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December 20, 2004

market fundamentalism

Don Herzog: December 20, 2004

Okay, gang, quiz time.  (Look, no moaning.  You're reading a blog written by professors.  What did you expect?)  Identify the authors of these snippets.  Using Google is cheating and will be savagely punished:

  • Vanity drives the struggle for wealth.  The rich want "to possess those decisive marks of opulence which nobody can possess but themselves."
  • Market society is profoundly inegalitarian.  "For one very rich man, there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many."
  • There's nothing fair or evenhanded about the role of government in any of this.  The government, "so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at  all."
  • The division of labor is profoundly dehumanizing.  "The man whose whole life is spent in performing a few simple operations ... generally becomes as stupid and ignorant as it is possible for a human creature to become."  Eventually he becomes "incapable of relishing or bearing a part in any rational conversation [or] of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgment concerning many even of the ordinary duties of private life."  Instead of abandoning the workers to their "drowsy stupidity," the state ought to supply public education.

Some comments in threads on this blog dutifully recite decades-old and once-plausible right-wing indictments of The Leftist.  This creepy character thinks the state a wonderful engine for designing society from scratch.  He distrusts private initiative and longs for giant bureaucracies to run people's lives for them.  I don't doubt that much of the Western left cozied up to the Soviet Union for much too long, or that you can still find people willing to say nice things about the Khmer Rouge or the glory days of Enver Hoxha's Albania.  But please, people.  We bloggers are not sketching evil cackling capitalists with top hats and watch fobs.  Some of us lefties think markets are great.  I sure do.  Why?

The fundamental point is worked out in the debate about whether state socialism could be economically efficient.  (I'm thinking of von Mises, Lange, Taylor, Knight, and others.)  Decades later, Hayek wrote a profound distillation of the case for markets as vehicles for assembling farflung information that no central planner could conceivably get his hands on.  I'm 100% sold on this case.  And markets have other virtues.  They are wealth-creating devices, and in a world where poverty remains endemic, no one should sneeze at that, no matter what you think about distribution.  And -- a point Murray Rothbard has pressed -- if you get the state out of the business of handing out benefits to vociferous firms, they actually have to compete with each other instead of rent-seeking.  There are yet more virtues of markets, which I'm sure readers here can and will produce, but in the meantime, let's continue the quiz:  who wrote this?

  • "The cruellest of our revenue laws, I will venture to affirm, are mild and gentle, in comparison of some of those which the clamour of our merchants and manufacturers has extorted from the legislature, for the support of their own absurd and oppressive monopolies.  Like the laws of Draco, these laws may be said to be written all in blood."  The state should be wary in responding to these capitalists, because they "have generally an interest to deceive and even to oppress the publick."

Now there's a huge literature debating when or whether markets fail -- will they provide public goods? and because of network effects and the like, will they create monopolies not disciplined by the threat of entry?  And then there are questions about whether the state can improve on even failed markets.  Leave that stuff aside.  The real question, I think, is:  what are the proper boundaries to the market?  What do we want to buy and sell, and what do we want to allocate in other ways?

Once we bought and sold people.  Slavery is one way to have a market in labor, and we rejected it.  Now employers can purchase your labor, but not you.  Richard Posner has proposed buying and selling babies, or "parental rights," to get rid of those noxious queues at adoption agencies:  most of us flinch, even though he's got to be basically right about the queues.  The state assigns each adult citizen the nontransferable right to cast one vote.  We could have a market in votes:  the state could assign initial property rights by mailing you a coupon that says, "bearer has the right to cast one vote."  You could "consume" your property by casting the vote yourself; you could donate the coupon to the political charity of your choice; you could sell it to Ross Perot.  But we reject any such market, and we don't budge when an economist observes that prohibiting free transfer generates deadweight loss.  Citizenship itself isn't for sale.  The usual way to get it is by being born here, which has nothing to do with merit or accomplishment or hard work or consumer demand.  Fans of the Boston Red Sox had to wait for their team to win the right games at the right times to win the World Series; they couldn't pool together and raise enough money to buy the title from the Yankees.

The list of nonmarket goods is awfully long and wonderfully diverse.  A liberal society isn't just a free market underwritten by a night-watchman state.  It has lots of different institutions -- churches, universities, clubs, you name it.  Market fundamentalists, as I'll cheerfully dub them, want to envision all of society in the market's image.  There are other kinds of fundamentalists out there.  A certain kind of participatory democrat wants all of society to be run democratically:  she'll demand, why don't workers get to make decisions at firms? and why should the Roman Catholic Church be so hierarchical?  Christians have occasionally suggested that all of society should run on an ethic of brotherly love.  And so on.

We should reject all these fundamentalisms, and instead respect the idea of boundaries between different social settings. (That's not the same as maintaining whatever the current boundaries are.  When the state ditches slavery or makes sexual harassment actionable, it redraws the boundaries of the market.)  And we should reject the view that whatever the state does is coercive, and whatever society or the market does is voluntary.  The state can write rules that expand our options, and no, not by grabbing and redistributing things that others are entitled to.  The legal rules for writing a will let you do something magical and bestow your property after you're dead.  And social relations can be coercive.  Oh, if you're anxious about your grade, for extra credit you can identify the author of this passage:

  • Labor markets are fundamentally coercive.  Wealthy employers can outlast their workers in the event of disputes.  "It is not ... difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms."

