Digressions&Impressions

Orwell, Pynchon, Spinoza, and the stability of texts and records (Pt III)

[46] We lack, not only all these things, but also and especially, a phraseology of this language. For time, the devourer, has obliterated from the memory of men almost all the idioms and manners of speaking peculiar to the Hebrew nation. Therefore, we will not always be able, as we desire, to find out, with respect to each utterance, all the meanings it can admit according to linguistic usage. Many utterances will occur whose meaning will be very obscure, indeed, completely incomprehensible, even though they are expressed in well- known terms.
[47] In addition to the fact that we cannot have a complete history of the Hebrew language, there is the very nature and constitution of this language. So many ambiguities arise from this that it is impossible to devise a method which will teach you how to find out with certainty the true meaning of all the utterances of Scripture. For besides the causes of ambiguity common to all languages there are certain others in this language from which a great many ambiguities are born....

[65] These are all the difficulties I had undertaken to recount arising from this method of interpreting Scripture according to the history available to us. I consider them so great that I don’t hesitate to say this: in a great many places either we don’t know what Scripture really means or we’re just guessing about its meaning without any certainty.-- Spinoza, Theological Political, Treatise Chapter VII, translated by E. Curley.

This is the third and final post in a series on Orwell's 1984 inspired by Thomas Pynchon's (2003) "Introduction" to it (here is pt 1; pt 2). After this week's controversy (recall), it might seem cheeky that this piece is mediated via Spinoza. But careful readers of the second in the series will not be surprised (I hope). Okay, with that in place, let me turn to Orwell.

After Winston has been tortured, he comes arrives at three slogans, the third of which is: "GOD IS POWER." Now, on the face of it, this is an odd slogan in the context of 1984. For, first it seems religion and theology are altogether outlawed in Oceania, and this in fact only the second mention of 'God' in the book. What mysticism exists is itself (recall) funneled through the creation of Newspeak. Much earlier, God had been mentioned in the context of the Party's rewriting the poems of Kipling, in which 'God' could not be eliminated as a rhyme (with 'rod'--the subject matter is serious, but the scene is hilarious). Shortly after, writing "GOD IS POWER," Winston insists he is no believer.

The slogan itself echoes one of the claims of his torturer, who says, 'We are the priests of power... God is power.' And, in fact, he goes on to claim in one of the more philosophical passages in the book.

Reality exists in the human mind, and nowhere else. Not in the individual mind, which can make mistakes, and in any case soon perishes: only in the mind of the Party, which is collective and immortal. Whatever the Party holds to be the truth, is truth. It is impossible to see reality except by looking through the eyes of the Party.

And in fact, Winston echoes this argument in the context of writing down the "GOD IS POWER" slogan. 

Now, that God is power is a feature of Spinoza's a priori demonstration of God's existence (see, especially, E1P11S). And there is, in fact, more than a kind of superficial similarity between the de-individualized Party and Spinoza's conception of eternality. I don't mean to press the analogy too far because Spinoza's idealism (yes, I know very controversial) is not of the subjective kind.  And while Spinoza's philosophy certainly risks turning the state into a new idol, he would reject many of the Party's techniques and positions. 

This may all be a bit anachronistic, but it is worth recalling that Orwell certainly thought Swift the first great critic of totalitarianism (see his essay Orwell (1946) "Politics vs. Literature — An examination of Gulliver's travels.") And in a World-War II BBC program, Orwell treats Hobbes "and other 17th century writers" as original predictors of totalitarianisms. So, the connection is not entirely far-fetched.

In particular, in the Appendix to 1984, we are told by a narrator of the distant future that in Oceania, "What was required in a Party member was an outlook similar to that of the ancient Hebrew who knew, without knowing much else, that all nations other than his own worshipped 'false gods'. And, in contrast to Pynchon, I claimed that key features of life in Oceania are modelled on a certain interpretation of the Old Testament. But this is also a problem.

For, from the first, famous sentence of 1984, we are also reminded that we have entered a universal with a certain kind of instability at its core. That the clocks strike "thirteen" is distinctly odd.* Odder still is that when Winston starts his diary, he quickly writes, ‘To begin with he did not know with any certainty that this was 1984. It must be round about that date, since he was fairly sure that his age was thirty-nine, and he believed that he had been born in 1944 or 1945, but it was never possible nowadays to pin down any date within a year or two." The theme is repeated throughout the novel.** This uncertainty about the date is especially odd because in his work, at the Ministry of Truth, which involves fabricating and retouching news-stories in the Times, he encounters the official date on the newspaper every day.

But, of course, that calendric reform coincides with a major political revolution is no surprise. It's happened before. So, the Party could have changed dates for convenience sake. And the fact that Winston is part of the process of permanent falsification (in the ordinary not Popperian sense) means he knows nothing he reads can be trusted. The "terrible" book by the traitor Emmanuel Goldstein ("The Theory and Practice of Oligarchical Collectivism") turns out to be circulated and written by the Party so Winston's torturer claims. Can he be trusted, who knows?

In fact, and I hate to go meta-textual, but textual instability is even part of the title of Orwell's book, which is often spelled just '1984'; 'nineteen eighty-four' and 'Nineteen Eighty-Four.' And as Pynchon notes, the American edition was almost published without its appendix.

Now, first, Orwell's important political insight, anticipating (recall) Arendt, is that in true totalitarianism the center and near-center is often not just paranoid, but also has no better access to the truth of its own affairs than ordinary citizens or foreigners. In a system like that it cannot develop a true shadow book-keeping. And, as Orwell notes, this also makes collective planning so difficult and self-defeating.

Second, (recall) as Walter Lippmann (building on, as Nick Cowen reminded me, J.S. Mill) emphasized, reliable record-keeping by the state (of birth, death, property deeds, etc.) is one of the bedrocks of many species of modern liberty. Yes, anarchists everywhere and some Foucaultians will see in such legibility an immanent, would-be panopticon. (Pynchon's own writings are worth re-reading for reflection on this.) Even so, reliable record-keeping is the foundation of removing many forms of uncertainty and generating reliable expectations. And when there is little reason for doubt and suspicion about these records, the politics tends to be more temperate. Blessed are the times in which such record keeping can be taken for granted, and is available to all! 

Third, I put the passages of Spinoza at the top of the post because in many ways we readers of 1984 are in the position that Spinoza attributes to the would-be-interpreter of Scriptures. In a way, the Appendix reinforces this point. For, it provides us with an interpretation of the rules of Newspeak that, while compelling, is clearly also post facto and may, in fact, serve it's own political ends. As I noted last week, Pynchon is surprisingly optimist in reading the Appendix as a sign of a restoration of sorts, whereas my two previous posts argue that this need not be so. And because Orwell deliberately does not inform us of the author of the Appendix and his/her intentions, we are pretty much in the same position as Spinoza implies about Scriptures, "we are completely ignorant of the authors (or, if you prefer, Writers) of many of the books, or else we have doubts about them." (TTP VII [58]).

Let me close. I do not mean to suggest that the severe textual and referential instability of and in 1984 reduces it to a kind of meaningless white noise. Spinoza address an objection like this in Chapter X, too:

[42] But perhaps someone will say that in this way I overthrow Scripture completely—for in this way everyone can suspect that it is faulty everywhere. But that would be wrong. 

Something like this seems true of one's reading of 1984. But once one starts pressing on the details, one has to allow major insecurity about one's own judgments of it. Paradoxically, inducing such an experience into the attentive reader may well be one of its aims. 

