The Relevance of Adam Smith

Primary version of this post, with visual content, at Barry Stocker’s Weblog

I’m retuning to the issue of interpreting Adam Smith, which I referred to when posting in the Manchester Metropolitan University Workshops in Political Theory two days ago, I had hoped to post on Adam Smith yesterday. As I indicated two days ago, there was a paper on Adam Smith I found very unsatisfying. I made some comments on the paper but was only able to mention a few of the problems I found with the paper, and as far as I can see it other people in the workshop made the same criticisms after I spoke, but in less direct ways. I found the paper disappointing, but useful, in making a standard series of errors about Adam Smith which are typical of one kind of left-inclined commentators. I am going to summarise this as briefly as possible, and referring as much as possible to the very obvious mistakes, rather than the more subtle problems that will arise in any interpretative work. At the bottom I refer to what I think was good in that paper.

Mistake One

Adam Smith was not an original thinker, because a lot of what he said had been said by other people before.

Reply.

All great thinkers are preceded by various people who express parts of what appear’s in that thinker’s work. The achievement of major original thinkers, like Smith, is to integrate a wide range of previous work on the topic, adding some new thoughts along with grasping links and contradictions which appear when integrating everything. Just about everyone agrees that Smith produced a great original classic: An Inquiry into the Nature and Causes of the Wealth of Nations.

Mistake Two

Adam Smith is not relevant to current economics, and we know this because Mil refers to Smith’s work as partly obsolete and imperfect everywhere (in The Principles of Political Economy). Another supporting argument was that An Inquiry into the Nature and Causes of the Wealth of Nations covers a wider range of material than current economics and is therefore irrelevant to current economics.

Reply.

Most economists continue to refer to Smith as the founder of the discipline and refer to his ideas.

Miill’s comments are a statement of the obvious: any book on economics becomes increasingly obsolete over time because of new developments in the discipline and changing economic circumstances. However, economists continue to use use ideas from Smith and his earlier successors, particularly David Ricardo and Karl Marx. Smith’s relevance compared with Marx has clearly increased in most people’s minds since the 1970s.

Recent economists, most notably the Nobel Prize winner, Gary Beck, have been very interested in taking economics into the territory of psychology, anthropology and sociology. This means that recent economists have written about things like the history of religion, and the development of social ethics, discussed by Smith in Wealth of Nations.

Mistake Three

Adam Smith regards value and wealth as essentially the produce of agricultural labour, and regards industrial production and trade as less valuable.

Reply.

As others pointed out in the workshop, Smith thought that agriculture was more productive only in the sense that it requires less capital (though of course this has changed over time).

There is a confusion in what the speaker said between Smith and the Physiocrats the French economic school which included Turgot, Quesnay, and Mirabeau the Elder. The Physiocrats opposed Mercantilist restrictions on trade and thought all economic value comes from land. Smith clearly rejects their emphasis on land, even if by later standards, he exaggerates the role of agriculture. The slightly more subtle mistake the speaker was making here, was to confuse Smith’s emphasis on natural stages of development with a critique of wealth from industrial production and trade. As I suggested in a post on August 16th, Smith was tied to a teleological way of thinking in which nature and society unfold in necessary steps, a way of thinking which was not throughly challenged until the late 19th Century. The result of this is that he is disturbed when agricultural wealth is stimulated by towns, though even this is ambiguous since in some passages he refers approvingly to the ways in which urban wealth increases agricultural wealth.

Mistake Four

Smith was a left-wing, therefore anti-free market thinker because he opposed Mercantilism.

Reply.

Im extrapolating a bit here, but that seems to be the only way of understanding the way the speaker framed criticisms of Mercantilism. Mercantilism refers to the belief that the world contains a finite amount of wealth, particularly in god, and that trade between states is a way in which one country takes wealth from another. Imports are to be discouraged because paying for them causes wealth to leave the country, and exports are to be discouraged where it means that objects of value are leaving the country. Mercantilist policies were tied to the aristocratic and monarchic states of the time, and Smith criticises those states. The speaker used a slippage between criticising those states and criticising capitalism.

Mistake Five.

Smith did not approve of capitalism because there was less of it in his time and the word did not exist.

Reply.

The fact he word ‘capitalism’ did not exist is irrelevant and it is a feeble rhetorical trick to suggest it is relevant. Clearly Smith wanted to see more and more of what we now call capitalism.

Mistake six

Smith did not opposed socialism because the word did not exist.

Reply.

Again a feeble rhetorical manipulation. Smith opposed what we now call socialism, when he supported the sanctity of private property and opposed most forms of intervention in the economy.

Mistake Seven

Smith was like left-wingers now because his ideas were taken up by late 18th and early 19th century radicals and labour movements, including many French revolutionaries, so by people opposed to monarchical and aristocratic privilege.

Reply.

Left used to refer to people who though allocation of resources was better done by markets than by the state, this has nothing to do with the current socialist left, or even social democrats. Labour representative were concerned with forms of state intervention which held down wages, prevent labour from organising, and pushed up the price of basic items in the budget of labourers. Again these are different from the major aims of the current left. Left wing people in power, or even conservative states trying to accommodate working class demands, moved the issue away from cutting down that state to expanding the state as a means of regulating the economy and redistributing wealth.

Mistake Eight

Free marketers now support state interventionism and therefore contradict Smith’s demands for a less statism.