Notice the right-wing complaint that crazed political correctness is silencing people on campuses and elsewhere, even costing them their jobs.  True or false, it sure does depend on the view that you can find coercion outside the state.  Your action isn't voluntary if you had no reasonable alternatives, and it doesn't take a law to deprive you of such alternatives.  Once we wrest free of market fundamentalism, we can see problems with state action and possibilities for it that have nothing to do with market failure, economic inefficiency, regulatory capture, and the like.  And we can see a host of political problems -- controversies over the legitimacy of authority in farflung social domains -- that have nothing to do with the state.

Oh yeah, my quiz.  I'll trust you to grade yourself with the answer key:  every single passage is from Adam Smith, The Wealth of Nations.  I wonder how many of those energetic young right-wing lobbyists sporting Adam Smith neckties know what he actually says.

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Comments

Posted by: Ted

Many of the same conservatives are also fond of Tocqueville - I have an edition with a little sunburst on the cover touting it as part of Newt Gingrich's reading list for members of Congress - and he has very similar things to say:

"While the workman concentrates his faculties more and more upon the study of a single detail, the master surveys an extensive whole, and the mind of the latter is enlarged in proportion as that of the former is narrowed. In a short time the one will require nothing but physical strength without intelligence; the other stands in need of science, and almost of genius, to ensure success. This man resembles more and more the administrator of a vast empire; that man, a brute.

The master and the workman have then here no similarity, and their differences increase every day. They are connected only like the two rings at the extremities of a long chain. Each of them fills the station which is made for him, and which he does not leave; the one is continually, closely, and necessarily dependent upon the other and seems as much born to obey as that other is to command. What is this but aristocracy?"

Democracy in America, Book 2, Chapter 20

Posted by: Ted | Dec 20, 2004 9:04:56 AM


Posted by: Tom Pain

Churches, universities, clubs - how are these not private insitutions subject to the market? Are people forced to join or contribute to a church, university or club?

Reject all fundamentalisms? What about "civil rights fundamentalists" who say the law should treat all equally? Or "human rights fundamentalism" which say people across the board should all recieve "human rights" such as food, health care, etc?

Plus all those evil right-wingers also don't believe in the Labor Theory of Value created by Adam Smith. Clearly according to your "logic" they are either stupid or hypocritial.

Posted by: Tom Pain | Dec 20, 2004 9:07:50 AM


Posted by: D.A. Ridgely

Probably far more than the "Che" shirt wearing left-wing activists who have read Marx's Capital and certainly more than those in the latter group who have ever experienced first-hand the blessings of command-economy societies.

I certainly had no difficulty recognizing Smith in several of the quotes and just assumed the rest were his. Big deal. Let's remember that Smith was arguing against vested interests opposed free trade. He was hardly a defender of the status quo of his age.

Yes, of course, there are market failures, though far fewer than most liberals believe. And yes, of course, not all coercion is state coercion. The fire in the basement may not cause the leak in the sink, either, but one finds it much easier to deal with minor plumbing problems once the fire is extinguished and the fact that at least the fire was keeping you warm is not much of an excuse to let it rage on.

Posted by: D.A. Ridgely | Dec 20, 2004 9:25:30 AM


Posted by: ludwig

Some people are just utterly incapable of escaping the "market" metaphor of social arrangements, save when they face the exquisite fact that their anti "civil rights" ideas are not doing very well in the 'marketplace of ideas'. Heh.

Posted by: ludwig | Dec 20, 2004 9:25:49 AM


Posted by: McDuff

Churches, universities, clubs - how are these not private insitutions subject to the market? Are people forced to join or contribute to a church, university or club?
The day a company manages to work out how to generate fervent and hereditary brand loyalty like religion does, the market for its goods will be as distorted and violent as the market for religious truth. As far as universities or clubs go, anything with restrictions on entry other than the size of your wallet is obviously not a free market. In theory, it shouldn't matter how much money you have, if you're thick then you can't get on the course.

I think you have a rather odd view of the full and necessary structures required for a market to be "free."

Posted by: McDuff | Dec 20, 2004 9:36:36 AM


Posted by: McDuff

D A Ridgeley

Yes, of course, there are market failures, though far fewer than most liberals believe.
Really? How often do "most liberals" believe the market is failing? How often does it fail? Can you, ahem, back up this comparative assertion with anything concrete or is it merely rhetoric designed to pooh-pooh the concerns of people who have gained access to the temple and not been awed by the glory?

Posted by: McDuff | Dec 20, 2004 9:41:23 AM


Posted by: duus

"Yes, of course, there are market failures, though far fewer than most liberals believe." --D.A. Ridgely

I'm pleased we're having a conversation that's moved beyond stereotypes and is instead discussing substance and offering facts.

Look, I'll say it: Us liberals realize that we have virtually no power right now and that we can therefore be casually dismissed. That's life. But that doesn't make the casual dismissal accurate in any sense: it's just an expression of power.

Take care Ridgely. I hope you're doing well.

Posted by: duus | Dec 20, 2004 9:47:32 AM


Posted by: Tom Pain

McDuff:

Free market: Any transaction mutually agreed upon by both parties.

You must be against freedom of association too.

Snore...please tell me this isn't just going to be pimping of statist fundamentalism.

