Re: Political Economy & Liberal Democracy
(#60622)
by Gus diZerega on May 14, 2005 at 3:54 PM
by Gus diZerega on May 14, 2005 at 3:54 PM
Here are some brief comments on your questions, Chris.
You ask:
WHAT DO YOU SEE AS THE RELATIONSHIP BETWEEN POLITICAL ECONOMY AND LIBERAL DEMOCRACY? I'VE OFTEN CHARACTERIZED TODAY'S POLITICAL ECONOMY AS A KIND OF "NEOCORPORATISM." DO YOU THINK A LIBERAL DEMOCRACY COULD BE SUSTAINED IN THAT POLITICAL-ECONOMIC CONTEXT? HOW DO YOU RESPOND TO THOSE WHO WOULD ARGUE THAT SUCH A LIBERAL DEMOCRACY FUELED THE EMERGENCE OF "INTEREST-GROUP" LIBERALISM, AND, THUS, THE EMERGENCE OF THE REGULATORY STATE? IN OTHER WORDS, WHAT ROLE DOES LIBERAL DEMOCRACY PLAY IN THE ESTABLISHMENT OF "ORGANIZATIONS" THAT ARE ANATHEMA TO THE SUSTENANCE OF ... LIBERAL DEMOCRACY? ARE THERE INTERNAL CONTRADICTIONS HERE?
Really perceptive questions, as usual. Here are my thoughts on them, briefly.
I think your characterization is accurate, and that one of the unsolved problems in the classical liberal tradition is that if we are to have both democracies and corporations, how do we prevent the latter from subverting the former? I know that many classical liberals will say “Don't you have it backwards?” I don't think so, though causality flows both ways, the dominant causality flows that way.
Evidence? That corporations were central to many efforts to centralize government in Washington. Further, a Hayekian analysis will underline that the interests of big organizations and the interests of the market are opposed. Corporations want stability and control, markets undermine both. Their approaches to patent law and copyright are the opposite of what the market uses best: they try and bring ever more information under private ownership. Anyone who thinks that big business is in support of economic freedom simply is naïve. They are supportive of economic freedom for them selves when it is profitable, and any other way of making a buck when it is not.
The risk here is what we see happening in Washington today: the creation of our first national political machine. Civil service was created not primarily to give safe jobs, though everyone knew that would be a result, but to prevent machines from having access to labor and money. Now Republican style “contracting out” is doing an end run around civil service, but because the money provided is then in part given back in the form of campaign help, there is no incentive to decrease spending. Quite the opposite. Only genuine conservatives who think the Republican party is conservative should be confused about its behavior. They use market rhetoric to create a very unmarked outcome.
That government has access to coercive power makes it a target of every private interest that can imagine giving itself a privilege. My own work is to try and develop areas where we can shift serving public interests and values away from government towards civil society the better to insulate them from that kind of corruption. However, alas, I think a certain amount of corruption is inherent in human affairs, be they corporate or government or ecclesiastical or anything else. :-(
I think the issue of internal contradictions is vital. My own work emphasizes that all emergent orders share a common internal contradiction between the conditions sustaining the order and the circumstances desired by the organizations that arise within them. I guess the Founders' term “eternal vigilance” is all we can hope for here.
In addition, the different emergent orders themselves, while analytically distinct, in practice interpenetrate, and this interpenetration leads to contradictions. I explored one such case, the media, in my article in The Review of Politics, Summer, 2004. I do not have solutions - I think first we need to see that there is a problem and that the problem cannot be resolved by automatically preferring one such order over all the others. Then lots of creative minds can get to work on them.
CHRIS CONTINUES:
TANGENTIAL TO THIS, BUT STILL CONCERNED WITH POLITICAL ECONOMY: WHILE SOME MAY BE "ATTEMPTING TO FREE THE STATE INSTITUTIONS FROM THEIR SUBORDINATION TO DEMOCRATIC PROCESSES," ISN'T IT ALSO TRUE THAT THERE ARE MANY INSTITUTIONS ALREADY THAT ARE NOT SUBORDINATED TO DEMOCRATIC PROCESSES (PARTICULARLY IN THE REALM OF MONEY, BANKING, AND THE REGULATORY APPARATUS)---AND WHAT ARE THE IMPLICATIONS HERE FOR THE SUCCESS OF LIBERAL DEMOCRACY?
Here I will punt a bit! I am not an economist. In high school and as a college student I was always reading about how all these things were bad and total catastrophe was around the corner. It never happened. On the other hand - is it really good to have enormous privileged banks open mostly to equally enormous privileged businesses? I do not feel I have any expertise on money and banking issues, and leave them for the economists to fight out.
As to regulation, I think there is a learning curve going on. That is, the old Progressive era approaches have been discredited and I think democracies are discovery and learning systems just as are markets. Most classical liberals really do not appreciate how much the “other” liberals have abandoned faith in such approaches. Often they support using market mechanism.