Reply.

This contradicts other comments the speaker made. It is simply not true that current free marketeers accept existing state interventionism. I drew the attention of the speaker to libertarian thinkers who oppose the privileged relations between corporations and the state. The speaker started stonewalling and trying to change the subject to how libertarianism used to refer to left wing positions, an obvious sign that he could not back up his argument. I insisted on pointing out that free market thinkers like Hayek, Mises and Friedman, and organisations using their views, are extremely critical of links between corporations and the state, including the use of war in promoting sectional economic interests.

Mistake Nine

The speaker clearly though the Thatcher and Reagan governments, and other ‘free market’ governments since represent the most radical forms of free market thinking.

Reply

Reagan and Thatcher get some support from free market thinkers for some of their economic policies. They are also strongly criticised for leaving the essence of the interventionist state in place, and for continuing state support for favoured economic enterprises.

Mistake Ten

The speaker claimed that books IV and V of An Inquiry into the Nature and Causes of the Wealth of Nations justify levels of state interventionism and social welfarism in contradiction with current free marketeers.

Reply.

This is true in reference to anarcho-capitalists like Murray Rothbard and Hans-Hermann Hoppe, or minarchists (night watchman state) like Ludwig von Mises and Robert Nozick. It is not true with reference to Friedrich Hayek or Milton Friedman who are considerably more influential than the minarchists and anarcho-capitalists. The speaker clearly thought Friedman was less interventionist and welfarist than Smith. So what is the interventionism that the speaker alluded to in Smith. Books IV and V of The Wealth of Nations are concerned with: reducing ways in which states have limited trade and taken private property from subjects; expanding education, which should be mostly provided privately with the state supporting the poorest; raising revenue from taxes on consumption; protecting trade outposts fro violence through state military support. This is definitely a very limited role for the state, and certainly goes no further in that direction than Hayek or Friedman.

Mistake Eleven

The speaker said that Smith would be against free markets now because he takes the side of labourers.

Reply.

Smith takes the side of labourers in preferring low taxes on necessary goods, and in allowing labourers to seek the highest possible wages by removing barriers to competition between labourers and between companies when they are hiring labourers. Clearly this has nothing to do with being against free markets and capitalism.

Mistake Twelve

The speaker appeared to think that the discussion of negative and positive liberty comes from Isaiah Berlin, in his 1969 essay, ‘Two Concepts of Liberty’. That is the distinction between liberty from state compulsion and the liberty that arises from state action to expand human capacities.

Reply

I believe Isaiah Berlin’s essay to be highly overrated, its greatest virtue is to draw readers back to important late 18th and early 19th century discussions of liberty. At this time, Kant referred to negative and positive freedom in ethics; Wilhelm von Humboldt referred to negative and positive welfare; Benjamin Constant referred to the liberty of the moderns and the ancients. These all refer to the negative/positive liberty type distinction, though in Kant it’s a distinction about the relation of reason to action. These discussions are anticipated by what Hobbes and then Montesquieu have to say about the kinds of liberty which exist in different ancient and modern states.

Mistake Thirteen

Takes us back to mistake two. The speaker seemed to think that Smith’ status as a Professor of Moral Philosophy and the broad range of topics he lectured and wrote on undermines his place as an economist and free marketeer.

Reply.

The speaker seems to assume that economics is only about prices, when it is about more general questions of ranking choices in individual and social action, which connect with questions of law, ethics etc that Smith was also concerned with. The speaker claimed that An Inquiry into the Nature and Causes of the Wealth of Nations was a wok of moral inquiry. In some ways it is, which in no way contradicts its status as a work of economics. The speaker appears to be making the absurd assumption that one cannot be simultaneously concerned with ethics and with issues of choice, and preference, which are often expressed in terms of prices within a monetised economy.

Mistake Fourteen

The speaker assumed some contradiction between: Aristotelian elements in Smith like a concern with standards of value, and teleology (the end towards something is moving); and free market capitalist thinking.

Reply.

The speaker exaggerates the Aristotelian elements in Smith. Unlike Aristotle, Smith was not concerned with determining a real value and excluding price variations, and he was certainly not supporting the limits in economic inequality (between citizens) proposed by Aristotle. Smith cannot both be strongly teleological in thinking, therefore seeing natural inevitability in the movement from land to city to trade, and believe that movement away from agricultural wealth is bad. Smith sometimes seems inclined to weak versions of those propositions, making it possible to refer to a tension perhaps, but the speaker referred to both propositions in a very strong way without noting the problem.

Generally Badly Formed Argument

Some of this is covered above, as when the speaker implies that Smith is left wing in the current sense by referring to the links between Smith and non-socialist radicals of the original left.

A really obvious problem is that the speaker claimed that Smith would be against capitalism as it is now and that he is irrelevant.

If Smith is irrelevant, his supposed arguments against capitalism must be irrelevant.

The speaker condemned current free markets while saying there are no free markets.

USEFUL POINTS

As I have already noted, the speaker drew attention to the way early radicals like Mary Wollstonecraft, William Godwin and Jeremy Bentham, used Smith’s ideas. I have already stated what I think is wrong with taking this as a reason for thinking Smith can be connected with socialist though. When they do lean towards a redistribution of wealth they are going beyond Smith.

