Friday, 30 May 2014

Hume & Humboldt

Divergent dichotomies are not unusual to be found in Hayek’s writings. Besides the essay “Two Types of Mind”, we have his 1945 lecture “Individualism: True and False” on the difference between the British Enlightenment and the Continental Rationalism. Grounded in Edmund Burke’s Appeal from the New to the Old Whigs, Hayek traces the origin of true individualism to Bernard Mandeville, David Hume, Josiah Tucker, Adam Ferguson, Adam Smith and Edmund Burke himself. The XIX Century adds Lord Acton and Alexis de Tocqueville to the list. On the other hand, Hayek states that Jean Jacques Rousseau exemplifies the Rationalist individualism, which postulates isolated and self-contained individuals –whereas, for the former, the individual is determined by his existence in society. The “true variant” of individualism is the notion of “subject” of Hume’s philosophy: the outcome of repetitions, expectancies and habits. Finally Hayek concludes his lecture with the censure to the German type of individualism, rooted in Wolfgang v. Goethe and Wilhelm v. Humboldt: the individualism expressed in the original development of the personality and defended in J. S. Mill’s On Liberty.

Notwithstanding in this 1945 lecture Hayek claims that this German individualism of self-development has nothing to do with what he regards as true individualism and it is “an obstacle to the smooth working of an individualistic system”, much later, in “Law, Legislation, and Liberty”, he will restate his opinion on Wilhelm v. Humboldt’s legacy.

This reconsideration of the value of liberty as the development of the unique and particular character of an individual will be acknowledge not only regarding legal theory but as well in his 1976 proposal of denationalization of currency. In his late writings, Hayek will endorse the development of the originality of character as an important trait for the competition to work as a discovery process.

The key to understand his shift onto this new type of individualism is closely related to Hayek’s involvement into the ideas of cultural evolution. The “true individualism” was important to state how a society can achieve certain order. The “Humboldt’s individualism” is needed to explain the dynamic of the evolution of that order. Hume’s notion of subject is related to the ideas of integration and convergence, to how an order may emerge. Humboldt’s ideal of self-development of the unique and original character of each individual implies differentiation and divergence. These two traits are the key to the adaptation to the changes in the environment that defines the notion of blind evolution. A social and political system that assures the development of differences has keen aptitudes to survive to the changes in its environment. At the level of the “true individualism”, individuals are made of institutions, repetitions and expectancies. But at the level “Humboldt´s individualism”, successful institutions are made of differences, divergent series of facts and adaptation.

Friday, 18 January 2013

Abstraction, Evolution, & Rationality


The late Hayek –the Hayek of the third volume of “Law, Legislation, and Liberty”, not the Hayek of the Fatal Conceit, that would be the apocryphal one- was concerned with terminological matters related to his own works. He lamented that he had employed “knowledge” instead of “information” at the beginning of his career and blamed the confusion on a semantic shift experienced in English language from the 1930’s to the 1970’s. He claimed that he never attempted to use “knowledge” as “theoretical knowledge”, but as, more precisely, “information”, as it was understood forty years before.

 But even a terminological shift occurs from the first volume of “Law, Legislation, and Liberty” (1973) to the third one (1979). In the latter, Hayek claimed that the term “abstract order” was more accurate than “spontaneous order” to convey the meaning of what he wanted to state.  Given some sort of environment –biological, legal, geographical-, the social orders which will survive and develop will be those in which the conduct of the individuals follows some sort of patterns (other orders, with different patterns of social conduct, will disappear or never emerge). For example, if the end of the world will be in a year’s time, a society of defaulters will be more adapted to the environment than a society whose members accomplish their long term duties.  Those patterns are spontaneous because nobody mandates to obey them, but also are abstract because its acknowledgement depends on an intellectual operation. Their recognition does not rely on the senses but on the identification of regularities.

This concept of “abstract order” is the place where Hayek’s legal studies (Law, Legislation and Liberty) connect with his work on theoretical psychology (The Sensory Order). The rationality of the individuals does not make a rational order, but it is the abstract order which delivers rationality to the individuals in it, since the given order is made of the norms that allowed it to survive and develop. The subjective rationality of the agents is bounded by a set of norms of conduct grown from the evolutionary process –and at this point Hayek meets Max Weber.

The question is whether we can determine any criteria to assert that some type of normative order is better than other one. Perhaps the answer is the Hayekian version of the invisible hand process: the better orders are those which allow the individuals to coordinate the bits of information they possess and employ to fulfil their own plans of life and, as an unintended consequence of this, the whole system, spontaneously, adapts itself to the changes in the environment.

Saturday, 1 December 2012

Turner & Goethe

In the basement of Tate Britain Gallery one can find the studies of vision by J. M. W. Turner, regarding on how to produce on the eye of the observer a sensation of colour by just printing onto a lithography a set of tiny black lines, one close to another, leaving a white background. The eye, as a perception device, does not register each black fine line, but receives a spectrum of different colours from the decomposed white background, cut by the said black lines. In that exhibition you are learnt that, at the same time, J. W. Goethe was also studying this kind of phenomena. In fact, he wrote two books related to the matter: one essay, “Theory of Colours” (Zur Farbenlehre) and one novel “Elective Affinities” (Die Wahlverwandtschaften) –the latter concerning how chemistry has influence over human passions and institutions.