On (Wireless) Networks, Secret Police, and the Information State (via Hannah Arendt and Walter Lippmann)

The only important addition to our knowledge, the contents of the Smolensk Archive (published in 1958 by Merle Fainsod) have demonstrated to what an extent dearth of the most elementary documentary and statistical material will remain the decisive handicap for all inquiries into this period of Russian history. For although the archives (discovered at party headquarters in Smolensk by German intelligence and then captured by the American occupation force in Germany) contain some 200,000 pages of documents and are virtually intact for the period from 1917 to 1938, the amount of information they fail to give us is truly amazing. Even with "an almost unmanageable abundance of material on the purges" from 1929 to 1937, they contain no indication of the number of victims or any other vital statistical data. Wherever figures are given, they are hopelessly contradictory, the various organizations all giving different sets, and all we learn beyond doubt is that many of them, if they ever existed, were withheld at the source by order of the government.
Also, the Archive contains no information on the relations between the various branches of authority, "between Party, the military and NKVD," or between party and government, and it is silent about the channels of communication and command. In short, we learn nothing about the organizational structure of the regime...In other words, while it has always been known that official Soviet publications served propaganda purposes and were utterly unreliable, it now appears that reliable source and statistical material probably never existed anywhere.--Hannah Arendt The Origin of Totalitarianism, Preface to Part Three, xxxi (June 1966)

In her analysis of totalitarianism Arendt calls attention to the "multiplication of offices" in one-party dictatorships (522). This permits "constant shifting of power" (among party, state, office, etc.) by the leadership in order to generate permanent domination by the leader (53). One side-effect of this multiplication and constant motion is the undermining of competent state capacity (564).*

A key feature of this is impaired state capacity, which is worsened by the culture of secrecy, pervasive censorship and propaganda,  is that the state and its leadership lack reliable information even about itself. And part of the problem is that the culture of trust that supports a whole system of data gathering, collecting, and dissemination is constantly undermined in a totalitarian context.+ 

That the state is a machinery of record, a collector and disseminator of accurate public data was (recall) the central argument of Lippmann’s book Public Opinion (1922). A lot of our social practices, inside and outside the market, presuppose a social infrastructure in which the machinery of record is reliable; public authorities and private actors can plan their activities.

Lippmann’s underlying idea was not wholly original. As Nick Cowen reminded me recently, one can see the germ of it articulated nicely in John Stuart Mill’s On Liberty that “the greatest dissemination of power consistent with efficiency” should be allied with “the greatest possible centralisation of information, and diffusion of it from the centre.” Mill adds that "this central organ should have a right to know all that is done, and its special duty should be that of making the knowledge acquired in one place available for others."

To be a machinery of record requires state bureaucracies that operate by clear and impartial rules, statistical offices that collect data, and public record-keeping that is reliable and accessible to all with minimal thresholds. This immense and often nearly invisible machinery makes possible both political contestation and many private individual and collective decision making. As Lippmann, himself an accomplished journalist, emphasized even the very free press that reports the news and holds politicians accountable presupposes a proper functioning machinery of record (of births, deaths, marriages, licensing, etc.).

Totalitarian and authoritarian regimes have a tendency to undermine the machinery of record for a whole mixture of ends. But this is also true in states in which petty corruption takes a firm hold: once the opportunities and culture of bribery take over, say, customs house and farm or building inspectors, the data they report must be treated as fiction. In societies where corruption is normalized, the machinery of record cannot hope to stabilize expectations and facilitate planning. 

But, Arendt also notes that within structural undermining of the Weberian bureaucracy, there is "the utopian goal of the totalitarian secret police." (567) This goal is the development of a map -- we would say network--  of "the relations and cross-relationships of the entire population." (567) With the increase of computer power and the drop in its cost this goal is now not just feasible, but almost certainly within reach of public and private institutions. Arendt's concern is not the ways by which this network can be exploited to some policy end; but rather that a full map of the network allows for disappearance of (shall we say) nodes on even whole regions of the network. Survival in a totalitarian state requires, in addition to Luck, disappearing from the grid.

So, on Arendt's account then totalitarianism is characterized by two opposing movements: (i) the structural undermining of the state as machinery of record; and (ii) simultaneously the development of a secret map of the networked characteristics of the population. It is important to recognize that these are not in contradiction with each other. This is not just because the networked population map is relatively flat. Rather, given the effect of (i) on (ii) it is because in this map, once shadow-bookkeeping can't be trusted either, the state's activities become invisible to itself. This is why, despite the fearsome capacity to kill and terrorize, and (say) build at gargantuan scale, totalitarian and authoritarian regimes tend to be relatively hollow.

Naturally, this analysis raises non-trivial questions about political contexts in which the machinery of record and the networked map are properly functioning and not kept a secret. This question can be explored by way of the present political and public health fascination to use networked maps of wireless phone usage to control the spread of a virus, and people.

 

 

Chiang on metahumans (and the great chain of being)

The question is, are these worthwhile undertakings for scientists? Some call them a waste of time, likening them to a Native American research effort into bronze smelting when steel tools of European manufacture are readily available. This comparison might be more apt if humans were in competition with metahumans, but in today's economy of abundance there is no evidence of such competition. In fact, it is important to recognize that — unlike most previous low-technology cultures confronted with a high-technology one — humans are in no danger of assimilation or extinction.

There is still no way to augment a human brain into a metahuman one; the Sugimoto gene therapy must be performed before the embryo begins neurogenesis in order for a brain to be compatible with DNT. This lack of an assimilation mechanism means that human parents of a metahuman child face a difficult choice: to allow their child DNT interaction with metahuman culture, and watch him or her grow incomprehensible to them; or else restrict access to DNT during the child's formative years, which to a metahuman is deprivation like that suffered by Kaspar Hauser. It is not surprising that the percentage of human parents choosing the Sugimoto gene therapy for their children has dropped almost to zero in recent years.

As a result, human culture is likely to survive well into the future, and the scientific tradition is a vital part of that culture. Hermeneutics is a legitimate method of scientific inquiry and increases the body of human knowledge just as original research did. Moreover, human researchers may discern applications overlooked by metahumans, whose advantages tend to make them unaware of our concerns.

For example, imagine if research offered hope of a different intelligence-enhancing therapy, one that would allow individuals to gradually ‘upgrade’ their minds to a level equivalent to that of a metahuman. Such a therapy would offer a bridge across what has become the greatest cultural divide in our species' history, yet it might not even occur to metahumans to explore it; that possibility alone justifies the continuation of human research.

We need not be intimidated by the accomplishments of metahuman science. We should always remember that the technologies that made metahumans possible were originally invented by humans, and they were no smarter than we. Ted Chiang (2000) "Catching crumbs from the table," in Nature.*

The existence of metahumans (or enhanced, human cyborgs) reminds us that developments in technologies generate violations of Descartes' causal principle: what is more perfect can arise from what is less perfect. Technologies change how we conceive of what is humanly possible.+ In addition, technology helps generate violations of the great chain of being; there are  in-commensurable gaps between humans and metahumans.

Whether any technology can remove scarcity may well be doubted unless the metahumans can practice moral checks on themselves and nudge the humans into breeding at a replacement rate. Of course, if the metahumans did so, it's possible the humans would not know about it ([recall] in the way the machines/artificial intelligence nudge humans in Iain Banks' The Culture series).

The narration assumes that scarcity is the main motive for genocide. It also implies that being capable of developing science and technology, including presumably meta weapons of meta mass destruction, would generate an ethics of their proper use. Since metahumans were initially invented by humans no smarter than us, this is to be doubted. Perhaps the thought is that the ability to dominate nature (abundance, etc.) removes the desire to dominate (destroy/exploit, etc.) lesser beings. But let's leave that aside.