The speaker referred to liberty in Smith as independence rather than as the ‘negative liberty’ or freedom from external compulsion. We might wander how much difference there is between the two and the speaker did not express this potentially useful thought clearly. If we clarify the thought, the point is that Smith was concerned with more than just leaving people alone but also with promoting the virtue that will enable the best possible use of that liberty in a spirt of general independence of mind. As I suggested in a post of 22nd August, this does bring Smith close to classical republican thinking which values political participation, rather than the more anti-political individualism of a lot of current libertarian thinking. On the other hand, individualistic liberalism and republicanism are widely recognised to have been combined in a variety of thinkers from Locke to Mill. I agree that it is unfortunate that current libertarians tend to ignore this. Gerald Gaus provides an interesting and valuable exception.

Foucault, Libertarianism and Europe

Primary version of this post, with visual content, at Barry Stocker’s Weblog

I’ve pasted in a conference abstract below. It’s an expanded version for the conference book of abstracts and serves as a summary of themes I am interested in around liberal political philosophy, European identity and politics.

‘Political Theory and the End of Europe: Foucault against Habermas’

I’ve taken the opportunity to look at Habermas’ status as a philosopher of the European idea, examine his political concepts critically and take up Foucault from a Classical Libertarian political point of view. Thee Foucault versus Habermas debate is well established, but the the best of my knowledge no one has looked at them in these terms before. I’ll look at how the anarcho-conservative Hoppe takes up Habermas, and the areas of difficulty that suggests in Habermas’ progressive liberal-Marxist synthesis; and look at Foucault’s relation to Antique Republican and Classical Liberal ideas in his later texts. This is in the cause of suggesting that Foucault provides a better basis for European political integration, because it is less reliant on ideal harmonisation than Habermas.

The conference is Beyond Boundaries: Media, Culture and Identity in Europe, hosted by Bahçeşehir University in Istanbul, 2nd to 3rd October 2009. The conference is supported by an EU funded project run by Bahçeşehir University, University of Potsdam, and the University of Applied Sciences, Potsdam.

Jürgen Habermas is almost the uncrowned Philosopher Prince of the emergent European polity (the European Union, and more loosely the Council of Europe, with the EU as its ‘hard core’); and its cultural and media ecology. Habermas’ analysis of deliberative democracy, and cosmopolitanism, is of obvious relevance in constructing a European polity; and is embedded in theories of discourse ethics and communicative action which provide strong, ethical, and epistemological context for his political theories. Habermas tries to overcome two polarities: hierarchy of the political system versus democratic participation; individual rights versus economic egalitarianism. He works on this through notions of ethics, and rationality, in which it is assumed that both lead the individual to act according to the rules of the public sphere and a cosmopolitan political order. Habermas is sometimes troubled by the relation between the consensual aspect of the state and its more coercive ‘steering aspect’; and the difficulties of instituting democratic, and legal, accountability for the complex bureaucracy, which administers the social state through administrative orders, rather than to democratic political decisions, or court judgements, in accordance with legal norms. Habermas’ analysis also, more indirectly, suggests a problem with harmonising democratic decision with the power of judges in a law governed democracy. These tensions in Habermas’ work find expression in the work of Han-Hermann Hoppe, who wrote his doctorate with Habermas, but has since turned discourse ethics into a foundation for a ‘propertarian’ anarcho-conservative position. Without endorsing Hoppe’s position, it does give a very useful indication of how Habermas touches on areas of concern to Classical Liberal and (free market) Libertarian thought. Foucault’s thought is better adapted to these problems. From Society Must be Defended onwards, Foucault distinguishes between the more despotic forms of power and the more limited form of power; between absolutism, or totalitarianism, and govermentality. The idea of governmentality is not the idea of a perfect liberal consensus based on government by consent; it is investigated itself with regard to attacks on the body in biopower and disciplinarity (power over life and death; imposition of regularised activity). Foucault’s approach to liberal government is highly critical, but his analyses of political and ethical thought, and practices, since Antiquity, strongly suggest that he finds individualistic liberty, market economics and limited government to be the best possible counter to the most coercive aspects of power. Comments by associates like Jacques Donzelot on Foucault’s later thought, and the social theory of associates like François Ewald, confirm the impression that Foucault was aiming for balance of individualistic market liberalism, and welfarism. His late comments on Austrian School free market economics, certainly suggest Classical Liberal, and Libertarian, sympathies. The cultural, and media, legitimacy of the emergent European polity can be best elaborated through this kind of analysis, which address those aspects of trans-national European sovereignty which cause most disturbance to critics of European integration. Foucault allows us to avoid the utopian dream of a seamless relation between individualism and collective welfare, between democratic participation and political hierarchy, because he sees legal sovereignty and coercive power, autonomy and mastery as intertwined, in an unavoidable paradox. This establishes a way of thinking in which European sovereignty, including its cultural, and media context, can be both affirmed and seen as in need of restraint, and dispersion. Though Foucault did not directly address issues of the emergent European polity, his later texts are deeply concerned with pan-European ideas of sovereignty and government, including the way that modern European nations emerged as fragments of Roman sovereignty, which they saw themselves as preserving.

Link of the Day: ‘Liberaltarianism’ Debate

Primary version of this post, with visual content, at Barry Stocker’s Weblog.

bloggingheads.tv. Angry Crazy People, with Mark Kleiman and Brink Lindsey.

