals say this: It is strange that classical political economy has always solemnly declared that the production of goods depends on three factors—land, capital, and labor—while leaving the third unexplored. It has remained, in a way, a blank sheet on which the economists have written nothing. Of course, we can say that Adam Smith’s economics does begin with a reflection on labor, inasmuch as for Smith the division of labor and its specification is the key which enabled him to construct his economic analysis. But apart from this sort of first step, this first opening, and since that moment, classical political economy has never analyzed labor itself, or rather it has constantly striven to neutralize it, and to do this by reducing it exclusively to the factor of time. This is what Ricardo did when, wishing to analyze the nature of the increase of labor, the labor factor, he only ever defined this increase in a quantitative way according to the temporal variable. That is to say, he thought that the increase or change of labor, the growth of the labor factor, could be nothing other than the presence of an additional number of workers on the market, that is to say, the possibility of employing more hours of labor thus made available to capital. Consequently there is a neutralization of the nature itself of labor, to the advantage of this single quantitative variable of hours of work and time, and basically classical economics never got out of this Ricardian reduction of the problem of labor to the simple analysis of the quantitative variable of time. And then we find an analysis, or rather non-analysis of labor in Keynes which is not so different or any more developed than Ricardo’s analysis. What is labor according to Keynes? It is a factor of production, a productive factor, but which in itself is passive and only finds employment, activity, and actuality thanks to a certain rate of investment, and on condition clearly that this is sufficiently high. Starting from this criticism of classical economics and its analysis of labor, the problem for the neo-liberals is basically that of trying to introduce labor into the field of economic analysis. A number of them attempted this, the first being Theodore Schultz, who published a number of articles in the years 1950–1960 the result of which was a book published in 1971 with the title Investment in Human Capital. More or less at the same time, Gary Becker published a book with the same title, and then there is a third text by Mincer, which is quite fundamental and more concrete and precise than the others, on the school and wages, which appeared in 1975.
In truth, the charge made by neo-liberalism that classical economics forgets labor and has never subjected it to economic analysis may seem strange when we think that, even if it is true that Ricardo entirely reduced the analysis of labor to the analysis of the quantitative variable of time, on the other hand there was someone called Marx who ... and so on. Fine. The neo-liberals practically never argue with Marx for reasons that we may think are to do with economic snobbery, it’s not important. But if they took the trouble to argue with Marx I think it is quite easy to see what they could say [about] his analysis. They would say: It is quite true that Marx makes labor the linchpin, one of the essential linchpins, of his analysis. But what does he do when he analyzes labor? What is it that he shows the worker sells? Not his labor, but his labor power. He sells his labor power for a certain time against a wage established on the basis of a given situation of the market corresponding to the balance between the supply and demand of labor power. And the work performed by the worker is work that creates a value, part of which is extorted from him. Marx clearly sees in this process the very mechanics or logic of capitalism. And in what does this logic consist? Well, it consists in the fact that the labor in all this is “abstract,” that is to say, the concrete labor transformed into labor power, measured by time, put on the market and paid by wages, is not concrete labor; it is labor that has been cut off from its human reality, from all its qualitative variables, and precisely—this is indeed, in fact, what Marx shows—the logic of capital reduces labor to labor power and time. It makes it a commodity and reduces it to the effects of value produced. Now, say the neo-liberals—and this is precisely where their criticism departs from the criticism made by Marx—what is responsible for this “abstraction.” For Marx, capitalism itself is responsible; it is the fault of the logic of capital and of its historical reality. Whereas the neo-liberals say: The abstraction of labor, which actually only appears through the variable of time, is not the product of real capitalism, [but] of the economic theory that has been constructed of capitalist production. Abstraction is not the result of the real mechanics of economic processes; it derives from the way in which these processes have been reflected in classical economics. And it is precisely because classical economics was not able to take on this analysis of labor in its concrete specification and qualitative modulations, it is because it left this blank page, gap or vacuum in its theory, that a whole philosophy, anthropology, and politics, of which Marx is precisely the representative, rushed in. Consequently, we should not continue with this, in a way, realist criticism made by Marx, accusing real capitalism of having made real labor abstract; we should undertake a theoretical criticism of the way in which labor itself became abstract in economic discourse. And, the neoliberals say, if economists see labor in such an abstract way, if they fail to grasp its specification, its qualitative modulations, and the economic effects of these modulations, it is basically because classical economists only ever envisaged the object of economics as processes of capital, of investment, of the machine, of the product, and so on. Michel Foucault, 14 March, 1979,  translated by Graham Burchell, Lecture 9, The Birth of Biopolitics, 219-222. [emphasis added)

For readers familiar with Foucault's Birth of Biopolitics, it may be thought strange I have resisted plunging into his account of the relationship between genetics, development, and human capital theory which are at the heart of Lecture 9. For what seemed like a "bit of science fiction" (227) has finally arrived and will become more salient in the aftermath of the pandemic and asymmetric response(s) to unfolding climate change. (I don't wish to avoid it, but in re-reading Foucault I am always struck by moves that seem recurrently timely.) Rather, I return to material I partially quoted and skipped last time.  Today, I focus on his rational reconstruction of a historical debate that can help us situate a lot of debates about neoliberalism.

