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1. Introduction
1.1. The Paradox of Freedom
Since 1850, classical liberalism has been in
decline. Simultaneously, the social democratic mind set has been gaining
currency to the point of dominance in all Western countries characterised by
advanced civil societies. By civil society we mean an open access society, one
in which individuals and organisations are assured extensive independence from
arbitrary interference, not only by other private agents, but also from
trespass by public agents specialising in violence and governance. Civil
societies have ensured the greatest extent of personal freedom[1]
in the history of large human communities. For the last 160 years, liberty has
grown at the same time that liberal parties have been politically marginalised
compared to forces accommodating ideas and policies rejected by liberals as
statist, interventionist, paternalistic, and anti-capitalist. The paradox of
freedom, in fact, one of the paradoxes of freedom, is that we enjoy
unprecedented liberty in an age dominated by political attitudes and practices
opposed by liberals.
Put differently, freedom, the quintessential concern of liberalism, seems to have won the battle for reality, at the same time that it has lost the battle for the minds of the people. Taking the year 1850 as the baseline, a comparison of the aims of classical liberalism and those of social democracy would seem to reveal a clear victory of the liberal vision of society. The radical objectives of socialists and Marxists failed to materialise. In terms of societal reality, rather than speaking of a social democratisation of liberalism, keeping our baseline in mind, one might more properly speak of a liberalisation of social democracy. The base of social democratic policies is civil society, and civil society is squarely rooted in the elementary conditions of liberty envisioned by classical liberalism.
Put differently, freedom, the quintessential concern of liberalism, seems to have won the battle for reality, at the same time that it has lost the battle for the minds of the people. Taking the year 1850 as the baseline, a comparison of the aims of classical liberalism and those of social democracy would seem to reveal a clear victory of the liberal vision of society. The radical objectives of socialists and Marxists failed to materialise. In terms of societal reality, rather than speaking of a social democratisation of liberalism, keeping our baseline in mind, one might more properly speak of a liberalisation of social democracy. The base of social democratic policies is civil society, and civil society is squarely rooted in the elementary conditions of liberty envisioned by classical liberalism.
1.2 Scope and Intent
of Paper
In this paper, we hope to encourage research
into a number of hypotheses that attempt to explain the crisis of liberalism in
terms of
- a systematic misinterpretation of the liberal doctrine.
We shall explore why freedom may actually work
differently from what an influential brand of liberals presume. We argue that
- a tendency to misconstrue some important implications of the liberal doctrine fosters attitudes that amount to an operative decommissioning of liberalism by its very adepts, effectively bringing about a retreat from practical, result-seeking politics.
In our analysis, we are
placing special emphasis on Friedrich
Hayek’s theory of spontaneous order (SO1), which, of course, in
a broader reading, underlies the thinking of all leading classical liberals
from David Hume and Adam Smith to Herbert Spencer and Ludwig von Mises. That is
to say, these authors may not share an evolutionary account of spontaneous
order and its implications in the manner developed by Hayek, but they are all
agreed on the presence of self-generating order in the social sphere, and its
pivotal station within the liberal worldview. The difficulties revealed by our
analysis of Hayekian spontaneous order
(SO1) pertain to a larger stock of Austrian and
Austrian-inspired variants of liberalism as represented by strands of modern
libertarianism and anarcho-capitalism.
We hypothesise: the paradox of
freedom, introduced at the outset of the present paper, is indicative of
dimensions of spontaneous order not (sufficiently) taken into account in
Austrian thought or in kindred readings of liberalism. As a result, there is a
propensity to misjudge
·
vital parameters of human and social action,
·
the scope and nature of liberty in the real world, and
a consequent reluctance to
·
(a) participate in politics and (b) shape the state
that debilitates liberalism as a force of practical impact, plunging it into a
lasting crisis of insignificance.
In the conclusion to our
paper, we suggest avenues for the reinvigoration of liberalism and summarise
hypotheses that might define a worthwhile research programme concerning the
role of freedom, her agents, and her theoretical representations in the
contemporary world.