When I was reflecting on the story, I was initially unsure parents would indeed choose to be able to communicate with their children, and so continue their traditions even form of life, rather than choosing for their kids to be among the cognitive elite (the metahumans). Often today, it seems, designer babies represent not just the desire for healthy kids, but parents' status and economic aspirations for their children. Such parents appear to act for their childrens' good. 

But, upon second thought, Chiang's moral psychology seems persuasive. Because despite the emphasis on 'choice' in selling human enhancement technologies, our contemporary parents of designer babies are not really showing much respect for the (let's call it) autonomy of their children. Rather what they de facto do is lengthen the odds that the structure of their (parental/social) values/traditions are passed on and reproduced. 

Part of the joke of the story -- which first appeared in Nature -- is that academic journals have stopped being the vehicle for publishing original research. They are now mostly in the business of hermeneutics trying and trailing to understand metahuman science. For us the joke may be less funny because with the opacity of machine learning this possibility may well be shading into reality. Even so, it would indeed be funny if the success of an all-knowing data science would regenerate the felt need for a kind of science of interpretation that could help decode the revelations of a hidden intelligence. When computer science departments start hiring big-data-hermeneuticists, the heirs of Gadamer or Davidson can laugh at our analytic philosophers.++ Of course, with machine algorithms, there may simply be no there, there. And so this hermeneutics may well have to rely on an intentional stance.

Not unlike AL-Farabi's God (at least this is Al-Ghazali's charge), the metahumans may be t uninterested in the physical going-ons of mere mortals. One's position reflects one's choices of research topic. Chiang suggests that faced with the existence of scientifically superior metahumans, scientific humans would embrace if not standpoint epistemology, then the argument from epistemic diversity, from self-interest. If these human scientists are right, then the great chain of being would be restored.

 

On (Lippmann and) Ignorant Voters

The hypothesis, which seems to me the most fertile, is that news and truth are not the same thing, and must be clearly distinguished. The function of news is to signalize an event, the function of truth is to bring to light the hidden facts, to set them into relation with each other, and make a picture of reality on which men can act....For the troubles of the press, like the troubles of representative government, be it territorial or functional, like the troubles of industry, be it capitalist, cooperative, or communist, go back to a common source: to the failure of self-governing people to transcend their casual experience and their prejudice, by inventing, creating, and organizing a machinery of knowledge. It is because they are compelled to act without a reliable picture of the world, that governments, schools, newspapers and churches make such small headway against the more obvious failings of democracy, against violent prejudice, apathy, preference for the curious trivial as against the dull important, and the hunger for sideshows and three legged calves. This is the primary defect of popular government, a defect inherent in its traditions, and all its other defects can, I believe, be traced to this one.--Walter Lippmann (1922) Public Opinion (Chapter 24, 228-230) 

As regular readers know, I think reflection on Walter Lippmann is important in present circumstances. He is one of the intellectual architects (recall) of what I call the second-wave of liberalism (1945-2008), which has been imploding during the last decade, and even was the proximate cause of the development of what came to be known as neo-liberalism. More subtly, his conception of the good society, which hearkens back to the (attractive) kind of liberalism of Adam Smith and Sophie de Grouchy, rejects both state neutrality and state-craft as soul-craft; the good society is one that has many morally salient characteristics (the people are flourishing and can lead lives of their own choosing without fear or coercion). To attain the good society, not unlike a medieval cathedral, is a multi-generational, collective project. There is a sense in which this is a religious project. But, probably unlike the cathedral, the path and the outcome of the good society is, due to the uncertainty generating conditions of modern life, full of surprises. 

One reason to return to Lippmann (not in order to agree -- he also has (recall) serious weaknesses --) is that, as  JohnDewey emphasizes, he understands the problem of voter ignorance not, as anti-democrats do, as a problem of other (not-so-smart or gripped by ideology) voters, but as a structural feature of the human condition. One need not agree with all of Lippmann's ways of articulating the situation, to see that the (Platonic) cave is the human condition in mass society. And to overcome such ignorance, here he anticipates Hanna Arendt, is a rare achievement to be found in, or (perhaps its better to say) produced by, a few institutions:  the law and science.

As an aside, Lippmann, who knew the press from within, is adamant that the press is even during the best of times and ownership structures not that kind of institution capable of reliable generating truth.* And, in fact, he claims that, when the press is conducive, it is often relying on the rule-following features of the administrative state. Importantly, his skepticism about the press' truth-conducive-ness does not entail that the press has no positive contributions to make to democratic life. (If he thought that, his life would be self-undermining in a very obvious ways.)

I do not think Lippmann's answer to the problem of voter ignorance is successful, but it was (judging by what happened next) very influential; and if not influential, at least prophetic. It is possible that by Lippmann's own standards his solution would be deemed successful because Lippmann's aspirations were (again noted by Dewey) were more ameliorative than utopian.  Lippmann's proposal has three central features: first, is to advocate for an expansion of the (meritocratic) bureaucratic state and infuse it with what he calls 'technical knowledge' that he associates with "statisticians, accountants, auditors, industrial counsellors, engineers of many species, scientific managers, personnel administrators, research men, "scientists," and sometimes just as plain private secretaries." (234) He thinks such technical knowledge can also be turned into an "experimental social science." (237)  The point, for Lippmann, is not that such technicians will run the show, but rather that they become embedded (as "permanent intelligence section") in all government apparatuses (nationally and locally). For, by definition, a technician is not the decision maker.+

A key second feature of his proposal is that there will be a permanent circulation of college graduates from universities, perhaps even a privileged 'national university' (247) recruited from government staff, into government; and technical, government bureaucrats returning regularly to train and teach at universities. This intellectual flow of human capital would itself (in part) constitute "political science" and, in turn, would "associated with politics in America."+ (In 1922 economics was not yet seen as the future queen of the social sciences.) Lippmann optimistically assumes that all of this can be done transparently and openly (246).  The third, key feature is to insist that any political decision must be channeled through a procedure that will involve the bringing to bear of technical expertise on a problem (e.g., 255). 

As an aside, Lippmann's account is clearly distinct from the (later) Hayekian narrative, which sees the rise of the bureaucratic, technocratic state as a consequence of the experience of (mobilization and) war-planning during WWI. Lippmann, by contrast, thinks that the rise of the technician in the great society is itself the consequence "of blind natural selection" (234); complex organizations faced with complex decision environments started to require technical expertise merely to help integrate the flow of data and to structure decision-making for the executive. One discerns in Lippmann that the problem of big data is a nineteenth century problem, and that to overcome it even in competitive markets, requires the rise of expertise within organizations.

Now, Lippmann is not unaware that there is a real risk the technocrats will quickly run the show and displace elected officials and electorate. His response to this is to insist on a stark distinction between executive and technical functions and to aim to align incentives between them properly. [242]+ Only this can keep the technician's disinterestedness in place. If such a distinction were to be maintained in practice, and an esprit de corps among the technical class could be cultivated, then his hope that there will be circumstances in which the presence of a class of technicians can even abolish partisanship would not be comical. I don't mean to suggest that Lippmann's proposal is impractical: it very much reflects reality inside important elements of the governance of the EU and the US Federal government. As Dewey discerned, Lippmann proposes what became a tool, even an effective technique of governance one that has undoubtedly helped reduce the catastrophic mistakes all political agents can make.**

I used the word 'comical.' Perhaps that's unfortunate.  For Lippmann's weakness is the weakness of much of twentieth century liberalism. We can discern in Lippmann a tendency toward consensus and de-politicization in thinking about politics. In his (1937) Good Society, he demands that politicians combine, in spirit, the temperament of a legislator and a judge (who is impartial, fair, temperate, etc.) As the earlier Public Opinion teaches, that aspiration would only be possible in reality if political life is not governed by opinion. But if that were possible, we wouldn't (recall) need democracy at all. 