Posted by: Tom Pain | Dec 20, 2004 10:04:06 AM


Posted by: Stuart

This is a bit OT, but I want to thank the authors of this blog, and the commenters. I'm of a distinctly libertarian bent and I have been searching for an intelligent leftie blog that didn't sound like the doctrinaire rantings of 60s leftovers. The triumphalism of the right side of the spectrum is beginning to get tiresome, and until I found this place I was despairing of finding something to round out my daily required reading.

I'll just note that the quotes from Smith are fine, but they are libertarian, not pro-business and not pro-regulation, either. The concepts are distinct.

Posted by: Stuart | Dec 20, 2004 10:06:30 AM


Posted by: D.A. Ridgely

Let me back up a moment, having recovered from my flash of pique at Mr. Herzog’s rather condescending quote-fest, and acknowledge that his fundamental point is sound. Strictly speaking, property (as opposed to mere possession) exists only by virtue of the state. I didn’t pay enough attention in my trusts and estates class to discuss wills, but contract law truly is ‘magical’ – the fact that private parties can create binding legal obligations among themselves, promises that the state will enforce for us, is an absolutely requisite condition of any market worth having. The family is not (contra Posner) a ‘market,’ people are not property and the world is filled with many non-economic goods (which is not to say that economists can’t shed some light on how we enjoy or fail to enjoy such goods). All true.

But if ever a quote cried out for a ringing “Tu quoque!,” it is Mr. Herzog’s talk of “decades-old and once-plausible … indictments.” We may be above all that around here, but when exactly is the left going to let poor Herbert Hoover die or take responsibility for the far greater human misery and poverty caused by statist institutions (including both right and left wing sorts) or ‘fess up to the extraordinary failures of government institutions and programs in our own society in the past 40 years? When will it stop characterizing corporations and business people as heartless money grubbers indifferent to the plight of the poor or the ravaged ecology they are bequeathing their own children? When, for that matter, will they cease presuming (especially if they enjoy a string of initials after their names) that they are so much smarter than those who do not share their political opinions?

Life is not a business. But neither is a state a society, let alone a family or an individual, and most of us most of the time would be far better off with a “night watchman” state that otherwise minded its own business. If, as Mr. Herzog claims, there are a host of political (I would prefer ‘social’) problems that have nothing to do with the state, we have little reason to believe their solution will lie in more state action.

Posted by: D.A. Ridgely | Dec 20, 2004 10:08:04 AM


Posted by: Bernard

McDuff:

'As far as universities or clubs go, anything with restrictions on entry other than the size of your wallet is obviously not a free market.'

Which criteria does it fail?

Posted by: Bernard | Dec 20, 2004 10:09:14 AM


Posted by: Terrier

Thank you, Don, for expressing so effectively the sentiments I have long had when enduring the legion of libertarians on the internets. This is exactly why I bristle so much when these philosophers call me a Marxist. I am a Capitalist. I am not a treasonous anarchist. I can only conclude that they are either too cowardly to accept the course of action demanded by their own conclusions or they are just hypocritical liars. Now, I know some will say that I am being judgmental and name-calling (of course if I was calling the news media or the faculty liberal I wouldn't be) but when someone says to you repeatedly, "My house is on fire!" and they make no effort to put it out when you see no flames then what conclusion can you reach? Quite frankly, because of the brainwashing that has occurred in this country since the 60s, I wonder how America is going to continue to exist when so many citizens are clearly Anti-American and opposed to the principles of the country (as well as their own self-interest.)

Posted by: Terrier | Dec 20, 2004 10:23:18 AM


Posted by: McDuff

Universities fail to be free markets because they judge, or should do, on the criteria of how smart you are, or to be absolutely specific how smart you can prove you are.

Clubs can fail on all manner of things, not limited to but including the Happy Fun Tree House Syndrome which restricts access to many private members clubs to those without a penis. Note, I am not on a lefty rant and saying that this is a bad thing, just that it's not a totally free market.

Beyond this, though, I can see the elements of a slanging match starting to brew, and I'm not going to be party to that.

D A Ridgeley

We may be above all that around here, but when exactly is the left going to let poor Herbert Hoover die or take responsibility for the far greater human misery and poverty caused by statist institutions (including both right and left wing sorts) or ‘fess up to the extraordinary failures of government institutions and programs in our own society in the past 40 years?

Are you asking us to "fess up" to the fact that, for example, health care and education in the USA are a mess, or to the "fact" that this is because they have been undertaken by the government and are therefore bound to fail? The first is something I doubt you will find many on any part of the spectrum disagreeing with -- human progress is driven by dissatisfaction, after all -- the second is indeed worthy of scare quotes around "fact," because it is far beyond being even disputed orthodoxy; it is one theory, and the one with the least evidence to back it up.

Posted by: McDuff | Dec 20, 2004 10:31:47 AM


Posted by: DanielM.

I would guess that many of those "right-wing lobbyists" knew those quotes to be Adam Smith.

As a Republican, I must admit that I made a couple of wrong guesses, however. One of the quotes I was sure was from Mandeville, and another I was pretty sure came from Hume. But, seeing that Hume influenced his young friend Smith very much, and that Hume himself was very influenced by Mandeville (who was himself influenced very much by Nicole & Hobbes) - I guess I did a lot better than you thought I would.