1.3 Hayekian
Spontaneous Order – the Importance of the Concept of Self-generating Order in
the Liberal Worldview
According to Hayek, the paradigm of
evolutionary growth was first discovered by scholars investigating social
phenomena like money, language, morality, law or the economy. Darwin, surmises Hayek[2],
was inspired by this new approach pioneered in the social sciences. The
discovery of the evolutionary paradigm by “Darwinians before Darwin” has huge policy implications for
liberalism, which emerges since the 18th century as a political
force attempting to prevent government from using its soaring power in ways
detrimental to the ecological, i.e. self-sustaining order of autonomously
acting human beings engaging in voluntary and mutually beneficial transactions
in free markets. Thus, liberalism was born the political twin of a heuristic
novelty – evolutionary thinking - that enables man to perceive and analyse
(i) self-generating order,
(ii) order of a complexity too high
to be attained by conscious design as in building a mechanism that is fully
determined by human volition,
(iii) social order that is not
man-made.
The modern economy is the best studied case of
a spontaneous order, conjectures Hayek, who in studying the subject-matter has
made vital contributions to economics and the neurosciences, and in particular
to understanding the role of the individual, decentralised information, and
rules-based, as opposed to commandeered, order in modern economic life. In
exploring the working of self-generating order, mostly in the area of
economics, Hayek has also provided insights into the logic of freedom, by
creating awareness of incentives and methods apt to make human beings not only
independent from the tutelage of commanding authorities, but also more peaceful
and productive by virtue of greater personal autonomy.
1.4 Shortcomings of
Hayek’s Truncated Theory of Spontaneous Order
Hayek tends to apply the term spontaneous order or extended order to refer to an order that
meets with his approval. Spontaneous order not only becomes a term with
normative overtones of endorsement and even admiration, the phenomenon itself
is never broken down to the operative levels of evolutionary processes that
reveal turmoil, inefficiency and failure or other unpalatable outcomes
frequently associated with natural growth. His use of the term is akin to
asserting categorically “nature is good,” when disease and pain are also part
of that sphere. A distinction is missing.
Inherent in Hayek’s systematically affirmative
use of the term is an insinuation of determinism: leave matters to the
spontaneous order and we shall be sure of beneficial outcomes. No allowance is
made for indeterminacy of outcome, especially ambivalent or dysfunctional
outcome in a properly operating spontaneous order, that is: one that is not
being interfered with. There is at least the tacit implication that a society
embedded in such a spontaneous order is void of serious conflict.
2. Three Aspects of
Hayek’s Truncated Account of Spontaneous Order
Hayek’s presentation of spontaneous order
re-enacts a cardinal defect in liberalism, in so far as it conceives of society
consistently on too high a level of abstraction, without concern for insights
available from lower levels of abstraction.
2.1 The First Aspect
of Truncation – Misplaced Abstractness and Disregard of “Intermediary Conditions”
In an ideological system, typically certain
principles are matched with consequences expected to ensue from the application
of the antecedent basic premises: abolition of private property and
establishment of the dictatorship of the proletariat (antecedents) must lead to
the withering away of the state and harmonious human interaction under
communism (consequences). Whether the predicted relation of premises and
outcomes will actually come about depends on what we shall refer to as
“intermediary conditions”. These are situated on a lower level of abstraction
and tend to be heavily saturated with empirical content. A theory that ignores
“intermediary conditions” can thereby insulate itself from testability and
serve as an immunised creed to those wishing to invest faith in it.
We shall argue that Hayek’s conception of spontaneous order (SO1)
suffers from insufficient consideration of intermediary
conditions, leaving out the process of selection by intermediary
conditions, which intervene to structure and determine the relationship between
liberal principles and the set of feasible outcomes into which they may or may
not be translated. Most notably, Hayek’s theory settles on too high a level of
abstraction in that it treats conscious
design as a rival, a mutually exclusive alternative to a spontaneous order.
While conflict between conscious design
and spontaneous order represents an
important special case, in the Hayekian perspective, conscious design is hardly examined in its non-problematic and
indeed conducive functions that are revealed on lower levels of abstraction.
2.2 The Second Aspect
of Truncation – the “Economistic” Preconception:
Hayek rightly underlines that understanding the
logic of free markets requires analysis on a very high level of abstraction.