Foucault is very clear that from the perspective of Chicago economics (the American neo-liberalism of Schultz, Becker, and Mincer), the classical economics that comes out of Ricardo is a garden path (or degenerative research program). When it comes to the implied anthropology of capitalism, and, especially the significance of human capital in it, Chicago is closer to the earlier Adam Smith in some respects than Ricardo and other classical and neo-classical economists. This is why George Stigler is often quoted as saying "it's all in Adam Smith." 

As an aside, what I have said in the previous paragraph is clearly not true of Milton Friedman who was very much inspired by Marshall. But Friedman does not figure in Focuault's analysis of Chicago at all, and, unlike Stigler, also cannot be simply assimilated to it. To the point jokingly, despite the importance of (recall) Simons to Foucault's narrative, in Foucault's hands Friedman is not a characteristic (Chicago school) neoliberal.*

But as Foucault notes (225), by building on (recall) the Robbins definition of economics (as optimization under given constraints and in light of scarcity), Chicago also re-establishes the significance of a utilitarian homo oeconomicus who maximizes utility or Max U (in McCloskeys' memorable phrase). And this echoes the Benthamite (so-called English radical) tradition (recall lecture, p. 41) that merged with classical economics in the wake of Ricardo and James Mill. That is to say, a major sub-theme of Foucault's whole lecture series on the Birth of Biopolitics is a kind of natural history of the changing conceptualizations of homo oeconomicus: (i) in the classical period starting with Ricardo he is the man of exchange or man the consumer in terms of satisfaction/pursuit of needs (p. 225); (ii) in the neoliberal period, especially in the (recall) ORDO senses, "he is the man of enterprise and production." (147, lecture 6) And (iii) at Chicago he is also "an entrepreneur," but now, especially, "an entrepreneur of himself," who develops and produces/maintains his own human capital as a source of earnings (226), even a possible earning stream into the future (230). The previous sentence simplifies in a crucial way: because as the Chicago program develops, as Foucault shows in the remainder of the lecture, it starts to be able to calculate the contribution of the family, culture, schooling, and (yes) genetics into the constitution of this auto-entrepreneur.

And so, what Chicago does, on Foucault's account, is to merge this re-invented utilitarian homo oeconomicus with a kind pre-Ricardian Smithian sensibility about human nature. And, to look ahead a bit beyond Foucault, this synthesis turns out to be both fertile and unstable as the experimental and behavioral psychologists explore the Smithian sensibility and see how at odds it is with the given utilitarian framework. (This previous sentence is most manifest in the work of Vernon Smith and his school, who understands himself as returning to the Smithian tradition.)

Now, recall that the distinct element of the ORDO response to Marxism is, in part, to say that even if the Marxists are right that monopoly is inevitable under the logic of pure capitalism, society -- and especially an independent state -- can prevent this outcome by an expansive understanding of anti-trust law whose twin aims are to prevent economic monopolies and to prevent rent-seeking behavior from would be powerful economic agents. (I am not claiming that is the whole story.) By contrast, one effect of the Chicago critique of Ricardian classical economics is, as Foucault notes, that it simultaneously can accept the Marxist critique of Ricardo/classical economics and de-fang its significance so much that it can practically ignore it.**

And the way it defangs it, on Foucault's creative account, is by way of a (implicit--since this is all Foucault's rational reconstruction) genealogy of error (this is the highlighted part above) in which the Marxist critique of capitalism is itself shaped by the classical elements, which it understands as ideology, it has inherited. And both classical economists and their marxist critics look at large scale processes that make value a kind of abstraction (even though they disagree over the source and nature of this abstraction.) And in response, the neo-liberals change the topic: and focus on "what they call
substitutable choices, that is to say, the study and analysis of the way in which scarce means are allocated to competing ends, that is to say, to alternative ends which cannot be superimposed on each other." (222) And rather than explaining (the source of) value, or thereby the exploitation of a class, the focus now becomes "how the person who works uses the means available to him." (223)

The effect of this, as I noted last week, is an important moral pay-off. In the Chicago neo-liberal approach, there is a methodological and epistemological perspective that takes the "point of view of the worker and, for the first time, ensure that the worker is not present in the economic analysis as an object—the object of supply and demand in the form of labor power—but as an active economic subject." (223) That is to, the Chicago school manages to bring its tools into line with important moral and political commitments of liberalism. 

To put the point in previous paragraph in moral and rhetorical terms. The utilitarianism of the radical tradition has a tendency to treat economic agents as means. But in the neo-liberal Chicago school economic individuals are treated as agents with their own distinctive aims. And so the scientist can take their choices seriously as choices and the moralist, society, or policy-maker can hold them accountable for their choices. That this shift in perspective also generates serious moral and political problems once policy aims to program/nudge it is evident.  But in the short term it has the rhetorical advantage that when the Marxist says 'exploitation,' and has to invoke a whole conceptual structure to explain why, the neo-liberal says 'choices' and can respectfully point at what we do. And, perhaps unexpectedly, this rhetorical move turned out to be attractive not just to the traditional economic right, but also politically to all those (but now I am echoing Melinda Cooper here; and here) who wished to emancipate from the hegemony of the 'traditional' wage-earning family structure.