The title of this webcast is rather misleading. It refers to just one segment of the discussion, where Kleiman and Lindsey compare right-wingers who think Obama was born outside the USA, and disrupt town hall meetings on health policy, with left-wingers who think Bush organised the 9/11 attacks. It turns out that Angry Crazy Right-wing people are concentrated among southern whites, suggesting there is a racial component but it would be wrong to say that is the only component.

Lindsey is a libertarian, who invented the idea of ‘liberaltarians’ in a 2006 essay for the left leaning magazine The New Republic, and now available at the libertarian (leaning to libertarian-conservative fusionism) Cato Institute website. Lindsey was arguing, and still argues that libertarians and liberals, in the American post New Deal social democratic sense, can find common cause around the renewal of liberalism in its original meaning. Lindsey argues in the webcast, and elsewhere, that libertarians should give up on a state that only forces contracts and property rights, accepting a broader notion of public goods including some welfarism ; (left-)liberals should accept a smaller more efficient state to deliver those goods, in a more individualistic spirit.

As is pointed out in the webcast, this has not become a big movement, but as Lindsey points out, there’s big group of fiscal conservatives-social liberals in the middle ground of American politics who could open to ‘liberaltarianism’, As Lindsay concedes, fiscal conservatism is pursued by social conservatives in the Republican Party, while social liberalism is pursued by statists in the Democratic Party, squeezing out a possible fiscal conservative-social liberal liberaltarian movement.

Kleiman is one o Lindsey’s (left-)liberal interlocutors, open to market based solutions to social problems. He is a public policy academic at UCLA and Harvard, with many links to the world of politics.

They debate copyright and intellectual property in the light of file sharing of music; carbon tax and cap and trade in relation to global warning; liberalising regulation of legal, and illegal drugs, while taxing them more; the public choice part of Obama’s health policy proposals; financing of Medicare (public federal health care for the retired).

How did Kant come to be taken as Anti-Liberal?

Primary version of this post, with visual content, at Barry Stocker’s Weblog.

I mentioned the question of Kant and liberalism in yesterday’s post on ‘Liberating Republicanism’. I think it merits more investigation. Kant is clearly not always taken as anti-liberal (taking liberalism to mean classical liberalism). It might seem obvious that Kant is liberal, since his writings on ethics, law, and politics indicate the following core liberal ideas.

The primacy of the individual.

The autonomy of the individual.

The right to have property, of any extent.

The rule of law.

The progressive force of free trade and market based economies.

The importance of limiting and balancing power in the state, largely through a division between the law making power and the executive power.

The danger of unrestricted democracy, which for Kant would mean that the executive power is the same as the law making power, and both are democratic.

The value of peace between nations.

The value of a federal/confederal agency to enforce peace between nations.

So where does all these anti-liberal Kant assumptions come from? Most obviously in two groups of people: post-modern/post-Marxist political thinkers, particularly the Cosmopolitics crowd; the most purist market libertarians, I take Kant to be highly compatible with moderate market libertarianism . They are wrong, but they are not just being stupid. One part of it is that they over focusing on some passages, some aspect and not putting it in the context of the whole; one part is that they need to define their position by making an opposition between Kant and liberalism.

What aspects of Kant are they focusing on, in an imbalanced way?

1. Kant emphasises a transcendental power of the productive imagination, which for some people can be linked with the labour theory of value in Marx, and Marx’s general tendency to elevate the producer as labourer.

2. Kant’s enthusiasm for Rousseau, While I strongly resist attempts to turn Rousseau into the original totalitarian, I think just about everyone can agree he was not a liberal or libertarian of the free market individualistic kind.

3 .Kant’s references to positive freedom and therefore perfectionism. Positive

freedom in Kant means using our innate freedom not only to obey moral law, put to follow it it a very strong way so that we are perfecting ourselves. I don’t see that as anti-liberal, but since Humboldt talked about negative and positive welfare in The Limits of Stare Actions, there has been a tendency to see a social ethic based on a collective responsibility greater than mere obedience to law as threatening to purist liberalism. It can be threatening to freedom, but it does not have to be, if we understand it as a mixture of purely voluntary action and the steps the state takes to promote the values of individual freedom and political decision making through democratic institutions.

4. Kant emphasises a transcendental unity, and purpose, of humanity or of the republic.

5. Kant is placing some limit on national sovereignty and the interaction of states in his cosmopolitanism.

6. Kant emphasises an ethical foundation for law, the state, cosmopolitanism, public right, cosmopolitan right, which might seem to reduce the possibilities of self-interested actions by individuals in the private sphere.

In 3., I get at some of the issues around reading Kant the wrong way. If you believe that either the state is purely an agency for upholding contracts, property rights, and free trade; or that everything, or a very large proportion, in property/welfare distribution should be decided through democratic majorities in the public sphere, with nations to be similarly bound by some kind of transnational decision making body, then this makes sense.

We do not have to make this either/or choice. I just don’t believe either choice has been put into practice, or ever could be. We could regard them as useful extremes between which to define a range of positions, which is OK so long as we do not conceive that as distribution along a single line. For example, a stronger public sphere of law making could be more beneficial to private property than a weak, or non-existent public sphere, and that has often proved to be the case, in practice.