 

 

on Glory Liu on Milton Friedman (and George Stigler) and the Invisible Hand.

Though they were both students of Knight and Viner, Milton Friedman (1912-2006) and George Stigler (1911-1991) had very different views about the nature and purpose of economics — and hence, of Smith — from their predecessors. For Friedman and Stigler, economics’ scientific power came from its ability to predict outcomes based on two central insights, both of which could be found in “The Wealth of Nations.” The first was self-interest, or what Stigler called the “crown jewel” of “The Wealth of Nations.” According to Stigler, Smith’s idea of self-interest was so powerful that it was “Newtonian in its universality” and had unlimited explanatory power.

The second was, of course, the invisible hand. According to Friedman, Smith’s master metaphor represented “the way in which voluntary acts of millions of individuals each pursuing his own objectives could be coordinated, without central direction, through a price system.” Taken together, self-interest and the invisible hand represented the core axioms of scientific economics. The political implications were clear. Once individual behavior was reduced to utility-maximizing self-interest, promoting Smith’s invisible hand of the market — and restraining the heavy hand of government — was the ultimate goal. Few economists were as successful as Friedman in spreading this interpretation of Smith’s ideas to the public. In numerous op-eds in major news outlets, speeches and public television (where he sometimes sported an Adam Smith tie), Friedman popularized this interpretation of Smith’s invisible hand for an overtly conservative political agenda.--Glory Liu, "How the Chicago School changed the meaning of Adam Smith’s ‘invisible hand," The Monkey Cage, Washington Post

The quoted passage is by the exciting young scholar, Glory Liu, who published an important scholarly paper on the reception of Adam Smith in the Chicago school (see here). Liu's WP editorial is a nice introduction to the more complicated larger argument. And I agree with her conclusion that "Smith’s relevance has always been political" (although I would add not only political). Her editorial nicely introduces a larger public to the complex intellectual evolution of the Chicago school, drawing an important (and scholarly well grounded) generational contrast between Viner and Knight (who didn't agree about everything important) and two of Chicago's Nobel laureates, Friedman and Stigler (who also didn't agree about everything important). It's a clever idea to use their treatment of Smith to reveal the contrast.* 

Here I want to focus on Liu's treatment of Friedman in her editorial and her piece. For, while Liu is primarily interested in the reception of Smith (and the political ways in which the Chicago schools used him), she does take a stance on Smith's position. I quote the relevant paragraph (from the editorial):

At the same time, political theorists and historians like me have argued that the Scottish moral philosopher didn’t just stand for free markets and that, in fact, [A] Smith’s invisible hand wasn’t a warning about state intervention but state capture. Rather unlike the caricature of Smith who espouses unchecked economic growth, they’ve also argued that [B] Smith was deeply worried about the moral consequences of growing inequality.

The first reference [A] is to a 2018 Aeon piece by another rising scholar, Paul Sagar. The second is [B] to an essay by a leading (more senior) scholar, Dennis Rasmussen writing in the Atlantic in 2016. (That second piece was, in turn, anticipated by Deborah Boucoyannis in her LSE blog, which introduced the findings of her important 2013 paper, and several papers by Lisa Herzog (see, for example here and here).) It's notable how much public attention Smith is getting! As it happens I agree with [B] and so I leave that aside here.  But the story about [A] is more complicated. Let me first quote Sagar before I respond to him and Liu:

Indeed, Smith’s single most famous idea – that of ‘the invisible hand’ as a metaphor for uncoordinated market allocation – was invoked in precisely the context of his blistering attack on the merchant elites. It is certainly true that Smith was skeptical of politicians’ attempts to interfere with, or bypass, basic market processes, in the vain hope of trying to do a better job of allocating resources than was achievable through allowing the market to do its work. But in the passage of The Wealth of Nations where he invoked the idea of the invisible hand, the immediate context was not simply that of state intervention in general, but of state intervention undertaken at the behest of merchant elites who were furthering their own interests at the expense of the public.

So, first, I agree with Sagar and Liu that Smith cared deeply about state capture by mercantile interests. But it is worth noting Milton Friedman also agreed about this. In the very (1977) essay that Liu quotes, Friedman writes:

There is a great misunderstanding about Adam Smith, a serious misconception of his role. Because he is known as the father of laissez-faire, because of his emphasis on the “invisible hand,” and because he explained the virtues of the price system, Smith is ordinarily regarded as if he were a defender of the status quo, a representative of the existing institutions, part of the establishment. He was anything but that. Smith was a revolutionary, one of a small minority who attacked the existing order of things. At the time he wrote in the late eighteenth century, Britain was a mercantilist state, in which the government was exercising almost as great a control over economic affairs as the United States government does now. It was a state of affairs in which there were restrictions on imports and exports, there were remnants of the guild system of the middle ages, and so on down the line. Adam Smith attacked this system. His book was a tract for reform, calling for a revolution in the way in which economic affairs were conducted.--Milton Friedman (1977) "The Invisible Hand"

What Friedman writes here is all correct (except, perhaps, the claim that in 1776 "the government was exercising almost as great a control over economic affairs as the United States government does"in 1977). In fact, as I have noted before (recall here and here) it is a key theme of Chicago economists to worry about state capture. These days regulatory capture is entrenched within the critique of neo Liberalism. But the idea of regulatory capture was developed by the Chicago economist, George Stigler [recall this post, too], and is also strongly associated with the so-called public choice literature associated with the Virginia school of (other Chicago trained economists) Buchanan and Tullock and law economics (see this classic article by Coase). That is to say, the intellectual framework of regulatory capture was developed to help understand and criticize the effects of the New Deal and became influential in the aftermath of understanding the successes and limitations of the Great Society by market-friendly economists.

As it happens, in his 1962 presidential address to the AEA, Stigler credits the idea of state capture to Adam Smith! However, he does so, in part, to complain that Smith fails to "demonstrate" empirically "that the state is normally the captive of "partial interests." (3; Liu does not mention the piece in her more scholarly article.) So, Stigler and Friedman agree with (and anticipate) Liu and Sagar that Smith was interested in and worried about state capture and rent-seeking. 

Second, Sagar and Liu are correct that the invisible hand (in the version presented in the Wealth of Nations) is offered in the context of Smith's criticism of state capture by mercantile interests. I agree with them that Stigler and Friedman tend to ignore this when they write about the invisible hand.

Third, while it is true that Friedman and Stigler both thought that assuming self-interested agents could be predictive,+ I doubt, as Liu suggests (this is not in Sagar), they thought that positing the invisible hand helped them make "predictions." Since this claim is not (defended) in Liu's original essay in Modern Intellectual History, I am inclined to chalk this error up to the difficulties of condensing a major scholarly achievement into a popular presentation.

Fourth, I disagree with Sagar and Liu that in the Wealth of Nations, the invisible hand is itself a warning about state capture. Rather as I argue in my recent book, the phrase 'invisible hand' captures circumstances when (i) an agent produces unintended consequences that (ii) are unknown to him or her; but, (iii) the consequences are, in principle, knowable to the right kind of observer (theoretically informed)** at the time, and (iv) in fact, the agent should have known better. (As an aside, invisible hand processes tend to be short term in Smith and to be contrasted with the more typical unintended consequence explanation/process given by Smith.) In fact, one of the the key underling points is that (mercantile) ideology masquerades as science and, thereby, confuses even those who benefit from the ideology.++

Now, I agree with Liu that Friedman's interpretation of the invisible hand -- Adam Smith was all the rage in 1976-7 due to bicentenary of Wealth of Nations --  as a master metaphor representing the way in which voluntary acts of millions of individuals each pursuing his own objectives could be coordinated, without central direction, through a price system is incorrect. But as an interpretation of Smith, even the passage in which the invisible hand as a phrase occurs, it's not wholly false either: the subsequent passage (the very next paragraph in Wealth of Nations) does claim that government should not direct industry or mercantile agents (as Sagar also notes):

"What is the species of domestick industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his local situation, judge much better than any statesman or lawgiver can do for him. The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it."