 

Foucault on the Idea of Europe (and Adam Smith, Hume & Kant), Part 1

So we find this idea, which will be at the center of the economic game as defined by the liberals, that actually the enrichment of one country, like the enrichment of one individual, can only really be established and maintained in the long term by a mutual enrichment...Consequently there is a correlative, enrichment, an enrichment en bloc; a regional enrichment: either the whole of Europe will be rich, or the whole of Europe will be poor. There is no longer any cake to be divided up. We enter an age of an economic historicity governed by, if not unlimited enrichment, then at least reciprocal enrichment through the game of competition.
I think something very important begins to take shape here, the consequences of which are, as you know, far from being exhausted. What is taking shape is a new idea of Europe that is not at all the imperial and Carolingian Europe more or less inherited from the Roman Empire and referring to quite specific political structures...It is a Europe of collective enrichment; Europe as a collective subject that, whatever the competition between states, or rather through the competition between states, has to advance in the form of unlimited economic progress.
This idea of progress, of a European progress, is a fundamental theme in liberalism and completely overturns the themes of European equilibrium, even though these themes do not disappear completely. With this conception of the physiocrats and Adam Smith we leave behind a conception of the economic game as a zero sum game. But if it is no longer to be a zero sum game, then permanent and continuous inputs are still necessary. In other words, if freedom of the market must ensure the reciprocal, correlative, and more or less simultaneous enrichment of all the countries of Europe, for this to function, and for freedom of the market to thus unfold according to a game that is not a zero sum game, then it is necessary to summon around Europe, and for Europe, an increasingly extended market and even, if it comes to it, everything in the world that can be put on the market. In other words, we are invited to a globalization of the market when it is laid down as a principle, and an objective, that the enrichment of Europe must be brought about as a collective and unlimited enrichment, and not through the enrichment of some and the impoverishment of others. The unlimited character of the economic development of Europe, and the consequent existence of a non-zero sum game, entails, of course, that the whole world is summoned around Europe to exchange its own and Europe's products in the European market.
Of course, I do not mean that this is the first time that Europe thinks about the world, or thinks the world. I mean simply that this may be the first time that Europe appears as an economic unit, as an economic subject in the world, or considers the world as able to be and having to be its economic domain. It seems to me that it is the first time that Europe appears in its own eyes as having to have the world for its unlimited market. Europe is no longer merely covetous of all the world's riches that sparkle in its dreams or perceptions. Europe is now in a state of permanent and collective enrichment through its own competition, on condition that the entire world becomes its market. In short, in the time of mercantilism, raison d'Etat, and the police state, etcetera, the calculation of a European balance enabled one to block the consequences of an economic game conceived as being over. Now the opening up of a world market allows one to continue the economic game and consequently to avoid the conflicts which derive from a finite market. But this opening of the economic game onto the world dearly implies a difference of both kind and status between Europe and the rest of the world. That is to say, there will be Europe on one side, with Europeans as the players, and then the world on the other, which will he the stake. The game is in Europe, but the stake is the world.
It seems to me that we have in this one of the fundamental features of this new art of government that is indexed to the problem of the market and market veridiction. Obviously, this organization, or at any rate this reflection on the reciprocal positions of Europe and the world, is not the start of colonization. Colonization had long been underway. Nor do I think this is the start of imperialism in the modem or contemporary sense of the term, for we probably see the formation of this new imperialism later in the nineteenth century. But let's say that we have the start of a new type of global calculation in European governmental practice. I think there are many signs of this appearance of a new form of global rationality, of a new calculation on the scale of the world.--Michel Foucault, 24 January 1979, The Birth of Biopolitics. 54-6

Foucault correctly discern the significance of Kant's Perpetual Peace to Ordoliberal thought (recall here; here; here). (He mentions Kant's essay on the following page, and he begins to develops his idea about the Ordos in the subsequent lecture on 31 January.) While it is not surprising Addison is ignored, it is a bit surprising that Hume goes unmentioned because his essays on "The Balance of Trade" and "The Jealousy of Trade" are key steps in the positions described by Foucault. In particular, "The Balance of Trade" explicitly adopts a European stance (and contrasts Europe with China, in particular [recall this post]).*

One way to put Foucault's point in Schmittian terms he does not use is that once the non-zero-sum logic of mutual gains of trade is accepted as state policy, enemies can be transformed into possible mere rivals. Rivals can be genuine competitors in one sense, but since they are playing the same game also partners of a certain sort. And this transformation entails the possibility of permanent self-limitation in foreign affairs, even a route toward confederation (or "ever closer union"). I use the language of possibility because subsequent history suggests the temptation of continental-wide conquest does not disappear altogether. 