Liberating Republicanism

Primary version of this post, with visual content, at Barry Stocker’s Weblog

What do I mean by liberating Republicanism? A few things.

I mean liberating Machiavelli the Republican theorist from the crass parody of him as an opportunistic servant of tyrants, a cynical engineer of despotism, even a version of the devil. Here I can only say, read The Discources, then read or reread ,The Prince. If you think you know Machiavelli, but you haven’t done this, you are very mistaken.

Republicanism is a theory of freedom. A theory in which the state is limited and upholds liberties, but also a theory in which freedom in a society is enhanced by political participation and political rights, by the existence of a political sphere. As Machiavelli notes, there is lot of self-interest at work in that sphere; as Machiavelli also noted, given good Republican institutions that self-interest can be turned into a freedom enhancing struggle for relative prestige. So Republicanism is something liberating.

On the whole Republican theorists have been concerned with the protection of individual rights, including property rights, from the state and from the more extreme decisions of temporary majorities. The two main exceptions are Spinoza and Rousseau, though I wouldn’t want to go down the sad and sorry road of blaming Rousseau for everything bad in politics since the Jacobin Terror, and there are certainly things a Republican concerned with individual rights can learn from those two. On the other side, we have Aristotle, Cicero, Machiavelli, Harrington, Sydney, and Kant, as the clearest examples, I would also add Locke, Montesquieu, Smith, Jefferson, Madison, Alexis de Tocqueville and John Stuart Mill.

The obvious thing about that last list above is these are people often listed as Classical Liberals. I think it bizarre that Kant is often not listed among the Classical Liberals, but more on him a bit later. Current Libertarian thinking tends to take those Classical Liberals as all united by a view of individuals and their property as absolute self-contained capsules. On this basis, voluntary contracts and exchanges between individuals are regarded as the only legitimate social relation. The political sphere is seen as valueless in comparison, and at best something to be tolerated as a necessary evil.

This view is most strong in the United States, and is tied up with a disguised nationalism in which it is presumed that the US Constitution rests on the same assumptions. As even some hard core libertarians have acknowledged, this is not a realistic presentation of the US Constitution, or the people associated with its political and intellectual origins (Jefferson and Madison, we could also add Montesquieu and Locke as ghostly intellectual presences). Indeed the most hard core libertarians, particularly the minarchists and the anarcho-capitalists, are bound to concede this if they are at all honest. There is no way that the Constitution presents a night watchman theory of the state, and how could it be am anarchist document?

An honest approach would lead to dumping claim to the thinkers I listed from Locke to Mill, except with regard to particular passages and aspects, which are compatible with hard core libertarianism. I have addressed this recently with regard to readings of Locke and Étienne de La Boétie.

The earliest thinker who really fits in with hard core libertarian thought is Wilhelm von Humboldt (1767-1835) in Limits of State Action, but even Humboldt didn’t follow the prescriptions of the book as a Prussian education minister. The next proto-hard core libertarian thinker is Frédéric Bastiat (1801-1850), a notable economic thinker. A really admirable and sometimes funny writer in the advantages of markets. I would say the same, as I would say about various libertarian economists since Hayek, great economic ideas, how very unfortunate that the view of politics and political liberties is so dismissive.

The intermediate step there is that economic ideas, which are great for explaining how social rationality emerges from free economic decision of individuals, are not so great for dealing with situations where the good is intrinsically collective, whether it’s transport planning or building a constitution. Both of those can, and should be, informed by market thinking, but the market cannot create a decision about whether or not to route a road somewhere, or what the voting system should be. In principle a non-state agency formed by economic agents could have the power to route roads, but then that would not be operating as a purely economic agent and would have acquired a political quasi-state role, and we’d have to ask who gave it this power and excluded other claimants.

One part of this is about showing that Republicanism promotes liberty. Another part of this is about showing that the Republican element in various Classical Liberal thinkers should be liberated from a large part of libertarian thinking. Another part of this is about showing how libertarianism needs to be liberated from the worst aspects of libertarianism. The last part is about liberating Republicanism from left-liberals, social democrats, and socialists.

Republicanism is big in political theory now, but not with people who aim to find some way of combining political culture with property owning individualism. It has become socialism for a period in which the idea has lost a lot of its force. On the political level, Republicanism has been picked up by Demos (a New Labour linked think tank in Britain, founded originally by hyper revisionist Marxists) and the Spanish Socialist Party, and probably some other left leaning groups and parties.

On the theoretical level, the most influential people are Philip Pettit and Quentin Skinner. We could also mention J.G.A. Pocock who preceded them with important studies of Early Modern Republicanism, but we’ll leave him aside in this context, Pettit’s idea of Republicanism is very much in the tradition of the egalitarian liberalism of John Rawls, but wishing to add more something, that is a right of non-domination which is one way of describing the idea of Republican self-government. But Pettit’s interest is in egalitarianism, of a kind which does not look very compatible with the kind of property rights and individualism of concern to Montesquieu and Locke. He has very little to say about political process and political culture, Skinner’s work is mostly on Early Modern political thought. Where he writes about the 19th Century, he produces a contrast between ‘Neo-Roman Liberty’ and liberalism of a kind which would leave us unable to account for a figure like J.S. Mill who believed in civic virtues as well as individual rights.