Posted by: DanielM. | Dec 20, 2004 10:41:44 AM


Posted by: Tom Pain

MrDuff: A free market in club memberships or universtity entrance means the clubs/schools can have any restrictions they want. Free markets imply freedom of association and any group can freely decide on who to sell things (i.e. memberships or schooling) to whomever they want at whatever price they want, just as customers can choose to buy or not buy for whatever reason they want.

Posted by: Tom Pain | Dec 20, 2004 10:47:26 AM


Posted by: Terrier

“most of us most of the time would be far better off with a “night watchman” state that otherwise minded its own business” - ? This kind of statement reminds me of the fundamentalist Moslems that I once worked with who actually believed that the Caliphate was the glory days of humanity and only by returning to the rule of sharia could we have a fair and equitable state. The truth is, most of us are not so dogmatic that we give a damn about any utopian theories. Give us something that sorta, kinda works most of the time and we’ll muddle thru and survive. Near as I can tell, that was the sentiments of the founders and so far it has worked, that’s why I am proud to be an American. I reject radicalism in any form whether it comes from the left of the right.

Posted by: Terrier | Dec 20, 2004 10:47:41 AM


Posted by: Tracy

Why do socialist-tending thinkers bother posting these lists of quotes from Adam Smith? Do you seriously believe that advocates of free-marketers regard Adam Smith as biblical literalists regard the Bible, and thus will be completely thrown into confusion by finding words "from the heavens above" that disagree with their own thinking and arguments?

And have they missed the free-market motivated attacks on tarriffs and other forms of government support to businesses, and the theory of public choice that provides a pretty plausible explanation of how companies and unions manage to get such intervention from the government? The theory of rent-seeking has a long history in economics, and it's not just Adam Smith who worked on it. (I would actually be surprised if he was the first person to ever notice how merchants seek and frequently achieve laws for their own gain. Though I can't cite an earlier authority off the top of my head, it seems too obvious to have been missed.)

Someone can be in favour of free-marketers and admire Adam Smith's central insight without believing that angels attended his birth. Just as someone who knows something about physics can admire Albert Einstein immensely and find the Theory of Relativity very useful, and also use quantum mechanics on a daily basis without being burnt in effigy by their local university's physics department. Make your arguments on their own merits.

Posted by: Tracy | Dec 20, 2004 10:55:30 AM


Posted by: Tom Pain

McDuff: I should also note we are talking about buying/selling association and not necessarily cash transactions.

Posted by: Tom Pain | Dec 20, 2004 10:57:52 AM


Posted by: Bernard

McDuff, I agree with Tom. As far as I know, most every discussion on the merits of free markets is based on the distinction between markets free of or with varying degrees of government intervention.

You may well be right that other interpretations exist, but I believe that the above is overwhelmingly the most common.

Posted by: Bernard | Dec 20, 2004 11:06:28 AM


Posted by: dubious

The punchline of the opening post in this thread seems much like the theory laid out by Michael Walzer in his 'Spheres of Justice.' Walzer writes that there are many spheres of human endeavor (the market, education, religious institutions, political power) and that for one sphere to use its power outside of its own sphere is a sort of tyranny, so that confining political power to only the highly educated (Mandarins or mullahs) is a tyranny, as is buying a Ph.D. without the necessary study.

I think that's right. If one sphere dominated all the others, we would have some sort of 'fundamentalist' society that the opening thread critiques. There is an interesting passage on political power (pg. 309):

[QUOTE]Democracy requires equal rights, not equal power. Rights here are guaranteed opportunities to exericise minimal power (voting rights) or to try to exercise greater power (speech, assembly, petition rights). Democratic theorists commonly
conceive the good citizen as somone who is constantly trying to exercise political power, though not necessarily on his own behalf. He has principles, ideas, and programs, and he cooperates with like-minded men and women. At the same time, he find himself in intense, sometimes bitter, conflict with other groups of men and women who have t heir own principles, ideas, and programs. He probably relishes the conflict, the "fiercely agonistic" character of political life, the opportunity for public action. His aim is to win -- that is, to exercise unequaled power. In pursuit of this aim, he and his friends exploit whatever advantages they have. They make good account of their rhetorical skill and organizational competence; they play on party loyalties and memories of old struggles; they seek the endorsement of readily recognized or publicly honored individuals. All this is entirely legitimate (so long as recognition doesn't translate directly into political power: we don't give people we honor a double vote or a public office)."
[\QUOTE]

All this seems exactly right to me. This is exactly the sort of template we should use for each equality of rights within each sphere. To be specific, one can imagine a virtually identical paragraph with a few substitutions, detailing what 'economic democracy' would be.

Walzer, being of Leftish bent and having a mild case of traditional scholarly disdain for the market, goes on to add:

"It would not be legitimate, however, for reasons I have already worked out, if some citizens were able to win their political struggles because they were personally wealthy or had wealthy backers or powerful friends and relatives in the existing government. There are some inequalities that can, and others that cannot, be exploited in the course of political activity."

Walzer is willing to let those who have a dominance in the sphere of politics use that dominance to win their economic struggles, but not vice versa. This even though he admits that politics is the most powerful of spheres.

And so again, I believe the opening post was very much in the spirit of Walzer.

Posted by: dubious | Dec 20, 2004 12:04:55 PM


Posted by: Eddie Thomas

"I wonder how many of those energetic young right-wing lobbyists sporting Adam Smith neckties know what he actually says."