Similar subjects were analyse in F. A. Hayek’s “The Sensory Order”, where he stated that “There exists, therefore, no one to one correspondence between the kinds (or the physical properties) of the different physical stimuli and the dimensions in which they can vary, on one hand, and the different kinds of sensory qualities which they produce and their various dimensions on the other”. This formulation can be taken as an enunciation of the Hayekian critic to the Cartesian Dualism, which he would later refer to in Law, Legislation and Liberty. That is why “The Sensory Order” cannot be just regarded as a book on theoretical psychology. It is a book concerning how a system of information can adapt to its environment despite it does not carry completely accurate information about it  –just the degree of accuracy it needs to survive and reproduce.
We can recognize continuity –although heterogeneous continuity- along Hayek’s works. In his celebrated paper “The Use of Knowledge in Society”, he remarks that it does not matter if the rise in the price of a commodity may obey to an increasing demand or a falling supply of it –in any case, an increasing relative scarcity- and that it is relevant that it does not matter at all. The decisions of the economic agents are taken on the base of profits and losses, disregarding the subjacent movements in the supply and demand of commodities that caused the change in the relative scarcities of them. That is how a social system can survive and adapt to the changes of its environment, allocating its resources spontaneously, although none of its members can achieve a complete knowledge of the variables operating on it. The same as we enjoy a work of art by Turner or the time we spend with our friends, ignoring the secret resorts that make them so attractive to us.

Tuesday, 12 June 2012

On the Epistemic Value of Liberty


We would not hesitate to endorse Fritz Machlup as one of the most accurate analyst of Hayek’s works. Here, writing about Hayek’s papers afterwards The Constitution of Liberty, he states: “This great work done, Hayek did not rest. He could not let go of a topic on which he found so much more to do. In an article in German (“Die Ursachen der ständigen Gefährdung der Freiheit”, Ordo, 12, 1961) he asks why it is that personal liberty is in continual jeopardy and why the trend is toward its being increasingly restricted. The cause of liberty, he finds, rests on our awareness that our knowledge is limited. The purpose of liberty is to afford us an opportunity to obtain something unforeseeable; since it cannot be known what use individuals will make of their freedom, it is all the more important to grant freedom to everybody (p. 103). Liberty can endure only if it is defended not just when it is recognized to be useful in particular instances but rather continuously as a fundamental principle which may not be breached for the sake of any definite advantages obtainable at the cost of its suspension (p. 105). It is not easy to convince the masses that they should sacrifice foreseeable benefits for unforeseeable ones.” (Machlup, Fritz, "Hayek's Contribution to Economics", edited in Essays on Hayek, Routledge & Kegan Paul, London, 1977)
Machlup’s summary of Hayek’s statement on the value of individual liberty offers a reason that is neither substantialist nor instrumental. In this context, although the “instrumental reason” would lead us to a disregard of  the individual liberty in order to achieve a concrete end, his defense of liberty is not based on a substantial truth, but on an epistemic value.

Sunday, 29 April 2012

Does Classical Liberalism Belong to the Fantastic Genre?

In 1970, Tzvetan Todorov characterised the fantastic genre as a subjective, doubtful, and fugitive branch of literature. As soon as the reader finishes a fantastic story, his mind is full of uncertainties on the explanation of its ending. He doubts whether the story conveys a super natural element or it could be understood as an oddity, something strange but realistic. Todorov stated that the story belonged to the fantastic genre only during the time the reader took to choose the former or the latter explanation. Since he inclined towards one of them, the story shifted either onto the fantastic marvellous genre or onto the fantastic uncanny one.

I think Classical Liberalism has much of the sort. To use Hayek's terminology, it navigates between the waters of Constructivism and Conservatism. Classical Liberalism tends to distrust on the involvement of government in education, but at the same time it promotes the individual intellectual emancipation. Classical liberals endorse a competitive economic system, but are not fond of anti-trust policies. Almost in every relevant matter we could find these crossroads. It seems Classical Liberalism walks on "the edge of the razor". We are tempted to state that Classical Liberalism lasts the time we are pondering whether to take a Constructivist or a Conservative approach.

I think the“Constructivist explanation” and the “Conservative explanation” are both shortcuts to cope with the complexity of the social order disregarding change. On the other hand, the Classical Liberalism Friedrich Hayek tried to restate was a cultural evolutionist one. An Evolutionist Classical Liberalism is made of principles which adjust their relative positions in response to the changes in the environment. Sometimes this adjustment is made by a theorist, but most of the times it is the social reality itself, acting as a sort of feedback system, that provokes the shift in the balance of principles. The main point to keep in mind is that this process of weighing principles is blind. So, no one could assess “the course of the History” (a common point of view to Conservatism and Constructivism, by the way).