This gets me to the final point. Liu notes in her conclusion that, 

What makes the Smith of Milton Friedman and George Stigler so interesting — some people might say problematic — is not that they aligned Smith with a particular political agenda. It’s that they “economized” Smith in a way that obscured if not precluded the relevance of his moral philosophy and political theory. Stigler once famously quipped that “the correct way to read Adam Smith is the correct way to read the forthcoming issues of a professional journal.” In other words, Stigler believed that you had to read Smith as if he were a modern, 20th-century economist, not (as Smith originally was) an 18th-century moral and political thinker. What’s more, the power of Friedman’s version of the invisible hand derived from the seemingly objective scientific authority of its author, the “father of economics,” Adam Smith. It’s clear, however, that impulse to portray economics — even Smith’s version of economics — as an objective science is deeply embedded in the history and politics of the discipline.

Much of this is right. But there are two potentially misleading and connected features to this quote. First, Stigler's famous quip is offered in the context of an extended argument about the purpose of history of economics (it is a passage that long ago caught my eye): "The purpose in seeking to understand the man’s theoretical system is not to be generous or malicious toward him, but to maximize the probability that his work will contribute to scientific progress. Only if the analytical system is well defined and cleansed of irrelevant digression and inessential error may we determine whether it is a worthy addition to the corpus of the science, or at least a line of investigation that ought to be expslored further." (Stigler "Does Economics Have a Useful Past?" 1969: 221) Now, one may think there are other ways to make the past usable to scientific progress or, perhaps, other purposes for the past. (I think that's compatible with Stigler's position here, but this post is too long already.) Stigler's position does not entail that one need to efface the relevance of Smith's moral and political theory. For Stigler thinks that in addition to the corpus of (progressing) economic science, there are two different projects -- which both he and Friedman call 'normative' economics and the 'art' of economics. From the start of his professional career, Stigler takes these other two projects very seriously so much so that he famously, perhaps infamously, contested welfare economics's claim to being an objective science from his earliest publications onward (recall here; here, here, and here).  

And, in fact, Stigler (not Friedman) shared with Smith the idea -- now unfashionable -- that the knowledge that economics produced was knowledge of comparative institutional development and analysis. As Stigler puts it in his AEA address: the "competence" of economists "consists in understanding how an economic system works under alternative institutional frameworks." (2)*** This has many pertinent implications for normative projects associated with political theory, including the possibility and appropriateness to act as an adviser to government. Stigler's immediate example is, of course, Adam Smith, but he criticizes Smith for insufficient evidence for his claims.+++ 

The reason for Stigler's dismissive attitude is not hard to find. Stigler (1971) thinks that "Smith’s attitude toward political behavior was not dissimilar to that of a parent toward a child: the child was often mistaken and sometimes perverse, but normally it would improve in conduct if properly instructed." ("Smith's Travels on the Ship," 273) The problem is not Smith's tone, but rather, according to Stigler, the giving of policy advice "without taking account of the political forces which confine and direct policy. In the absence of knowledge of these political forces, the advice must often be bad and usually be unpersuasive." What this reveals is that according to Stigler, Smith was a normative, political theorist. ("Political science had been a normative literature for 2300 years before Smith wrote and has continued to remain normative to the present day.") It's just that according to Stigler a different kind of policy relevant political theory is required; Stigler thinks that the art associated with turning empirical economics into normative economics involves taking into account the political forces which confine and direct policy. He claims Smith failed to do so, so qua political theorist, Smith is not an exemplar worth taking seriously according to Stigler.*****

On Arrow on Religion, Rule of Law, and Interpretation

Social decisions are sometimes made by single individuals or small groups and sometimes by a widely encompassing set of traditional rules for making the social choice in any given situation, e.g., a religious code.1

1. The last two methods of making social choices are in a sense extreme opposites, developments of conflicting tendencies in a democracy. The rule of a single individual is the extreme of administrative discretion, the rule of a sacred code the extreme of rule by law. But in dynamic situations the rule of a sacred code leads by insensible steps to dictatorship. The code needs interpretation, for conditions change, and, no matter how explicit the code may have been in the first place in determining how society shall act in different circumstances, its meaning becomes ambigous with the passage of time. It might conceivably happen that the job of interpretation passes to society as a whole, acting through some democratic process–“vox populi, vox dei.” Or it can happen that interpretation passes to the hands of the people individually and not collectively; in this case, as soon as differences of opinions arise, the religious code loses all its force as a guide to social action....But more likely, in view of the authoritarian character of the sacred code, the interpretation will pass into the hands of a single individual or a small group alone deemed qualified....The classification of methods of social choice given here corresponds to Professor Knight's distinction among custom, authority, and consensus, except that I have subdivided consensus into two categories of voting and the market. (F.H. Knight "Human Nature and World Democracy" in Freedom and Reform,...1947, pp. 308-310.)---K. Arrow (1951) 'Introduction" Social Choice and Individual Values, p. 1.

As regular readers know, I have been researching Arrow's reflections on uncertainty and his impact(s) on and exchange(s) with Rawls for half a decade now; I was alerted by one of my mentors in the history and philosophy of economics, David M. Levy, to the treasure trove(s) of philosophical issues in the vicinity. I never met Arrow, but I did email him once, in 2010, to learn about his readings  in the history of physics (due to a comment by Koopmans suggesting that Arrow was Koopmans' source for some of his remarks on the methodology of physics in his exchange with Vining). But I never get a response (perhaps my note ended up in his Spam-box). I did not try very hard to meet or contact Arrow (for an overview of his life and influence see the New York Times obituary) because I wanted to sort out my own (critical) views on his work on uncertainty before I exposed myself to his influence.

In A Theory of Justice, in a footnote (recall my post here), Rawls, a careful reader, calls attention to the significance of some footnotes in Arrow's Social Choice. The first footnote (quoted above) articulates a political interpretation of religion: religion is understood as (i) the storehouse of law-like "rules" for (ii) decision making in particular circumstances. So, religion provides both historical memory -- a way to codify experience -- and a means (iii) to help small groups decide on behalf of the collective.  That the rules are supposed to be (in their ideal form) law-like is made clear at the start of the footnote.

The rest of the footnote is a comment on the instability of sacred codes as species of the rule of law. According to Arrow this rule of law is not a stable equilibrium and devolves (on a slippery slope with insensible steps -- one wonders what measure Arrow is assuming here -- to serfdom) into dictatorship. Arrow insists that the cause of such instability is the inability to freeze meaning ("meaning becomes ambiguous with the passage of time"). [Quine, who knew his Arrow (see his autobiography), would appeal to a similar argument in one of his attacks on Carnap's defense of analyticity by way of stipulative definitions]. The reason for this is, as Arrow indicates, that (the science of) interpretation cannot be turned into a consensus-generating device.