I'm not sure why you directed this comment only towards the right-wingers. How many self-identified liberals would think of Adam Smith as one of their own?

I could just as easily cull together a list of quotations from conservatives that people on the left might guess are from Karl Marx. Old-style conservatives didn't think much of capitalism either.

I don't see what any of this shows, other than the oddity that much of what American conservatism is attempting to conserve is a classically liberal regime, in which contemporary liberalism has a significant mistrust.

Posted by: Eddie Thomas | Dec 20, 2004 12:22:20 PM


Posted by: Bernard

'I don't see what any of this shows, other than the oddity that much of what American conservatism is attempting to conserve is a classically liberal regime, in which contemporary liberalism has a significant mistrust.'

Eddie, I think these things are always contextual. As a classical liberal I will automatically be conservative in the context of a classically liberal democracy, whereas i'd be extremely liberal in the context of a dictatorial former soviet republic. Likewise, American liberals tend to appear rather conservative to European liberals for whom the goalposts are quite different.

Posted by: Bernard | Dec 20, 2004 12:36:42 PM


Posted by: Terrier

Eddie, I am a self-identified liberal who thinks of Adam Smith as one of my own. I don't see what your post shows, other than the oddity that much of what American Conservatism is criticizing in contemporary Liberalism is a Marxist bogeyman that no longer (if it ever did) exists. I'm sure all modern Conservatives know more about the inner workings of the Politboro than the policies and issues that are important to Liberals today. Not a post goes by without the tiresome chanting of the well-worn formula "marxist, socialist: so I don't need to actually address your ideas!"

Posted by: Terrier | Dec 20, 2004 12:44:06 PM


Posted by: Trollwatch

Terrier, very poor trolls. Try harder! call him stupid and racist too.

Posted by: Trollwatch | Dec 20, 2004 12:51:23 PM


Posted by: Dave M

The Scottish enlightenment is much more important to the development of the American left than the American right. Ben Franklin, Thomas Paine, James Callendor, Benjamin Franklin Bache, Thomas Jefferson, even James Madison - these "founders" were heavily influenced by (or were) Scottish. People like Adams and Hamilton treated Edinburgh with disdain.

The problem with this discussion, though, is the different way that the American left nd the American right treat their intellectual forbears. The left takes the ideas and discards the names, the right takes the names and discards the ideas.

Posted by: Dave M | Dec 20, 2004 1:13:54 PM


Posted by: Linus Unbound

How can you write a piece on 19th century capitalism during Christmas and not mention Ebenezer Scrooge? You hack!

Okay, seriously, I'm really blown away by this one. What a great, well-written essay! You really do live up to your namesake "Left2Right" with the tone, and your eloquence made this a joy to read.

You've misrepresented two minor points of "market fundamentalists": first, they vehemently oppose business using government to damage their competition, and second, your portrayal of slavery as a capitalist institution, which true free marketeers will tell you cannot be because the slaves are denied their property rights.

However, outside of those very minor details, your theme is a sound one and very well-presented. To name just a few institutions, culture, relationships, religion, sports and learning are about a free market of ideas and talents, not money. Too much money, or an unhealthy obsession with same, corrupts these institutions.

Even the welfare state isn't about money any more, at least not to Republicans.

Libertarians may criticize the welfare state because it harms taxpayers, but Republicans criticize the welfare state because it harms recipients.

I think the Republicans get this one right, but in so doing they accept the fundamental premise that the government has responsibilities beyond "night watchman".

Posted by: Linus Unbound | Dec 20, 2004 1:15:55 PM


Posted by: Tom Pain

Linus: Who said the free market is ONLY about money transactions? Money is just a convenient medium of exchange, not the only medium of exchange.

Posted by: Tom Pain | Dec 20, 2004 1:19:36 PM


Posted by: Daniel M.

Dave M., "The Scottish enlightenment is much more important to the development of the American left than the American right?!"

First off, you are completely and utterly wrong. I'd say "prove it," but we needn't waste valuable time and space..

"The left takes the ideas and discards the names, the right takes the names and discards the ideas."

You are entirely misguided in your search for a pithy trope.

Posted by: Daniel M. | Dec 20, 2004 1:28:46 PM


Posted by: Dave M

Daniel M. That was an insightful response. There are of course vagaries in any intellectual genealogy, but my very willingness to recognize that is a sign of my place on the left. So lets take this slowly: do you deny that, at the time of the founding, those most influenced by the Scottish Enlightenment were located on what passed for that time's left?

Posted by: Dave M | Dec 20, 2004 1:38:29 PM


Posted by: J. M. Harlan

Professor Herzog claims: (1) it is bad to enforce some contracts, e.g., for slavery or parental rights; (2) for the same general reason it is bad to submit to other kinds of "fundamentalism," e.g., worker democracy; and (3) private institutions can be coercive.

His argument appears to be: (1) the right relies on these claims as premises in arguments for right-wing policy prescriptions; (2) but the claims are false; (3) so the right's arguments relying on them are unpersuasive.

If this is what he means, then, as other comments have pointed out, he is attacking a straw man. For the right does not assert any of the three claims that Herzog attacks.

The right accepts that some contracts should not be enforced: contracts for the transfer of political votes seems a noncontroversial example. And the right agrees that private institutions may be coercive. A. is coercive when he excludes B. from his dinner party, terminates B.'s employment, or expels B. from his university, just like the state would be coercive if it forced A. to invite B. to his dinner party, hire B., or educate B.