The significance of all of this is that foreign affairs is transformed from the Hobbesian state of nature to something distinctive. Foucault emphasizes the development of a species of "global rationality" (there are shades of Hegel here) and the significance of global markets for European exports and imports. I return to this point below. But before i get to that, when regional enemies are turned into regional rivals, one is incentivized to develop and sustain regional institutions and norms that manage various features (trade, communication, international law, etc.) of the rivalry. This is the possible mechanism that underwrites (recall) Smith's idea of a transatlantic empire and Kant's idea of regional con-federation.

One effect is that the world is divided between peoples (rivals) with which one has shared interests and peoples who remain possible enemies. This way of putting it makes sense of Foucault's idea that the development of liberalism generated a European subject, who viewed part of the world as ripe for, if not, colonialism and  imperialism, then at least continued mercantilism. That is, on this view, intra-European liberalism strengthened the system of global mercantilism. Foucault can grant, and even argues this, that liberalism understood itself as a limitation and correction of mercantilism (and the mercantile police state in particular). But this self-understanding, while partially correct, occludes the fact that the embrace of domestic and regional liberalism sustains a system of global mercantilism.

The benefit of this analysis is that it can explain why mercantile forces made such a powerful comeback after 1870 (as neoliberals lament and their critics acknowledge). For rather than being defeated by the victory of 19th century liberalism, its position had de facto been improved. 

Now, against Kant and Smith, Foucault comes close to implying that the non-zero sum intra-European relationships presuppose a zero-sum extra-European relationship that extracts wealth from would be enemies (in what we may call the Global South). On this view a zone of open-ended progress requires the domination of the backward, even if the shape of this domination is product of contingent features. 

It is important to register that while this is certainly not implausible (given subsequent history) this is not the necessary liberal self-understanding. Smith is quite explicit that non-zero-sum relations are possible with peoples everywhere and, as is well known, he is very critical of the mercantile spirit of war that has occasioned the "savage injustice" of non-Europeans. For both Smith and Kant, progress toward a global organization that creates non-zero-sum logic can accompany open-ended economic progress. Whether the self-conception is correct or is ideological delusion or sensible regulative ideal is, in part, an empirical question. 

I am about to wrap up. But note that there is a further implication of the division of states into European rivals and non-European possible enemies. The possible enemies are all, in principle, geographically distant. And so the grounds of enmity much fewer than among the formerly local enemies. This fact was obscured by the existence of European imperialism/colonialism itself the consequence of (a) capacity to project power globally; (b) the relative military weakness of most non-Europeans; (c) and the development or ethnic/racialist/cultural ideologies of European superiority. With global shifts of balance of power against Europe, (a-c) are de facto being undermined. So, this makes possible a form of European subject that does not thereby indirectly support global mercantilism. So, Europe's current relative weakening may, in fact, be good news for European liberalism understood as a global aspiration. If that's right, this may be the first grounds for optimism about a possible third wave of liberalism, if we can generate it.

Okay, that's it for today. Somewhat surprisingly, when later in the lecture series, Foucault turns to the Ordos and the Chicago school, Foucault does not really return to theme of European subjectivity, nor global rationality. But in a follow up post, I will try to rationally reconstruct it and address the question whether neo-liberalism generates imperial mechanisms.

 

Hayek (Streeck, Hazony) and World Federation and Colonialism

In the national state current ideologies make it comparatively easy to persuade the rest of the community that it is in their interest to protect “their” iron industry or “their” wheat production or whatever it be. An element of national pride in “their” industry and considerations of national strength in case of war generally induce people to consent to the sacrifice. The decisive consideration is that their sacrifice benefits compatriots whose position is familiar to them. Will the same motives operate in favor of other members of the Union? Is it likely that the French peasant will be willing to pay more for his fertilizer to help the British chemical industry? Will the Swedish workman be ready to pay more for his oranges to assist the Californian grower? Or the clerk in the city of London be ready to pay more for his shoes or his bicycle to help American or Belgian workmen? Or the South African miner prepared to pay more for his sardines to help the Norwegian fishermen?--Hayek (1939) "The Economic Conditions of Interstate Federalism."

Hayek's (1939) "The Economic Conditions of Interstate Federalism" plays two roles in recent critical discussions of  neo-liberalism. First, Wolfgang Streeck (recall) sees in it the neoliberal masterplan for the European Union by which a federal structures prevent the development of socialism and the welfare-state among member units (of the federation). Streeck's reading of Hayek is not wholly misleading.  Hayek does state that "it would be desirable for the constitution of the federation to impose on the freedom of the individual states would have to be even greater than we have hitherto assumed and that their power of independent action would have to be limited still further." And this is not limited "to state economic policy but also to economic policy conducted by trade and professional organizations extending over the territory of the state."

But even so the justification of this is not to prevent the welfare state or local experimentation, but "to prevent evasions of the fundamental provisions securing free movement of men, goods, and capital." Hayek's real targets are "trade-unions, cartels, or professional associations," and other would be local monopolists. That is to say, Hayek is no Lionel Robbins (his LSE colleague), who in his (1941) "Economic aspects of federation" proposal did leave more room for local "experimentation" even socialist experimentation (albeit with various restrictions). For Robbins "the [member] states are completely free to set up collectivist undertakings."* This is surely a bridge too far for Hayek. But the target of Hayek is, as he writes shortly below, not primarily redistribution, but interference "with economic activity" and "state control." (This is not to suggest that Hayek is a fan of redistribution, but see Zwolinski's recent essay.)