My aim here is not to expose the somewhat shaky foundations of Arrow's sociology of religion nor to explore why he decides to engage with Frank Knight from the very start of Social Choice. (As he indicates in the same footnote, he is relying on Tawney's Religion and the Rise of Protestantism.) But it is worth noting that the way Arrow has articulated the point, the very same argument applies, it seems. to a secular rule of law with authoritative judges as secular elite, priesthood.  On Arrow's view the rule of law is inherently unstable and always runs the risk of devolving because interpretations cannot be stabilized. The rule of law need not devolve in dictatorship, of course (it need not be intrinsically authoritarian), after all interpretation can conceivably "pass" to "society as a whole."

What is notable, however, is the claim that "as soon as differences of opinions arise, the religious code loses all its force as a guide to social action." Arrow is a very precise writer, and this is no slip of the pen. On his account without consensus (or full agreement) the rule of law (religious or secular) becomes impotent. That is to say, the instability of interpretation must undermine the authority of the religious code/rule of law which apparently must speak with a single voice. Once this is in place Arrow can turn to his formal exploration of social choice. One can respect Arrow's formal skills, his mentorship of many influential students, and his many contributions to economics, not the least general equilibrium theory, and also recognize that despite Arrow's view, there may be versions of authority (even religious authority) that can co-exist in creative tension with discordant interpretation(s) at a given time. In fact, one may well understand the nature of civilization as accepting this cardinal fact.

 

Can Philology Save Us? On Justin Smith's vision for the university of the 21st century

For philology may hold out not only the promise of reviving the humanities, but also of reestablishing the lost unity of the human sciences with the sciences of nature. Part of philology's apparent irrelevance today has to do with what we may diagnose as our society's radical and unprecedented presentism. No textual culture in human history has been so indifferent to its own past, and indeed this indifference strongly suggests that, though we continue to Tweet and to 'text' and to share memes that consist in part in strings of words, we are in fact moving into a post-textual era....This presentism not only cuts us off from what was long understood to be a central concern of the human sciences --to know who we are by knowing where we've come from--, it also perpetuates and deepens the contingent and unnecessary separation, as I've suggested, of the human from the natural sciences. Understood as philology, as a search for origins, the human sciences in fact share a great deal with a number of other sorts of inquiry often cordoned off from the human sciences on the other side of what has been called, since C. P. Snow introduced that term in 1959, the 'two-cultures divide'. Philology shares aims and objectives, and sometimes also methods, with archaeology, as also with paleontology, evolutionary biology, and perhaps even those branches of theoretical physics that deal with the distant origins of the universe. All seek to account for how the world got to be the way it is....

History...should be elevated to its rightful place, as the reigning science in the emerging universities of the 21st century. It is the best hope for an exit from the current dérive of the humanities, and, much more than this, it is the best hope for overcoming the false and arbitrary rift between the human and the natural sciences. History is considerably larger than philology, yet philology itself may be much larger than it is now perceived to be. Pollock notes that philology "has been everywhere that texts have been, indeed, in a way that we have yet to fully grasp, everywhere that language has been." This ubiquity was however grasped, for example, by the early Islamic field linguists who went out to build their lexica from the oral poetry of the Bedouins. Nor, at other times in history, as for Leibniz and William Jones, was the boundary of the genealogist's project set at the limits of language, but indeed extended to all the things named in language, to the world itself. In their diminished self-understanding, today's humanists have relinquished all these things to the natural scientists, who for the most part do not know what to make of them. By rediscovering its unity with philology in the shared project of history, natural science stands to gain as much as the humanities do: to rediscover its lofty purpose of enabling us to make sense of the world, and of our place in it.--Justin Smith "A Forgotten Field Could Save the Humanities," The Chronicle of Higher Education. [Behind a paywall; HT DailyNous.]

Justin Smith is probably the most creative and playful historian of (early modern) philosophy today.* So, I was sad to learn that he is "increasingly" leaving it "behind in view of its woeful provincialism." In his piece he also rejects 'localism' (which he associates with a deplorable, it seems, "new strain of identitarianism in the humanities.") He embraces, rather, "a global, rather than provincial," perspective. (He is quoting Sheldon Pollock, but in context he is endorsing it.) From context it's clear that the 'global' is something distinct from the 'universal' (or, at least, the purportedly universal that he associates with Anglo professional philosophy). Presumably, a universal perspective homogenizes, whereas the global makes space for differences due to (again quoting Pollock approvingly) "historicity, constructedness, and changeability," not in the least in the trajectories of knowledge production. This becomes clear from Smith's dazzling display of examples of "early Islamic field linguists,"  the Nietzsche-Wilamowitz debate, William Jones's research on the names of plant species in Sanskrit and other South Asian languages, and Leibniz's vision.

It is worth noting that the natural antonyms of the province and 'provincial,' are not just the urbane and broad-minded, but also empire or imperial. And, in fact, the material and administrative precondition for the the global vision is often some kind of empire. And while we tend to think of colonial empires as great projects of subjugation and effacement of local difference, there are empires in which there is unity while respecting provincial diversity--it's these empires that most need (to quote Smith) a "unified project." One way to generate such a project, is to project "the lost unity" (emphasis added). These projects are fueled by restorative nostalgia that is, simultaneously, hyper-modern and a source of immense creativity. Such projects also involve an insistence that perspective matters and that hopeful greatness needs to be projected on a larger canvass. [For an excellent literary treatment of such matters, recall John Williams' novel Augustus.]

While Smith may wish nothing to do with something as crass as a military empire, his project does involve elements of restorative nostalgia (e.g., "elevated to its rightful place, as the reigning science") and a fondness for taking about 'we' when it suits him. He insists, also, that the present view of philology is mistakenly diminutive (see also the "diminished" view of the humanities) and "yet philology itself may be much larger than it is now perceived to be" in order to be more "lofty." In addition, he is not against the (selective, prudent) use of force because he insists that there must be 'compulsory instruction' in order to ensure that certain kinds of forgetting does not occur ("no one ever forgets that in the end there are no truly atemporal sciences.").

Like many who embrace such restorative nostalgia (Carlyle, Nietzsche, etc.), the criticism of the present is acute and insightful:

"Among the humanities, philosophy...is surely the field in which European area studies has most successfully disguised itself as a universal and timeless form of inquiry. How often do we hear philosophy professors demur, when the subject of, say, classical Indian logic comes up, that they "regrettably don't know anything about that." What they really mean is: "My professional identity is wrapped up with my not knowing anything about that." This is something we learn as graduate students: a period of socialization in which we learn not only how to display our knowledge of, and commitment to, a given circumscribed domain, but also learn how to scoff, subtly, at whatever research interest falls even slightly beyond that domain. This is an acquired syndrome, transmitted from faculty to graduate students in the course of their own professional reproduction.**

My sense is that Smith's diagnosis is an apt characterization of our teacher's generation (although we both know exemplars that displayed different attitudes). The new generation of professional philosophers is embracing a different ethic; one in which any topic or puzzle is a legitimate opportunity to display technical virtuosity. Such technical sophistication is, of course, compatible with (although need not entail it) a thin understanding of the topic (and its historicity, etc.)  

An impatient reader sympathetic to (various bits of) Smith's project may suggest that my remarks thus far are distracting from the main agenda of his piece: his research agenda, that is, to combat 'presentism' and to promote a unified project in which the humanities and the sciences jointly "make sense of the world, and of our place in it," in part, by taking our path toward the present seriously. There are certainly opportunities for such thick collaboration between the humanities and (for convenience sake) the life-sciences. (About a decade ago, I penned a series of three papers in which I claimed that the history of astronomy and the history of economics are crucial to astronomy and economics (conceived as a policy science.)) I do hope that some enterprising university Rektor of a "non-Euro-American, university of the 21st century," hires or consults with Justin to help her implement a university with three faculties (a 'faculty of history', a 'faculty of the atemporal sciences', a 'faculty of new stuff') along the lines envisioned by him.