Consider a concrete example also raised by commenters: racial antidiscrimination laws. A right-wing position would be that racial antidiscrimination laws should not apply to private conduct. Under such a regime, XYZ Corp. could refuse to hire African-Americans without incurring legal sanctions.

Herzog appears to believe that the right-wing argument for this policy prescription is something like: (1) we should enforce contracts and not compel people to make them, therefore (2) if XYZ Corp. has not contracted with an African-American for employment, we should not require XYZ Corp. to do so.

That hypothetical argument would be susceptible to Herzog's attack: in some cases it is bad to enforce contracts (or their absence) and, consequently, claim (1) is false and the hypothetical argument, unpersuasive.

In fact, however, the right-wing argument for the nonapplication of racial antidiscrimination laws to private conduct conditions claim (1) with something like "generally." The right claims that we should *generally* enforce contracts and their absence.

The disagreement between right and left is over when trumping contract is appropriate, not whether it ever is. That suffices to rebut Herzog's argument.

But more can be said. The normal, liberal regime of property, contract, and tort (PKT) leads to the maximum satisfaction of subjective preferences, subject to market failures. It is good to trump PKT when (1) changing preferences is good or (2) some value can be so served that is more important than the lost subjective-preference satisfaction it costs.

Either criterion could be said to justify applying racial antidiscrimination laws to private conduct. They might change people's tastes in favor of African-Americans, or the value of having African-Americans treated equally in important social relations such as employment might outweigh the subjective-preference satisfaction it costs.

This is where the right and left disagree. The right would contend that altering tastes in this way is illegitimate; rather, tastes should be altered by convincing people through argument. And the right would contend that equal treatment for African-Americans does not justify the equivalent of a wealth redistribution from the subjects of racial antidiscrimination laws.

Posted by: J. M. Harlan | Dec 20, 2004 1:39:40 PM


Posted by: Daniel M.

Dave M. "So lets take this slowly?" As I broached the wider discussion of the Scottish Enlightenment with my tongue-in-cheek comments on Hume and Mandeville, I must say you are either pompous or rude. The point of my previous post was to call your self-centerdness to your attention.

Be that as it may, for one such as yourself, whose "very willingness to recognize [that] there are of course vagaries in any intellectual genealogy," and that "that is a sign of [your]place on the left;" how can you make any claim as to what passed for the "left" then? Or that they would have disdain for what is, purportedly, the "left" today? What then of your "vagaries?" Do you know the thinkers who informed Scottish thought then? Do you understand the difference between "Liberalism" and "Conservatism?" Do you know that we both drink from the same well and that, when you try to poison me you only poison yourself?

Did you know that a tenet of their faith was that self-love triumphed over charity (I'm relying on Mandeville here) and that they were suspect of any action from charity as a result? That they wailed against intervention?

I'm sorry. Being liberal (with a small "l") does not give you intellectuial superiority or greater prima facie understanding. My last post may have been fluff, but I was commenting on fluff.

Posted by: Daniel M. | Dec 20, 2004 2:12:58 PM


Posted by: Terrier

Dave M., you miss their point. You and I know we have liberal ancestors but as far as the libertarians are concerned all those ancestors are their property and you and I are the spawn of stupid Marixists.

Harlan, I understand! Antidiscrimination is not good. Those who discriminate are reasonable people, so people should be discriminated against until they can persuade these people to stop. There are countless examples thuout history of such reasonable people being persuaded. Name one!

Posted by: Terrier | Dec 20, 2004 2:33:53 PM


Posted by: Daniel M.

Terrier, you miss the point. I said we shared the same genealogy. Quit wallowing.

Posted by: Daniel M. | Dec 20, 2004 2:41:44 PM


Posted by: frankly0

What I always find tiresome in arguments from the right is the constant use of terms like "statism" and "collectivism" when applied to European economies and even to the American economy. They seem to have the completely ungrouded view that any deviation from pure laissez faire economy is nothing more than a stepping stone to complete socialism.

Yet the reality of both European and the American economies are that they are all mixed, part market based, part government controlled, and pretty much stably so. There has been absolutely nothing to suggest that these economies are vacillating wildly, or even trending only in one direction, in the amount of market based domains on the one side, or governmentally controlled domains on the other. Various areas - education, health care, social security, basic scientific research, even some aspects of technology and manufacturing - go in and out of governmental control to various degrees as programs prove effective or counterproductive.

It strikes me that talk of "statism" and "collectivism" and even "socialism" is as dated as is Marxism and Communism themselves. Perhaps those terms had some meaning (mainly to people on the right) when Communism had some ongoing sway over people. But since the collapse of the Soviet Union, and the embrace of capitalism in China, why pretend anymore that countries will, inevitably, come to occupy one extreme or the other? Why not recognize the obvious, namely that mixed economies will stay mixed, and instead turn the discussion to the question of which programs in particular are better handled by the free market and which by the government? Why engage in the strawman of "statism" and "collectivism" and "socialism"?

What's interesting is that it is always people on the right who have deep problems with this pragmatic approach -- it's a matter essentially of religion to them that the free market always is superior, and discussing the merits of particular programs is very threatening to their faith-based belief in the free market ideology. Yet if these programs are indeed fated to bad ends, as they believe, why not let them simply prove their own ineffectiveness in practice, rather than rejecting them apriori as wrong on some theory? Why the hysteria?