For the purposes of understanding the spontaneous order of a modern economy, it
is indispensable and mostly appropriate to theorize with little regard for the
lower levels of detailed concreteness. Unfortunately, Hayek transfers two
features successfully applied in investigating the spontaneous order of the economy (SO1) to the analysis
of social order at large:
- a high level of abstraction that is not applicable to vital aspects of other social phenomena constituting a complete social order, and
- the more or less tacit assumption that the spontaneous order of a modern economy (SO1) may serve as the paradigm for understanding social order in its totality, as well as providing a blueprint for a society that accords with the principles of liberalism.
The “economistic” fallacy underlying Hayek’s conception of spontaneous order (SO1)
encourages him to insinuate that the economy is capable of performing the tasks
of the political order. Bilaterally voluntary and mutually beneficial
transactions as characteristic of free markets are considered capable of
replacing the dealings of a politicised world. However, adopting this view is
to blind out the crucial fact that the economy is a derivative of the political
order, free markets being incapable of creating their own preconditions,
depending instead for their existence on a politically implemented framework
that is permanently contested and reshaped by political agents.
2.2.1 Ignoring the
Reality of the Mixed System
An approach very pronounced in von Mises, Hayek
too tends to reduce contemporary economic systems to a dichotomy between
socialism and capitalism, suggesting that interventionist tendencies are likely
to lead to full blown socialism. Again, a consequence of too high a level of
abstraction and the attendant disregard of intermediary conditions, Hayek shows
little concern for the real economy as embedded in a broader cultural, social,
and political context. He does not offer a theory of the mixed economy. He
develops powerful insights into some of the crucial conditions of wealth
creation in an economy, exploring especially the role of competition and
information, which, however, is not the same as accounting for an economy being
embedded in and interacting with society at large.
Almost furtively, von Mises admits that there
never has been anything like pure capitalism, never has man known anything but
a mixed system[3]; yet there is no Austrian
theory of how a mixed system works; instead von Mises and Hayek are almost
exclusively preoccupied with the pure standard and criticisms of deviations
from that standard. There is no accounting for the permanence of composite
economic reality. Instead, there is a strong insinuation that perfect
capitalism is what we ought to achieve – especially in the negative, by
rejecting certain undesirable features of a mixed system, with no recognition
that we will always have to get along in a world that cannot be expected to achieve
perfection and purity.
2.3 The Third Aspect
of Truncation – Disregard for Special Characteristics of the Spontaneous Order
of Politics and the State:
An advanced theory of the mixed economy is not
likely to be forthcoming in an author who does not place politics and the state
within the purview of spontaneous order. In Hayek, politics and the state appear as exogenous forces threatening to
disbalance the naturally salubrious processes of a spontaneous order.
Indubitably, a spontaneous order such as a
modern capitalist economy may be jeopardised by influences from the sphere of politics and the state; but this does
not preclude that politics and the state
as well as their interaction with markets may themselves represent an extended
order shaped by spontaneous forces. Hayek does not seem to have room for such
considerations, an attitude entailing momentous consequences for his theory of
freedom.
There is a tendency in authors arguing in the
Hayekian vein to classify the economic realm as a sphere of proper and
conducive behaviour, whereas politics is perceived to be naturally tarnished by
coercion and corruption. The progress toward a liberal society is being
conceived of as diminishing the tarnished realm and moving away from it toward
a thoroughly depoliticised spontaneous order.
What seems to be insufficiently appreciated is
that (a) the economic realm is not free from defects and coercion – after all
contractual arrangements may stipulate coercive provisos, say, between
disciplinarian and subordinate employees ‑, and (b) free, competitive markets
resemble a system of coercion regulated to support highly productive outcomes,
which in large measure hinge on the destruction of the material base of
competitors or others affected by “creative destruction.” More important for
our purposes, (c) the economic realm is fundamentally dependent on a coercive
framework of enforcement, which it cannot bring forth of its own accord and
nature. The spontaneous order of the
economic sphere (SO1) is a derivative of the spontaneous order of politics and the state
(SO2).
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