The second line of interpretation is due to (recall) Yoram Hazony, who in The Virtue of Nationalism, reads Hayek (1939) as endorsing (quoting Hazony) an "international federal state without significant boundaries between nations." (See also the accompanying notes in Hazony.)** If we look at the passage quoted at the top of this post we can see what inspired Hazony. Hayek is clearly thinking of a trans-Atlantic North American (e.g., "California")-European federation; Hayek calls it a federation of "Atlantic democratic states," but one that includes Europe's dominions/colonies (e.g., South Africa).  And, indeed, when after the war plans were developed for a European (economic) Community the African colonies were very much included. (Before it become independent in 1962 Algeria was part of the EEC.)

Hayek's stance is, in part, if not inspired by the phenomenal success of Clarence Streit's (1939) Union Now, at least clearly co-extensive with it. (Streit is explicitly mentioned in Hayek's piece.) While Hayek proposes a geographically extensive federation, it is not global in character. In Hayek, this is so because he wishes to exclude the "socialist" countries like the USSR. Or to be precise, he thinks the USSR would refuse to "submit" to the rules governing his proposed "interstate federation." So, while Hazony has accurately discerned the drift of Hayek's proposal, his federation is not necessarily global in character and there is no expectation it will naturally become such a global empire. So, unlike Mises -- who often writes as if the success conditions of liberalism presuppose the establishment of global liberalism --, Hayek thinks liberalism need not entail global federation.+

But that leaves another question. As Or Rosenboim recounts, and building on Orwell, Streits'proposal while centered on the virtues of liberal democracies, clearly also is meant to secure domination of a (racialized hierarchy of) 'civilized' peoples. How does Hayek see the relationship between the federation and European colonies. Recall that while Mises hoped to secure a liberal global order, Mises thought the sooner the European imperial powers de-colonized the better. Hayek recognizes that the question is lurking behind his own proposal. Here's what he writes.

It does not come within the scope of a short article to consider in any detail the positive tasks of the liberal economic policy which a federation would have to pursue. Nor is it even possible to give here further consideration to such important problems as those of monetary or colonial policy which will, of course, continue to exist in a federation. On the last point it may, however, be added that the question which probably would be raised first, i.e., whether colonies ought to be administered by the states or by the federation, would be of comparatively minor importance. With a real open-door policy for all members of the federation, the economic advantages derived from the possession of colonies, whether the colonies were administered federally or nationally, would be approximately the same to all the members of the federation. But, in general, it would undoubtedly be preferable that their administration should be a federal and not a state matter.

What is notable is that unlike Mises, who is explicit about the unmitigated evils of colonialism, Hayek leaves his views on the matter oblique here.++ It's pretty clear, however, that he is primarily focused on the way that colonies generate interstate rivalry (and so war, protection, etc.). An interstate federation is a solution to the problem of such state rivalry over colonialism. The benefits, if any, of holding a colony now accrue to all the members of a federation.

It's possible (perhaps this is lurking behind the "in general") Hayek also thinks that the federation would treat the inhabitants of the colonies more humanely than the member states. But if so, he does not say it. And his remarks are naturally read as endorsing continued colonial rule by the federation. It is striking that roughly in the same period, Mises comes out as looking much more committed to democracy and freedom than Hayek does. 

Let me close. In his paper, Hayek writes "that nineteenth-century liberalism did not succeed more fully is due largely to its failure to develop in this direction; and the cause is mainly that, because of historical accidents, it successively joined forces first with nationalism and later with socialism, both forces being equally incompatible with its main principle." In the accompanying footnote, Hayek treats John Stuart Mill as exemplary of both (regrettable) tendencies. 

We may say, without a sense of superiority, and a considerable note of melancholy and regret, that twentieth-century liberalism did not succeed more fully is in no small matter due to its continued temptation to treat the economic interests of (Northern) Atlantic states as co-extensive with the true direction of liberalism. Even those that explictly rejected Mill's civilizational mission were often infected by this tendency.

 