But in his essay, Smith offers us the matter, but not the form of this unity which, thus, becomes unexpectedly its own telos. Smith offers us the institutional strategy without the standard that may justify or vivify it. Without such a vision it is not obvious why the experts of the present and future will join in the shared enterprise (and they will persuade their paymasters to block it). To put the point jokingly, what's missing is the sense in the sense-making (I might say, the utopian concepts). Previously, this form was supplied by (say) revelation or philosophy. By bagging Spinoza's criticism of revelation, Smith cuts himself off from the former. By turning his back on the latter, he seems to leave himself without resources. But, perhaps, he thinks, with the Romantics, that poetry or art can supply the form. That uncertain, transformative path must seem tempting.

Trump Panic; On "the Breakdown of Trust between Elites and Base..."

One thing is certain: If the Republican party had the same rules in 2015 as it did in 1915, Donald Trump would not be a problem. His entire candidacy is premised upon the breakdown of the relationship between the elites and the base, whose mutual accord has been central to the effectiveness of the postreform rules. For all its defects, the old nomination process, which placed power exclusively in the hands of the state and local organizations, would have dispatched Trump's candidacy with ruthless efficiency...

After this cycle, the Republican party desperately needs to reform its rules. This does not mean tinkering at the margins, playing with delegate allocation formulas and debate schedules, as the Republican National Committee did after 2012. The 1970s reforms allocated power within the party based on a premise of mutual trust and respect between the voters and the establishment. Without that foundation, the rules are a liability and need to be substantially redrafted. The real danger is not that a clownish demagogue like Trump will win the nomination this cycle, but that a demagogue who is not so much a clown eventually will.---Jay Cost, The Weekly Standard,

The mixture of democracy and free markets (and free movement of people) is unstable. This is due to the fact that markets are inherently disruptive, given that they aggregate the the constantly bombarded preferences of (thereby?) fickle consumers,  and that (democratically established and/or enforced) existing rules skew the outcomes toward those with political clout. As I noted before this instability can become toxic if, in the context of heterogenous populations, the status quo generates reasonable expectations that get violated--as they must given the way markets generate uncertain outcomes. In times of stagnation, increasing inequality, and huge gains for well-protected (rent-seeking) insiders, it is to be expected that populist appeals can be mapped onto some us/them distinction that allows some us to be the authentic, united people -- even a moral community -- that excludes elites and would be (inauthentic -- e.g., immigrants, wrong religions, 'inferior' ethnicities, etc. --) members of the people.* The electoral and political success of populism, and (more important) accompanying polarization and destabilization of the familiar status quo, in turn makes some of the elites mistrustful of democracy.

One such mistrust, familiar from libertarian circles (recall) with mistrust of redistribution and rent-seeking, sees in democracy a potent moral danger in which in the polling booth the uneducated, whom cannot grasp complex phenomena, make bad decisions in the voting booth that turn out to have immoral consequences. Such libertarians prefer either markets or experts (or both, but with preference for markets) over democracy (sometimes they prefer lots as a species of democracy). Of course, it is not just libertarians that may prefer expert rule--as I have noted the European Union is a technocratic enterprise in which, thanks to the fate of Weimar and the instability of Third Republic, democratic 'input' is kept to a minimum.

There is also a longstanding conservative mistrust of democratic, popular sovereignty (going back to Burke). The impact of the Donald Trump is re-activating this trope the Republican party. What makes Jay Cost's analysis noteworthy is not that he is openly calling for an end to the accessible, primary system of picking the party-standard bearer, but rather his analysis that what makes intra-party democracy possible is a kind of tacit social compact involving  mutual trust and respect between (party) 'base' and (party) 'elite.' This trust facilitates a structure in which "The [Republican] party voters possess the formal power to decide, but there is a vast infrastructure of donors, strategists, and insiders—an elite establishment—whose job is to control informally the people's decision." The intra-party success of populism (which is directed against the elite(s)) undermines that trust and respect (etc.).

As an aside, Goldwater-Reagan style conservativism was, itself, a successful, popular and (in its race-baiting moments, populist) revolt against moneyed, East coast elites (and the 'culture' of welfare/hand-outs, etc.).  This conservative movement fizzled out, after forty to fifty years of success, in the second term of G.W. Bush (Iraq, Wall Street, etc.). (Trump is clearly a very different kind of populist.)

Cost, who calls for a return to a more heavy handed (formal) elite-managed selection procedure to maintain the integrity and longevity of the institution, does not reflect on the causes of the breakdown of trust between base and elite (which has been manifested, in part, by successful electoral challenges to (powerful) Republican incumbents). In fact, Cost is merely expressing the elite side of the breakdown of the trust. One important way in which trust breaks down if (tacitly) agreed upon expectations are systematically violated. (This is why there is a close connection between justice, trust, and stability.) The conservative movement has always been a coalition between cultural and Christian conservatives with (a much smaller group of) libertarians (who tended to represent, sometimes uneasily, business interests). While this is not always and everywhere a natural coalition, it is not entirely strange: markets and open borders generate permanent disruptions, and, for all the benefits these may bring, the subsequent dislocation feeds a desire for cultural and social stability (and slowing down of change).

Cost names a real danger: that a demagogue who is not so much a clown (but still a bit!) eventually will win the nomination and, thus, have a shot at the Presidency. He does not name the other danger (exhibited by his piece, but prevalent in Europe, too): that the "vast infrastructure of donors, strategists, and insiders" -- the rich, the highly educated, and the technocrats -- will give up on  democracy as an end, and only see it as as a, dispensable, tool.

Why is the IMF Protecting Central Bankers?

Macroprudential policy is a complement to microprudential policy and it interacts with other types of public policy that have an impact on systemic financial stability. Indeed, prudential regulation, as carried out in the past, also had some macroprudential aspects, and the recent crisis has reinforced this focus; hence, a clear separation between “micro” and “macro” prudential, if useful conceptually, is difficult to delineate in practice. Moreover, no matter how different policy mandates are structured, financial stability tends to be a common responsibility, reflecting the far reaching consequences of financial crises. This calls for coordination across policies, to ensure that systemic risk is comprehensively addressed. Equally important, macroprudential policy is no substitute for sound policies more broadly, including, in particular, strong prudential regulation and supervision, and sound macroeconomic policies. Operational independence in other policy areas, including monetary and microprudential policy, should not be undermined in the name of macroprudential policy.

To be effective, institutional arrangements for macroprudential policy need to ensure a policymaker’s ability and willingness to act—including clear mandates; control over macroprudential instruments that are commensurate with those mandates; arrangements that safeguard operational independence; and provisions to ensure accountability, supported by transparency and clear communication of decisions and decision-making processes.--INTERNATIONAL MONETARY FUND (2011) "Macroprudential Policy: An Organizing Framework [Emphasis added.--ES]

After the stagflation of the 1970s, the conventional wisdom in the 1980/90s trough the turn of the century was that central banks should be made as independent as possible from political control; this conventional wisdom was translated in high degree of operational independence in most advanced economies (see here for useful distinctions and history). Let's stipulate, for the sake of argument, that if keeping inflation low is the only/main monetary policy objective that such independence makes sense and is supported by sound empirical evidence. Even so, the two decade experiment with central bank independence has to be judged a failure, and it is distressing that the IMF is unwilling to discuss the issues frankly.