The left leaning use of Republicanism goes even further with Michael Hardt and Antonio Negri where it has become a part of neo-Marxism, drawing on Spinoza, Jefferson, Machiavelli etc. For Hardt and Negri, Republicanism itself is not the answer, but the proper reading of it as the precursor of some transformed version of Marism and communism for the present age. This picks up on well established tradition of seeing Kant as the precursor of Marx, not as a whole but through the reading into Kant’s ideas of transcendental production and unity, of a prefiguring of Marx’s ideal of an emancipated community. There is a whole current of cosmipolitics around in post-Marxist post-Modern political theory, which interprets Kant’s ideas about world federation as fitting into that frame. I’ve even heard these people use Kant as what they regard as an alternative to liberalism and a critic of it.

This kind of reading of Kant can be found in Ludwig von Mises (1881-1973) in Socialism, Mises is one of the inspirers of current libertarianism, a free market economist who interpreted liberalism as being about property rights in the most non-political, and even, anti-political way. Kant’s tendencies to talk about a kind of transcendental unity of humanity and history, are interpreted by Mises as socialist, proto-Marxist talk. This is bizarre, Kant is clear enough about property rights, the division of powers, the danger of unrestrained majoritarianism, the role of commerce. Why should Mises and the Neo-Marxists want to agree on reading Kant this way? Kant who thought labourers should be be excluded from the franchise? It suited Mises to turn against anything which shows Classical Liberalism gave value to the political sphere, that Classical Liberalism overlaps with Republicanism. It suits the Po-Mo left (in between mangling Foucault) to find a thinker about the political sphere against a liberalism they have parodied as Mises type anti-political libertarianism. An extraordinary alliance.

Maybe the phrase Libertarian Republicanism could provide a better approach.

How Locke uses Money to Solve the Land Problem

In chapter 5 of his Essay on Civil Government, ‘Of Property’ Locke famously refers to property as emerging from the land mingled with labour. Presumably he would have been rather startled to find that one line of interpretation of that remark leads to Marx’s labour theory of value. What he says about property is certainly very influential. In one aspect, it is an early sketch for political economy, some of what he says anticipates Adam Smith, particularly with regard to currency and trade, and that would be because Smith had read Locke, though he had other sources for those ideas as well.

A major issue is the way land is turned into property, beyond that moment of labouring on the land. At first Locke seems to be relying on the idea that land is infinitely available, and there’s no need to worry about someone having a lot because there’s always more land somewhere. In the end, that somewhere is America, Locke being sadly careless about the rights of existing inhabitants, but he was far from the only one. America made a deep impression on Locke, he did remember Native Americans when claiming that their political structures confirmed his idea of a compact (i.e. contract) at the foundation of political society. The emptiness comes back when he refers to the right to withdraw from a political society and to go elsewhere to help form a new political society with better rules, he is certainly thinking of the New World as the place for that.

Land clearly has some limits. How have those who claim to be heirs of Locke reacted to that in recent years? The most famous ‘libertarian’ would be heir to Locke was Robert Nozick, in his book Anarchy, State and Utopia. As far as Nozick is concerned, land running out is not a problem. The only issues are to do with freedom of contract and markets. Nozick refers to a ‘Lockean proviso’ that taking land should not harm anyone and comes to the conclusion that no harm is done by accumulating land of everyone is still free to buy and sell in an open market, and presuming we are not in some highly unusual situation like a small desert island where one person controls the only fresh water supply. The Lockean proviso is therefore irrelevant outside such peculiar circumstances.

There is a ‘left-libertarian’ response from Michael Sandel in Libertarianism without Inequality, which is that Nozick’s ‘Lockean proviso’ is to weak to capture what is in Locke’s original intuition. This leads Sandel to argue that property should be distributed, and redistributed, so that everyone starts with an equal amount at birth, and that would largely eliminate the need for a complex tax and benefit system administered by a large state apparatus to achieve egalitarian goals. A variation on that is the argument stemming from Henry George for a land value tax, which would be a rent on the collective good of land, and which would pay for basic public goods (things everyone benefits from like freely provided police services). These are attempts to have libertarianism, a minimal state, combined with economic equality.

Strangely both sides of the argument have overlooked the way Locke develops the argument from paragraph 37 onwards in Chapter V. Locke refers to the emergence of money as a way in which everyone can benefit from everyone’s production by having a convenient instrument for swapping the product of my labour with the product of anyone else’s labour. What Locke gets out of this, in relation to the land problem, is that money means that unequal land appropriation is not a problem. So long as the proprietor sells the products of the land, then everyone benefits because the range of things that can be bought has increased and everyone has gained.

What Nozick is essentially doing is appealing to the idea that in Essay on Civil Government, the right to have and increase property is such an over-riding idea that it must override the problem of land running out. There is a more immediate argument to hand which suggests that the land problem is only a problem in a non-money economy. Just the willingness of the proprietor to barter the products of the land is enough for Locke.