On Total Humanity, The Origins of Human Rights, and Unreasonable Pluralism

[T]he totalitarian rebellion of our time is not only directed against nineteenth-century liberalism and democracy. It attacks the sum total of the tradition of the Western world, its religion, its science, its law, its State, its property, its family, its morality, and its notion of the human person. But I insist on emphasizing especially that this attack threatens a common ruin to all sorts of interests that, until now, were considered separated by irreconcilable differences [oppositions]. Today we are confronted with an extraordinary sight: theologians and scholars, believers and non-believers, Catholics, Protestants, Jews and free-thinkers, monarchists, democrats, managers and workers, in sum all the parties, all the factions, all the sects, all the interests of which the antagonisms have posed problems the two past centuries, are forced to recognize that if they do not find common ground in defense against the will of totalitarian States to dominate, they will all be ruined together.
   That should teach them that the disputes and the divisions they have had for such a long time do not derive from irreconcilable conflicts, but from their intellectual inability to discover the principles of unity that conceal their apparent disagreements. These principles of unity do exist, however, and one will be able to discover them one day: the proof of it lies in the fact that totalitarian philosophy attacks each of these diverse interests in its vital center. In the totalitarian system, there is no more room for the theologian than for the scholar, for private property than for free labor, for aristocracy than for democracy. And if all these diverse interests must today defend themselves together, it follows they must implicitly hold in common many of the things that are worth defending.
   That, I believe, is the great mission of contemporary thinkers: uncover and formulate, make explicit that which civilized men hold in common, that which men, seemingly holding such different biases and opinions, find today necessary to defend together. A great work of analysis of the old conflicts and the old confusions will be necessary so as to build a great synthesis in which all the permanent interests of civilized humanity will find their rightful place and rank. The world that we have known before the war is dying of its confusion and its incoherence. But in the agony that it goes through and has yet to go through, the civilized world can only seek and find a universal philosophy that, by its total humanity, will be able to maintain the tradition of civilization in spite of a totally inhuman enemy.
III
Some among you may deem all of that to be far removed from the immediate political questions confronting [us] in our time. I do not apologize for this, because I am profoundly convinced that this revision of human ideas, that this analysis and this synthesis that we will call the reconstruction of liberalism, is the necessary discipline, the indispensable experience in which the vital energies of the civilized world must unite in order to defend themselves against the danger that threatens them.--Walter Lippmann (1938) in "The Walter Lippmann Colloquium." The Birth of Neo-Liberalism. Edited by Reinhoudt & Audier. (2018), pp. 108-109.

It's not much of a stretch to suggest that the doctrine of 'human rights' became the unity that Lippmann sought for a post-war, reconstructed liberalism. By this I do not mean to suggest that the 1948 Declaration is itself indebted to Lippmann (about that below). Rather, what Lippmann discerned is that humanity,  total humanity, would be the glue with which anti-totalitarianism, now recast as 'inhuman' came to understand itself.

There is a two-fold (modest) irony here in that (for example) the Nazis were more than willing to treat many of their targets as sub-human/Untermenschen. Second, the conceptual and normative connections among 'humanity,' 'civilization,' and 'non-factionalism' (and even 'interests' albeit rightly understood) were forged, as Ryan Hanley shows, by David Hume in the eighteenth century. David Hume the philosopher would remain controversial for many in the 'common ground' ascribed by Lippmann.* (I think that ironic.)

While Lippmann is far more interested in articulating and reconceptualizing the nature of the rule of law (which is crucial to his argument in the book), Lippmann himself recognizes the significance of human rights in The Good Society (the book to which the 1938 colloquium is devoted [recall here; here; here; here]). While his discussion of human rights is brief, I want to note three features: first, he sees them as work in progress (that are "developed" through time). Second, for him the core feature of human rights is the right not to be treated arbitrarily by anyone else (and a concurrent duty not to treat others arbitrarily; p. 348); in particular, it is directed against "arbitrary power." Third, he thinks that human rights express underlying "moral commitments" which support what he calls the "true law" (346). In the colloquium lecture he captures this (a bit further down) with the idea that what must be protected are the "essential elements of human life."  

Of course, that to be attacked in common requires that some (reasonably interesting) principle of unity among those attacked is presupposed can reasonably be doubted. Since Rawls settled for a rather pragmatic, overlapping consensus most liberals do doubt it. Lippmann's hoped "synthesis" that would absolve all political contradictions is remarkably utopian. But what he points toward are two significant features. 

First, and I think this is a somewhat tragic tendency in (mid) twentieth century liberalism -- I have discussed the conceptual roots in scholarly fashion here -- that there must be some hunkering toward a fundamental consensus.  (Lippmann here echoes Lionel Robbins, with whom he corresponded in 1937.) That hankering was, while understandable, a technocratic mistake (that supplied Isaiah Berlin with one of his overarching themes). But in Lippmann it is expressed with a conflicting and more interesting impulse...

Second, and more important, Lippmann recognizes that from a certain vantage point ordinary, rather vehement partisan political opposites within a working (for lack of a better word) system may well share something in common against those that wish to blow up that system. The interesting point here is not when they understand that their foes are antagonists (losing to whom is painful but not disastrous) rather than "inhuman enemies" (losing to whom is a disaster). But rather the insight that the antagonists may well in an important sense be dependent on each other. (Andy Sabl [HT Jacob Levy] made the point very nicely recently in an essay on the possible future character of the ways parties in a party-system might influence each other.)**

This mutual dependence of competing antagonists is, for Lippmann, both practical -- at the level of functioning and surviving -- and spiritual. (It is no coincidence that Lippmann's language echoes Hegel at times.) For Lippmann liberalism is (recall) itself a multi-generational, open-ended spiritual project that aims to be transformative of the human condition (and this is where some of his eugenic sensibilities also enter in). While for Lippmann the content of the ideal is itself left open, it does (and this makes it partially utopian) require conditions under which war is largely banished. 