For, as the most recent financial crisis reminded us, Central Bankers have more roles than fighting inflation. They have considerable responsibility for the health of the financial system as a whole (now known as systemic risk), and they bear some non-trivial responsibility for preventing financial bubbles*--the clean-up of which is not just very expensive and painful to the economy, but also has non-trivial distributive consequences. While there is plenty of blame to go around, central banks failed to take the punchbowl away when they could; as recounted before, there was considerable cognitive regulatory capture, reliance on outdated models  (which treated mortgages as safe--this mistake was especially clear in the public utterances by the Dutch central bank director, Wellink), and a permissive attitude (enshrined in Basle agreements) toward banks' internal risk modeling (the list is longer). This is not to deny that (a) some central banks acted prudently in the run-up to the great recession [Canada's has been widely praised], and (b) some central banks performed well in the eye of the storm (in my non-expert view Bernanke did so).

Now, one may claim that politically controlled central banks would have performed just as badly. This is by no means obvious. For, while it's clear (let's stipulate) that politicians are sometimes permissive of inflation in order to nudge employment along, even this is not a universal rule given the political clout of pensioners and other people on fixed incomes not to mention creditors, all of whom dislike inflation intensely. Moreover, it is by no means obvious that they would want to risk being held responsible (even retrospectively) for the gigantic financial bail outs we have witnessed. Even if some politicians would have behaved no differently than the central bankers did, it is extremely unlikely, given the varied political conditions and coalitions in different countries/continents, that they would have acted so uniformly mistakenly as the central bankers have done. I am not claiming that politicans always get it right, but the fact of the matter is, when the central bankers screw up, as they did, the central bankers don't pay for their mistakes; it's the taxpayers that do--that is to say, the incentives are, in fact, aligned incorrectly to sustain central bank independence.

It says something of the mistrust of politicians among the intellectual, economic, and financial elite(s) that the argument(s) and observations just sketched are not being discussed more widely. (Undoubtedly I have simplified the situation and maybe I have overlooked something important.) In fact, the IMF report quoted above -- which is supposed to be a technical report not a political report -- goes out of its way to repeatedly insist, on the basis of no empirical evidence whatsoever,** that central bank independence should be sacrosanct. Obviously, if there were robust knowledge that could guide macroprudential and monetary policy, then, perhaps, one could make an argument that rule-following, public spirited experts should be entrusted with independence. But as the IMF report notes, such knowledge is as of yet unavailable. The big picture decisions of managing the financial system are, in fact, political -- because uncertain and distributive in character -- and should be made by politicians, even if some politicians prefer otherwise (so that they can never be blamed). Either way, it is by no means obvious that keeping central bankers independent promotes "accountability."

 

Dirty Hands and/or Beyond Good and Evil in the Woods of Walden

[This is the five-hundredth D&I; this post is dedicated with gratitude to my regular readers.--ES]

I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived. I did not wish to live what was not life, living is so dear; nor did I wish to practise resignation, unless it was quite necessary. I wanted to live deep and suck out all the marrow of life, to live so sturdily and Spartan-like as to put to rout all that was not life, to cut a broad swath and shave close, to drive life into a corner, and reduce it to its lowest terms, and, if it proved to be mean, why then to get the whole and genuine meanness of it, and publish its meanness to the world; or if it were sublime, to know it by experience, and be able to give a true account of it in my next excursion. For most men, it appears to me, are in a strange uncertainty about it, whether it is of the devil or of God, and have somewhat hastily concluded that it is the chief end of man here to "glorify God and enjoy him forever."--Thoreau, Walden.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness

In the quoted passage, Thoreau recognizes two axiological dimensions: (i) good (God) vs evil (devil) embraced by the many; low (mean) vs high (sublime) embraced by the elite few. Anticipating Nietzsche, Thoreau wants to reject, or at least experiment with rejecting, good and evil. For, on his view the basic human condition is uncertainty about the end of life. He suggests that the response to this uncertainty, which is exemplified by the Westminster Catechism (which Thoreau quotes here), has solidified the first axiology. He does not, however, explain what  the proper end is that belongs to the second axiology; one might wonder if it is merely the experience of the sublime, but it is clear that in a proper experiment the outcome is not fully known in advance.

Thoreau also rejects here the Socratic idea (proposed in his superior Apologia Pro Vita Sua) that philosophy is not just the study of death, but that true philosophers practice dying, (Phaedo 62-7). Or, at least, Thoreau rejects it as a settled fact; it is not obvious that it belongs in the "economy of living" which just is "philosophy." In addition, e strongly implies that the axiology of good vs evil just is life-denying (because ultimately rooted in theodicy and a belief in afterlife) and a kind of practice of resignation.* Moreover, he suggests that while there may be a right to (of) life, this is empty -- or at least merely formal -- prior to an exploration of what is, and what it is good for. 

Having said that, there is a certain doubleness in Thoreau's stance. For, he does not merely hold himself up as a more deliberate response to the uncertainty over the nature of life. He also proposes to report his findings to others. It is not fully clear that such reporting is identical to "trying the experiment of living" that he is an exemplar of. As I suggested yesterday, there is a distinction here between being a true philosopher and a true teacher, and it is not obvious that one be both. Perhaps, Thoreau implies that one can be these in successive stages.

A reader may worry that I have turned Thoreau too much into a proto-Nietzsche. This is not altogether unfair concern, but it is worth noting that the impressions offered above are to be discerned, too, in Thoreau's describes of his relationship to the polity:

One afternoon, near the end of the first summer, when I went to the village to get a shoe from the cobbler's, I was seized and put into jail, because, as I have elsewhere related, I did not pay a tax to, or recognize the authority of, the State which buys and sells men, women, and children, like cattle, at the door of its senate-house. I had gone down to the woods for other purposes. But, wherever a man goes, men will pursue and paw him with their dirty institutions, and, if they can, constrain him to belong to their desperate odd-fellow society. It is true, I might have resisted forcibly with more or less effect, might have run "amok" against society; but I preferred that society should run "amok" against me, it being the desperate party.

Thoreau's withdrawal from the polis does not originate in a political act, but does have non-trivial political consequences. His failure to pay the poll-tax -- which is simultaneously a badge of liberty [one has at least property in one's own body] and equality among the citizenry, while also being regressive and marking men as distinct from women, children, and slaves -- is consequentially a refusal to recognize an authority that facilitates the market place in human bodies; an authority that treats men unequally and denies liberty. To be clear, throughout Walden, Thoreau treats commercial life as a species of slavery, too; and so even if chattel slavery is abolished, Thoreau understand the American project as such as facilitating slavery of a different kind (mindless work; work as an end as such; etc.) 

Moreover, Thoreau suggests this problem is not just an American problem. I say this not to deny the usual thought that Thoreau's move to the pond on the 4th of July is an attempt at a spiritual re-founding and renewal of the very idea of America (which, of course, has universal aspirations). For, according to Thoreau it is a fact of human nature (or at least male nature) not just American nature that people want to make others complicit in the dirty hands of political  life ("men will pursue and paw him with their dirty institutions, and, if they can, constrain him to belong to their desperate odd-fellow society"). While the state facilitates domination and servility, none of us are allowed a refuge where are unsullied; because we are all collaborators and we have no mercy on those that try to escape it.

Finally, one may think that the proto-Nietzschean (beyond good and evil, etc.) strain discerned above is belied by the moral condemnation of the state. But the list of Thoreau's charges -- "pursue and paw," "dirty institutions," and especially the two-fold repetition of society's desperation and violent rage (amok) -- suggests that the criticism is not only or even so much ethical, but rather a noting of the state's facilitation of a permanent denial of a life-affirming, true joy and healthy sanity. Rejecting the Hobbesian dictum that the state is conducive to life and its boundaries the locus of rationality, Thoreau insists that to accept the contracted authority of the State, as constituted thus far, is an frenzied act of a kind of permanent despair, that is, the worst form of suicide.