That looks like victory for Nozick over Otsuka, though we really should not use exegetical arguments as a substitute for arguments of principle. In these exegetical terms, I think Otsuka does have an advantage overNozick, which is that Nozick underestimates the degree to which there is ‘public good’ in Locke, which is decided by a representative assembly. How far public good can override property rights in Locke is a tricky question from an internal point of view. So let’s introduce an external point of view. Where is Locke coming from politically? Support for the Whigs who where dominant at the time that the Essay on Civil Government was published (1689). Was there a system of the kind proposed by Nozick where the state is purely an agency for enforcing contracts and punishing violence? No, in many ways, and accordingly taxes were much higher than would be acceptable from the perspective of a Nozickian absoluteness about property rights. I would say, we need to interpret Locke as allowing a lot of latitude to ‘public good’, certainly enough to impinge on property rights though not enough to undermine the right to have property and keep it. Locke, and Nozick, are right to believe that in a free trading economy with money everyone benefits from the use landowners make of land.

Primary version of this post at Barry Stocker’s Weblog, with visual content!

I said that we should not confuse exegetical arguments with arguments from principle. I will nevertheless say that Locke’s text, with the hermeneutic aid of the political settlement he supported, is against both

restricting the right to acquire property

the notion that property is outside regulation and taxes which benefit the public good.

I presume that from a Lockean perspective that the amount of regulation and taxation should be very modest, and that those proposing such measures need to demonstrate their benefits very clearly. This all seems correct to me, something I would take up in my political perspective, and that this is the right way of taking most taxes in Classical Liberalism, despite what endless numbers of (mostly American) ‘libertarian’ keep claiming about Classical Liberalism leading to almost no state and little idea, or culture, of a public good. I don’t think their readings are worse than Rawls, but I have already addressed that a few times.

Link of the Day: Wilkinson on Measuring Inequality

Primary version of this post at Barry Stocker’s Weblog, with picture of Will Wilkinson, not just the link!

Image is of Will Wilkinson

Will Wilkinon has recently published a paper on inequality which looks at the difficulties of working out how much inequality there is and how much it changes over time. It’s produced a lot of online reaction, and Wilkinson is getting ready for a comprehensive series of replies on his blog.

How does inequality in income relate to inequality in consumption of goods and services?

How do changing prices in different kinds of goods and services at different price levels affect inequality over time?

How much advantage is there in having the most expensive car or refrigerator compared with having a cheap one which coves the basic functions just as well?

How does economic inequality relate to inequality in person welfare or well-being or happiness?

How much inequality comes from immigrants who accept low paid employment because it makes them better of than working in their country of origin?

What effects does economic inequality have on equal justice, equality before the law and equality in the political process.

Should we worry about inequality if the poorest are better off compared with the poorest in the recent past?

The other thing to add is that Wilkinson writes from a free market libertarian position, and not surprisingly his answers minimise the negative effects of inequality. His position is that economic inequality is very high in America, but this is not a bad thing because it does not effect happiness equality of justice equality. He posted the paper at the Cato Institute where he is a fellow and which is a libertarian free-market foundation, where he is a fellow. I don’t think that makes his paper less interesting for the left inclined, or only if they are unable to deal with reading anything where they might find areas of disagreement. Wilkinson is a moderate libertarian, who thinks the state should be involved in delivering public goods and reducing poverty. Like egalitarian or left liberals, such as the political philosopher John Rawls about whom I have posted several times, he thinks protecting a minimum level for the poorest in society is an important political goal. Even those who do not find this convincing from a left point of view would benefit from reading the paper and thinking about what it is they accept and don’t accept and why. Certainly his discussion of how to define inequality should of interest to anyone who is interested in inequality and equality.

Here’s few points Wilkinson did not cover with regard to defining inequality, but which seem to me to be very much in the spirit of what he writes

The impact of changing incomes and investment values over time. The rich are the mostly likely to suffer a very big drop in either or both, when the economy declines. If we look at economic inequality over time, it is likely to be reduced by this consideration. A relatively free market economy, like that in America may be more prone to such fluctuations.

How much do higher income people consume instead of investing? This sort of comes into what Wilkinson says about the difference about income and consumption, but is not completely explicit.

How much is income inequality exaggerated by the low income university students have before getting well paid jobs? Similar concerns apply to the unemployed who may be between quite well paid jobs.

How much is consumption inequality affected by immigrant sending money to family members in home countries, which spreads income from rich to poor countries?

Link of the Day: Libertarian view of Obama

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/17/AR2009071702093.html

Washington Post op-ed from Matt Welch and Nick Gillespie

Welch and Gillespie are both from the libertarian foundation Reason. They represent the moderate end of libertarianism (I’m from the extreme moderate end and unlike most libertarians I would put myself in the tradition of Abraham Lincoln’s liberalism). The article is libertarianism in a calm moderate mode, and it seems to me their comments include criticisms that left wingers could agree with: Barack has been slow to end arbitrary detention of terrorist suspects and restrictions on gays in the military, and has broken promises on open government. They also point out that Bush massively expanded federal spending and that Obama is continuing this. I would add that Obama has flirted far too much too much with economic protectionism, and this had led to retaliation from other countries.

Private Companies in Iceland rush to use Euro: What’s that British Euroscpetics say about the EU as USSR II? How disgusting is that anyway.

A story in today’s Financial Times refers to companies in Iceland that are rushing to adopt the Euro as an internal accounting device. The central bank there is putting on the brakes to avoid an unthoughtout lurch into a dual currency economy. Icelandic companies do so much business in the Eurozone that internal accounting is more conveniently conducted in Euros than krona.