Posted by: frankly0 | Dec 20, 2004 2:44:04 PM


Posted by: Dave M

Daniel M. I will gladly concede that I am both pompous and rude, particularly when someone calls me "completely and utterly wrong" and "entirely misguided." If you want to "call my self-centerdness to my attention," you may want to do it with an argument.

I agree that it is anachronistic to claim that the "left" during the late 18th century corresponds to the "left" today. However, there was a discernable left at that time, which is conventionally associated with the anti-Federalists, rather than the Federalists, and the anti-Federalists showed more direct intellectual and personal relationships with key figures in the Scottish enlightenment. You may disagree with my claim that the anti-federalists were the left of the time, but it is by no means "utterly wrong." Ben Franklin was in regular correspondence with Hume and Kames and visited Edinburgh to stay with Hume. His grandson worked with William Duane and James Callender to create what would eventually become the Democratic Party. Their overwhelming impact was the dissemination of Painite hostility to gentility and entitlement, represented for them by George Washington and John Adams.

Do you disagree with the statement that liberals and conservative treat intellectual influences differently?

Posted by: Dave M | Dec 20, 2004 2:50:40 PM


Posted by: Dave M

frankly0 - calling modern liberals "socialists" is like calling soldiers who want to up-armor their humvees pacifists.

Posted by: Dave M | Dec 20, 2004 2:52:08 PM


Posted by: Henry Woodbury

I'm a little baffled by the idea that there are "market fundamentalists" are antagonistic to the social spheres of universities, churches, and clubs.

In that most of these institutions are private entities that own private property and "coerce" their members and/or employees through contract, they seemingly bolster the arguments of "market fundamentalists" -- at least those "market fundamentalists" who see property rights as a cornerstone of human rights.

But maybe I'm thinking of the wrong "market fundamentalists."

Posted by: Henry Woodbury | Dec 20, 2004 2:52:46 PM


Posted by: LeftTranslatorDevice

Remember that "pragmatisim" from the "progressives" means never questioning the New Deal or current state-intervention in the US economy.

To question the validity or authority of these programs is to be "fundamentalist."

While to take these programs as being both just and effective on blind faith is called being "pragmatic."

I hope this translation is helpful.

Posted by: LeftTranslatorDevice | Dec 20, 2004 2:59:41 PM


Posted by: Daniel M.

Dave M., I am in compete accordance with your assertion "that liberals and conservative treat intellectual influences differently." I also understand and agree with how you relate the relationships between the pre-revolutionary colonial Americans and the Scots Philosophers. (as an aside to frankly0, I never use the words "statism" or "collectivism" unless talking of Stalin's 1930s Ukraine)

What I am baffled by, truth be told, is that the left enjoy generalizing about the right (leaving aside the discussion as to whether the right does it also - a generalizing republican is a moron) while trying to maintain the higher intellectual ground. I admit that is why I had a fluffy retort for you. I maintain that we drink from the same well, regardless of our varying interpretations of what that well means. Some people want a semi-socialized health care in America: I believe socialized care (to whatever extent)to be an infringement on my freedom and will fight it the best I can while honoring the opinions of my foe. The same can be said for the establishment clause, which in no way accepts a "separation of church and state" (Philip Hamburger is my best argument). That model can be tested by trying to pass a soc&s amendment to our constitution: it would never happen.

I'm glad for this blog - even though some on both sides want to sling mud on ocassion - because it does allow some mutual conversation. I'd just rather the denigratory remarks concerning the "right" be kept to a dull roar so that we republicans don't always feel that we come here already on the defense. The final sentence of Herzog's is a case in point.

Posted by: Daniel M. | Dec 20, 2004 3:12:40 PM


Posted by: Glen Raphael

"There has been absolutely nothing to suggest that these economies are [...] even trending only in one direction, in the amount of market based domains on the one side, or governmentally controlled domains on the other."

Use as your metric the amount of government spending as a percentage of GDP. In the US that number has been on a steady upward trend throughout the last century. Is this not correct?

Posted by: Glen Raphael | Dec 20, 2004 3:16:53 PM


Posted by: chainlink

At this level of generality, I don't find much to object to in Herzog's post. As I recall, Hayek himself rejected "laissez faire" as a typical manifestation of reductionist French rationalism: properly functioning markets have to be _constructed_ by legal and political means, and on the basis of experience.

I think the interesting questions are rather more specific, like "Should the U.S., as Democrats seem to assume, be trying to become more like Europe in its attitude toward the market?"

And I personally don't think so.

Posted by: chainlink | Dec 20, 2004 3:18:43 PM


Posted by: D.A. Ridgely

For what it’s worth, I often use “statist” and “collectivist” not as an insult but because I don’t hear those terms as carrying the negative connotative weight that “socialist” does and I don’t think most people do either. Of course, I could be wrong about that, but I don’t intend the terms pejoratively. Most liberals are not socialists, per se, but they do tend to favor state-controlled and collective solutions to all sorts of economic problems. (Social Security, single-payer (i.e., government payer) health care, government redistribution of wealth for various reasons, regulation of virtually all economic activity, etc.) Non-market proponents tend to be government proponents. For that matter, in what sense is contemporary liberalism “progressive”?