In resume, Classical Liberalism will keep its own identity as long as it remains loyal to its evolutionist trait.

Sunday, 15 April 2012

Two Ideals of Constitution

For every Hayekian is a hard task to explain to his critics why the political process described in The Road to Serfdom did not finally lead to a totalitarian state, as book had warned it would happen if economic dirigism kept on growing in the United Kingdom, for example. To many of its critics, The Road to Serfdom states a failed prediction. In this post, I will try to formulate some sort of "hypothesis ad hoc" to rehabilitate "the road to serfdom" as a prediction.
As we had noted in a previous post, the core of Hayek's book is not related to the assertion "every economic intervention means limitations to individual liberty that lead to further economic intervention and so on to a totalitarian state". That is a misled conclusion to Hayek's idea. What Hayek tried to convey was that economic dirigism distorts the relative prices of the economy, what causes an economic crisis, and that the urgency to solve that crisis demands solutions on the basis of expediency. In those situations, it is easy to fall in the mistake to consider constitutional procedures as burdens to be lightened in order to overcome the crisis. Then, the process could be summarise as follows: "An economic intervention distorts relative prices, which generates a crisis. The urgency to solve the crisis authorises exceptions to constitutional procedures in order to apply new economic interventions. Those new measures cause new crises, which demand further expedient solutions -and the subsequent erosion of the rule of law".
My proposal is related to the late Hayek and his investigations on the role of unwritten law in the defence of individual liberty. In this regard, Hayek noted that individual liberties flourished in countries where the law was formed mainly by judiciary precedents and that statutory law could empower legislatures to enlarge the political intervention into every side of individual life (see "Law, Legislation and Liberty"). Besides now this is a very contemporary discussion -the clash between democracy and human rights-, it inspired me a different approach to the question. We can note that countries with high respect to individual freedom have short or unwritten constitutions, and countries with poor records in respect to individual rights have extensive and sophisticated written constitutions.
What I would like to state is that, along the 20th democracies, we could find two different ideals of political constitution. In countries with a tradition of individual liberties, the political constitution is considered as a limit by the rule of law to the political power. In countries where individual freedom was threaten or attacked, political constitutions are considered as instruments of political power. Notwithstanding to have written procedures to exercise political powers is a limit to the latter and it is better than not to have any legal procedure at all, we can see that this concept of constitution is more exposed to follow the pattern stated by Hayek in his book "The Road to Serfdom".
I think we have here a contention subject to empirical test: we have to identity countries with political constitutions regarded as limits to the political power imposed by the law and countries with political constitutions considered as attributions bestowed by the law upon political powers. Then, we have to verify the correlation between each of those countries and the degree of respect to individual liberties fulfilled in them. Since the identification of the ideals of constitution -limitation to political powers by the law vs. attribution of legality to political power- is the most difficult task, we could take the extension or sophistication of the constitution as an indicator of each type.
 

Saturday, 14 January 2012

The concept of “dispersed knowledge” should be a commonplace!

I dare to state that the world would be a better place to live in if the concept of “dispersed knowledge” were a commonplace. Perhaps it is an elusive idea and that is why every now and then political intervention regards itself as the saviour from the “chaos of the market”.

But what most people are used to call “chaos” is, in fact, “complexity”. Every single rational agent is an administrator of the bits of information gathered by him from the limited range of his experience, using devices of perception, such as senses, social values, norms, and technologies. The said devices are mostly common to other agents and thus contribute to make the compatibility of several individual plans, the most of them unknown to each other, possible –and the stability of the social order rests on the degree of such compatibility.
As we said, social spontaneous conventions as language, monetary economy, trade, morals, and law systems –along with many others- are devices used by the these agents to cope with the complexity of an order of things built on a framework of plans of multiple individuals, most of them yet undiscovered. It is a complex order of facts, but it is an order still: spontaneous conventions make of the multiple bits of information from the different individual plans a coordinated set of resources applied to carry out the most of them. It is a complex system of coordination of knowledge, with gaps and perturbations, but it is a system that can deal with a higher amount of information than any individual or committee would be able to do.

Since our concept of rationality is mostly instrumental, regarding as “rational” a set of resources deliberately applied to attain a known aim, it is easy to consider the complex order resulting from spontaneous coordination of individual plans as “irrational” -and this charaterisation gains strength with every new crisis. At this point, what we have to notice is that the net benefits rendered by the extended society –i.e.: the spontaneous coordination of the dispersed knowledge from multiple individual plans and institutions- are higher than what any other alternative system of organization of human beings could bring about. The consequence of the argument is that dispersed knowledge is both a burden to central planning and lever to the open society.
We know that almost the whole work of F. A. Hayek is devoted to this quest, but if I had to choose a single paper that keeps the kernel of this philosophy I would choose “The Use of Knowledge in Society”. This would be a good starting point to make the idea of “dispersed knowledge” part of our cultural background, like heliocentrism or Gödel’s theorem.