That is to say, in the moment of its possible defeat, the liberal vision grasps that for a non-totalizing liberalism to survive and thrive it may well require a political structure in which illiberal parties and commitments are present both to maintain liberalism's own vitality and then vitality of the whole. Liberalism then simultaneously comes to endorse its own fundamental commitments and a commitment to a kind of unreasonable pluralism. It is this affirmation that is forgotten in victory.

On Leaving Unpublished Papers on the Bus (Abba Lerner)

In 1932, Lerner received his bachelor's degree from the L.S.E. and published his first paper. The following year, he and a group of colleagues founded The Review of Economic Studies. Impatience with articles long in form and light in content was a prime motivation for the creation of a professional journal whose success has now extended over more than half a century. Also in the early to mid-1930s he played a leading role in organizing a London-Oxford-Cambridge Joint Seminar for younger economists in the three universities--a rare example of collaborative effort among them. By the time he completed his graduate studies in 1934, he was recognized as one of the future leaders of his profession with eight major articles to his credit, and the award of a prestigious Post Graduate Fellowship that permitted him to spend the year 1934-35 in Cambridge and in Manchester. But even more remarkable than his eight publications is a paper written in 1933 and unpublished for 17 years, stating and proving the international factor price equalization theorem. The result, re-discovered in 1948, became one of Nobel Laureate Paul A. Samuelson's most celebrated contributions to international equilibrium theory.

Lerner's first writings showed several of the main characteristics of his prolific output during a period of almost 50 years: originality and lucidity of thought, allied with an exceptional gift for exposition. They also displayed his virtuosity at using simple geometric arguments in economic analysis.--G. Debreu B. Hansen C.J. Hitch

A few days ago, I mentioned Abba Lerner (who is being discovered because of political debates over MMT) in passing, and quietly linked to the quoted obituary. Not unlike his ideological opposite, Gordon Tullock, Lerner is relatively easy to read and the (relative) simplicity of his prose hides profundity. No less an authority than Paul Samuelson (1964) pointed out that 'Papers like those of Lerner's are so packed with results that few readers have ever gleaned all their fruits" (quoted by Landes). 

When I started to write this post I intended to comment on Debreu's (to me surprising) appreciation of Lerner. But I got reminded of the great story around Lerner's unpublished seminar paper. The story is told with more detail by Landes, and I quote him first:

Samuelson's demonstration found its way to the desk of Lionel Robbins, who recalled that he had heard the same argument from a student in seminar some fifteen years earlier; and he still had a copy of that seminar paper, by Abba Lerner. At Robbins's urging, Lerner published the piece as originally written: "Factor Prices and International Trade," in Economica in 1952. The question remains, what had Lerner done with his copy of the paper during all those years?

The story, as told by Scitovsky, is that it had been lost; that Lerner had given the corrected typescript to a fellow student, who had volunteered to type it for submission to a periodical and then left it on a bus. It was never recovered, and Lerner was too busy working on other papers and perhaps too embarrassed by the circumstances to recover the text. At least that was the talk among Lerner's students in 1935, when Scitovsky was one of them.

Landes's account is worth reading not the least because he hints at the genteel British, academic antisemitism that prevented Lerner from obtaining a position. Be that as it may, Robbins was a central player in economics in the 1930s (and I have discussed him (recall) before not only because of his impact on Rawls), and LSE one of the key nodes of the profession. That he was no dummy is shown by the fact that he remembered Lerner's paper fifteen years later when he encountered Samuelson's paper. (I often don't even remember my own papers that long ago!) But it is notable that he seems to have missed its original significance (even if we can speculate that he may have been the one to nudge Lerner to submit the paper "to a periodical.") 

Of course, Robbins fastidiousness in keeping seminar papers also saved the day. As I contemplate the story of the missing paper, I was struck by the fact that the fellow student, the culprit, never gets named. I think he (she?) would make a fine character in a short story, or (recall) histories of walk-in characters in the history of science.

As regular readers know I am fascinated by ways in which purported epistemic peers can miss the significance of a central contribution to the field (recall this episode on Bennett). Samuelson offers a generous footnote to Lerner's (then still unpublished piece) in his famous article, and he clearly suggests that he recognizes its importance (calling it "masterly, definitive treatment of the question, difficulties.") Samuelson was, at the time, redefining economics. Some other time I return to these papers (which connect nicely to my reading of Adam Smith).

I close on a minor key. Landes suggests that even Lerner "himself was not always aware of what he had done." This raises the interesting question to what degree one can fail to discern the significance of one's own contribution.While, of course, it's quite possible one fails to foresee every downstream implication of one's contribution, I am, nevertheless a bit suspicious of this idea; it lets us, lesser lights (who miss stuff all the time), off the hook a bit too easily. I prefer to think Lerner was simply busy tackling the next big problem.