Posted by: D.A. Ridgely | Dec 20, 2004 3:36:56 PM


Posted by: Dave M

Daniel M. As Terrier said, the right tends to assert exclusive ownership of certain intellectuals - John Locke, Adam Smith, Tocqueville, the "Founders," etc. They try to claim unilateral control over their influences, pretending that they go into political battle with giants at their sides. They react hostilely to any attempt by those they disagree with to challenge that talismanic invocation.

You can see the process unfolding before your eyes: look at George Orwell, who has gone from an actually existing anarchist socialist humanitarian to a cudgel to be used against those who aren't militaristic enough. The same process is unfolding with Raymond Aron.

Does the left to the same thing? Not that I can see, though I would enjoy some counter examples.

I agree that, margins aside, modern liberals and conservatives draw on much of the same intellectual body, that body being the core of the enlightenment itself. If you disagree with the conservative effort to deny this common heritage, then by all means, shout it from the rooftops.

Posted by: Dave M | Dec 20, 2004 3:39:12 PM


Posted by: Danirl M.

Dave M., what terrier said was "Dave M., you miss their point. You and I know we have liberal ancestors but as far as the libertarians are concerned all those ancestors are their property and you and I are the spawn of stupid Marixists."

I don't deny that you have big "L" ancestors. They are ALL our ancestors - the little "l's" and the little "r's" together. Our interpretation of their legacy is what separates us. There is not one intelligent republican that would maintain (with a straight face, at least) that liberals were the spawn of Marxists - Marxist thought never truly took hold in America. (I think the marxist thing is a persecution complex anyway - I've never heard that said in all my years as a practicing republican.) That today's republicanism (interpretively)is as Lockean as today's liberalism (again, interpretively) is as plain to me as the nose on my face.

Locke never said he wanted socialized medicine.
Locke never said he wanted a separation of church & state.
Locke never said a lot of things, but it is true that you can posit he would have believed this or that (or wanted this or that) as a result of his existing philosophy. But it is merely projection and conjecture- of one man's ideas! And he stood on the shoulders of giants!

Posted by: Danirl M. | Dec 20, 2004 3:55:02 PM


Posted by: Daniel M.

Dave M., what terrier said was "Dave M., you miss their point. You and I know we have liberal ancestors but as far as the libertarians are concerned all those ancestors are their property and you and I are the spawn of stupid Marixists."

I don't deny that you have big "L" ancestors. They are ALL our ancestors - the little "l's" and the little "r's" together. Our interpretation of their legacy is what separates us. There is not one intelligent republican that would maintain (with a straight face, at least) that liberals were the spawn of Marxists - Marxist thought never truly took hold in America. (I think the marxist thing is a persecution complex anyway - I've never heard that said in all my years as a practicing republican.) That today's republicanism (interpretively)is as Lockean as today's liberalism (again, interpretively) is as plain to me as the nose on my face.

Locke never said he wanted socialized medicine.
Locke never said he wanted a separation of church & state.
Locke never said a lot of things, but it is true that you can posit he would have believed this or that (or wanted this or that) as a result of his existing philosophy. But it is merely projection and conjecture- of one man's ideas! And he stood on the shoulders of giants!

Posted by: Daniel M. | Dec 20, 2004 3:57:57 PM


Posted by: frankly0

Use as your metric the amount of government spending as a percentage of GDP. In the US that number has been on a steady upward trend throughout the last century. Is this not correct?

In the US, probably so. In Europe, so far as I'm aware, probably not; it's mostly been stable for some number of years or decades, fluctuating to a small degree up and down from country to country. Clearly the US looks to Europe, sees some things that it likes, and adopts them over time, over the kicking and screaming of our right wing. Health care is probably next, though God knows when.

All in all, there is an optimal point of government involvement in the economy, and it's more likely to be found in European economies than in the American economy. Mainly this seems true precisely because the degree of government involvement in European economies seems to be reasonably stable, with various programs coming in and out of governmental control. This suggests a convergence toward a stable, optimal equilibrium point.

It is certainly hard to look at the European economies and societies and declare that they are failures, compared to the US, on any metric most people should care about.

Posted by: frankly0 | Dec 20, 2004 4:10:54 PM


Posted by: Dave M

The amount of government spending as a percentage of GDP dropped in the US throughout the nineties. http://www.cbo.gov/showdoc.cfm?index=3521&sequence=0

Posted by: Dave M | Dec 20, 2004 4:17:03 PM


Posted by: Joe

I come for the articles...and stay for the name calling.

Posted by: Joe | Dec 20, 2004 4:24:17 PM


Posted by: Tom Pain

frankly0:

See _Cowboy Capitalism: European Myths, American Reality_ by Olaf Gersemann.

http://urlshrink.net?i=269

Clearly Europe is not the rosy utopia you faithfully believe it is.

Posted by: Tom Pain | Dec 20, 2004 4:25:35 PM


Posted by: frankly0

Clearly Europe is not the rosy utopia you faithfully believe it is.

Did I say Europe was a utopia? Would you in any seriousness declare that the US with its many problems is?

On balance, it's very difficult to look at some of the more successful industrialized democracies in Europe, such as Germany and Sweden, and pronounce them as less successful societies than our own. On many metrics that real people really care about, they are clearly better performers.

Posted by: frankly0 | Dec 20, 2004 4:30:46 PM


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