So much for the claim of many prominent Eurosceptics that the European Union is like the old USSR. I don’t recall companies in Iceland, or any other nation, rushing to adopt the old rouble as an accounting currency. According to other reports, there is now a greater volume of Euros held in the world than US dollars. The Euro is the official currency of a greater population than the population of the United States, the total economic output of the Eurozone is greater than the United States, though the average income is somewhat less. What is happening in Iceland confirms that the development of the European Union, including the instrument of the EuroEuro is not the USSR II.

Exactly how can anyone make such grotesque comparisons. How many people are political prisoners in the EU? Where is the Euro-Gulag? Which newspapers have been closed by the Commission? The EU needs many reforms, but how can a commentator of sound mind and mature years compare the political union of an increasing number of European democracies with Soviet totalitarianism? Criticism of the EU is fine, like any institution it needs to be held up to continuous harsh criticism, but the Britsh Eurosceptics are not harshly criticising, they are letting European leaders of the hook with their ravings. If they stuck to promoting the free market policies they claim to put at the centre of their political beliefs, they could make a difference in pushing the EU in that direction. But why engage when you can live in a fantasy bubble land of British nationalism in which all problems come from outside targeting immigrants and Eurocrats. These people usually like to wrap themselves in the garments of Libertarianism and Classical Liberalism. Funny how ‘Libertarianism’ and ‘Classical Liberalism’ turn out to mean social conservatism and nationalism. I just cannot remember the relevant passages in Locke and Smith, Tocqueville and Mill, Paine and Kant. Maybe that’s because they do not exist.

Nozick Alone Among the Libertarians

I’ve been researching Nozick and his commentators for the MA course I’m giving next semester on Contemporary Political Theory (details on my university web page, see right hand column). The most vicious critics of Nozick are certainly his fellow Libertarians, including Murray Rothbard who Nozick refers to as important in converting him to a Libertarian point of view. Libertarian in this context means the capitalist version in which if the state exists at all, it should only exist to uphold property rights based on voluntary contract, and protect individuals from violence. In the Anarchist, or near Anarchist version, of which Rothbard is the best example, these laws emerge in a voluntary way without any need for a state.

Though I was already acquainted with the idea that Capitalist Libertarians/Anarcho-Capitalists are a quarrelsome lot and that most of them are on the fringe of the academic world, I was startled by the response of Libertarians to Nozick. Nozick is by some way the most distinguished representative of that point of view in academic philosophy. No one has replaced him in that role since his death, and Nozick may himself have stopped filling that role. Though he did not say much about political philosophy after his Libertarian masterpiece Anarchy, State and Utopia, there are indications he pulled back from his claims in that book to a softer form of Libertarianism (presumably heading towards the kind of welfarist liberal/capitalist libertarian crossover I favour). The Libertarian response is to sneer that he turned into a social democrat. Anyway they did not like his book in the first place, and were probably relieved that he could be later labelled as an apostate .

Murray Rothbard, and his followers, express great jealousy of Nozick’s success, claiming that Rothbard’s Ethics of Liberty (click for pdf download) is a more important book. The book can be found via www.mises.org as can a great deal of other relevant material. I certainly don’t fault the Misess Insittute people for failure to use the Internet properly. Anyone who compares Rothbard’s book with Nozick really ought to feel embarrassed for Rothbard, and his followers, that they could be so self-deceiving and foolish as to think Rothbard’s book is better. His method of argument is constant restatement of the view that the state is unnecessary, and that left to themselves, people will create better voluntary arrangements. His method of dealing with different points of view is to insult them and to fall back on an analogy between the state and a supplier of goods or services in a market economy based on rules of a kind which have always been enforced by the state. Just like Anarcho-Communists, Rothbard relies on natural intuitions of Natural Law to substitute for the role of the state. Again the universality of these intuitions is asserted rather than argued for. The fact that Nozick’s book is composed from a variety of detailed arguments for his position is used against him by the Rothbardians, apparently people just read those arguments separately which is supposedly easier than reading Rothbard’s book through. There is nothing difficult about Rothbard’s book apart from the boredom resulting from his constant under argued assertions.

Other criticisms of Nozick from team Rothbard, and other Libertarian crews, include outrage that Nozick finds paradoxes at the foundations of Libertarianism he has to try to answer, essentailly the classic paradox of explaining how people consent to a common set of rules without force. In their zeal Libertarians are shocked by the possibility of paradox in the foundations of their ideal system, though one might think the whole point of political philosophy is to deal with the paradoxes that human reason throws up and which every inquiry into the heart of a subject always throw up.

Jealousy is never far from the surface. The feeling that famous universities are dominated by cliques of elite left-liberal academics excluding the knights of Libertarianism is a constant theme. It is not possible that the left-liberals (also Neo-Conservatives and Conservative Paternalists) could be doing honest work of high quality. The fact that Rothbard never had a job at a famous institution clearly embittered him and his followers. Rothbard appears to have been a generous and inspiring person in some respects, but somewhat lacking in a sense of proportion about his importance and the quality of his essentially polemical work. Nozick was a professor at Harvard, and even worse is very generous about the work of his famous left-liberal colleague John Rawls. Generosity to non-Libertarians is not widespread in Libertarian culture; they find it hard enough to be generous to each other. Nozick appears to have been a sensitive, understanding and well rounded individual who did not try to dominate other people or establish a clique of loyal followers. He was certainly a misfit on Planet Libertarian