 

 

 

The Technocratic Conception of Politics (The Economists and Rawls redux)

By a 'technocratic conception of politics,' (recall) I mean to capture the following three features of an enduring image of politics present in (social) science: first, it is characterized by the ideal that with social knowledge and its progress, substantial political disagreement can be eliminated. Here is a very striking instance of the claim from Milton Friedman's (1976) Nobel lecture: "Many countries around the world are today experiencing socially destructive inflation, abnormally high unemployment, misuse of economic resources, and, in some cases, the suppression of human freedom not because evil men deliberately sought to achieve these results, nor because of differences in values among their citizens, but because of erroneous judgments about the consequences of government measures: errors that at least in principle are capable of being corrected by the progress of positive economic science." The context of the passage is the furor surrounding his association with the so-called 'Chicago Boys' in Chile and the assassination of his Chilean critic Orlando Letelier (recall).

In particular, second, this ideal of conflict-free politics presupposes (as is clear from the quoted passage in Friedman's Nobel lecture) considerable value-unanimity in society. So, for example, in a famous article, the Chicago-school economists, Stigler and Becker write, "one may usefully treat tastes as stable over time and similar among people;" establishing this point "is the central task of this essay." When value-unanimity is granted then ordinary welfare economics is possible as a kind of (social) engineering science (recall).

Third, the conception requires an image of science in which one of the central aims of policy scientists is to achieve consensus (or lack of disagreement). In modern economics this idea goes back at least to Sidgwick's (1887) Principles of Political Economy (recall; for some prehistory on Hume). It was a central feature of Lionel Robbins's influential methodological restatement (1932) of what economics is: "Surely, for the sake of securing what agreement we can in a world in which avoidable differences of opinion are all too common, it is worth while carefully delimiting those fields of enquiry where this kind of settlement is possible from those where it is not to be hoped for —it is worth while delimiting the neutral area of science from the more disputable area of moral and political philosophy." This image of science was made widely popular by Thomas Kuhn in Structure (1960), but via Talcott Parsons's Weberianism and others it was already well known in mid-twentieth century social science.

It is worth emphasizing that the expectation of consensus was by no means universal. Friedman's sometime co-author, Savage, insists in The Foundations of Statistics, that "we must be prepared to find reasoning inadequate to bring about complete agreement." (1954 [1972]:7; see also 3, 67ff.) But this view became a minority position (cf. Aumann).

On Keynes, Chicago Economics, and Social Engineering

"It is quite another thing to conclude that therefore ends of good policy are beyond the realm of scientific discussion. For surely the primary requisite of a working social system is a consensus on ends. The individual members of society must agree upon the major ends which that society is to seek. If any large share of the population actively disagrees with the society's ends, and in particular if it believes that the system is unfair by the group's criteria, the social system will surely disintegrate, probably with violence.

This is almost axiomatic in modern social theory…

At the level of economic policy, then, it is totally misleading to talk of ends as individual and random [as new welfare theorists do—ES]; they are fundamentally collective and organized.

If this conclusion be accepted, and accept it we must, the economist may properly exceed the narrow confines of economic analysis. He may cultivate a second discipline, the determination of the ends of his society particularly relevant to economic policy. This discipline might be called, following J.N. Keynes, applied ethics.7

7 See his Scope and Method of Political Economy (4^th edition: London 1930) especially chap. II. I did not realize how neglected this excellent book has become until, when I recently referred to it, several friends expressed surprise that I did not know Keynes's middle name was Maynard! –GJ Stigler (1943) "The New Welfare Economics" American Economics Review, 33(2): 357-8.

At the very start of his famous (1953) methodology paper, Milton Friedman calls attention to a three-fold distinction he inherits from the logician-economist, J.N. Keynes (yes, father of that more famous philosopher-economist, J.M. Keynes): "In his admirable book on The Scope and Method of Political Economy, John Neville Keynes distinguishes among "a positive science ... a body of systematized knowledge concerning what is; a normative or regulative science...[,] a body of systematized knowledge discussing criteria of what ought to be...[,]an art... [,] a system of rules for the attainment of a given end"; comments that "confusion between them is common and has been the source of many mischievous errors"; and urges the importance of "recognizing a distinct positive science of political economy."* Friedman admits that he is primarily interested in articulating the nature and methodology of positive economics, and along the way he wishes to argue that "positive economics is in principle independent of any particular ethical position or normative judgments." (By contrast, according to Friedman normative economics presupposes positive economics.) In what follows, I accept these distinctions by stipulation.

Neither Stigler nor Friedman, follow Keynes slavishly (recall this post, too). In particular, in the passage quoted at the top of this post, Stigler offers a world-historical innovation over Keynes that will have far-reaching consequences in economics and the way it understands itself as a policy science. In Keynes, "applied ethics" (that is, normative or regulative economics) is the business of philosophers not economists. And one of the main reasons it is the business of philosophers (and not economists) is that Keynes does not expect consensus over the ends of society to emerge. As he writes, "There is a further reason why a positive science of political economy should receive distinct and independent recognition. With the advance of knowledge, it may be possible to come to a general agreement in regard to what is or what may be in the economic world, sooner than any similar agreement is attainable in regard to the rules by which economics of individuals and communities should be guided. The former requires only that there as to the facts; the latter may be prevented by conflicting ideals." (50-51) So, Keynes's proposed strategy is to remove (applied) ethics as much as possible from economics so that economics can quickly hasten to become a mature (in a proto-Kuhnian sense) science.