Now someone will say, it's still regulation. Yes, it is. But I do not think all relevant externalities can be internalized, for reasons already discussed on this site not long ago by me and others. Property rights are essentially Newtonian in their form: discrete, bounded, defensible. At certain scales this works just fine. At other scales, problems appear. Just like with Newtonian physics, and for the same reason: the world is ultimately not atomistic.
For example, when effects get too hard to tie to responsible causes regulation of some sort seems to me a wise approach - think of air pollution by automobiles and non-point water pollution from agricultural runoff. Indeed, it was at the ecological level that I first came to what I decided were major weaknesses with classical liberal analysis. The point is not to become a Progressive or what-have-you. The point is to then try and figure out what to do. For example, the Endangered Species Act has a lot of problems. But not having one at all would have even worse problems. A job worth doing is worth doing badly rather than not at all. But it can be improved.
Another point. American bureaucracies arose after a democratic order was established. European ones were devised by undemocratic systems, and democratic parliaments inherited them. They work differently, and most of what everyone “knows” about bureaucracies is based on European models. One example, at least until Bush began trying to undo American democracy, our bureaucracies were more and more open to citizen input, input with teeth, that made arbitrary rulings very difficult. Now, ironically with the cheering of conservatives who claim to dislike bureaucracies, they are being more and more shielded from openness and responsibility for their actions. Becoming more like the European model. Such is “patriotism” in the idiot Right. (James Q. Wilson has written some perceptive stuff here.)
Finally, I think that classical liberals need to really take a long and careful look at Tocqueville's work on civil society. He is describing a spontaneous order, and even uses Smith's invisible hand terminology. But it is not a market and it is not government. Here I think lie enormous riches to be mined, riches mostly being ignored by the tendency of classical liberals to subsume civil society into the market, so that they cannot theoretically grasp what is obvious to all- corporations are for many important purposes not analogous to small businesses.
My book Persuasion, Power, and Polity explored how most public values could be served at least potentially outside the realm of government as a coercive institution. It was in my opinion a pretty good first try. As I have grumped before, it was read by a few, never reviewed, and is now out of print. I know you offered to review it for critical review, and were turned down! You have had similar problems as I understand it. Such is the openness of much of the libertarian and classical liberal intellectual community to new takes within the classical liberal framework!
CHRIS ASKS-
WHAT DO YOU SAY TO THOSE WHO WOULD LIKE TO IMPOSE SOME KIND OF "RULE OF LAW" ON ~OTHER~ SOCIETIES, IN THE HOPES OF "MOLDING THEM" WITH A LIBERAL-DEMOCRATIC FRAMEWORK (E.G., IRAQ)? IN OTHER WORDS, WHAT VALIDITY IS THERE TO THE "NATION-BUILDING" QUEST FOR LIBERAL DEMOCRACY, OR IS THIS SOME KIND OF INVERSION OF THE NATURE OF "SPONTANEOUS ORDER"?
I think it is criminal, immoral, and hideous. Here I take my Hayekianism pretty seriously. Societies cannot be easily molded, the task is too complex, local knowledge is too important. California tried to develop a framework for community control of ground water basins based on generalizing from successful independently devised models. It failed because the local factors were so important. This was for water basins close by the ones that had been successfully organized by local efforts. If we cannot do this, how in the name of God can we re-create Iraq?
Further, the more I learn about the impact of western imperialism, the worse it stinks at every level. Western imperialism killed millions - on a scale that proportionately is not necessarily that much better than what happened in Communism. It did it differently. But it did it. And in the process developed many of the institutions later put to such use by the Communists and Nazis, such as concentration camps.
I think the best we can do is set an example and encourage others to adapt that example to their own circumstances. I do think we should have as little to do as possible with undemocratic governments. When the country is important - such as China - we still have to deal with them a lot. But smaller countries that we do not have to deal with should be made clear pay a price for the forms of government they have. But the price should not be in being bombed or occupied by us.
I do differ from my more firmly anti-interventionist colleagues on two issues. First, I think that the doctrine of state sovereignty is such bunk that we are justified in invading and stopping any government that is committing mass murder on its own people. Whether we should do it in a [particular case is a prudential issue. But in principle I see nothing wrong with doing so, any more than I see nothing wrong with tax supported police in California intervening to stop a murder taking place in front of them across the border in Nevada.
Second, because I think democracies are not states, I think we are justified in invading any country whose democracy government has been overthrown and a state put in its place, or invades a democracy, to re-establish the democracy. Again, whether this is the wise thing to do cannot be made a general rule. But I have no objection to doing such in principle. Democracies do not fight one another. Other governments do, as well as fighting democracies. Further, democracies do not kill their own citizens in huge numbers (US civil war excepted, and I think it is a special case) and undemocratic governments do.
In both these un-libertarian exceptions this is best done for obvious reasons with volunteer troops. And again, I do not say we should do these interventions, I say we have no principled block against doing them. Each case can be evaluated on its merits.
So these, quickly and probably too superficially, are my replies to your questions. And again, very good questions they are!
You ask:
WHAT DO YOU SEE AS THE RELATIONSHIP BETWEEN POLITICAL ECONOMY AND LIBERAL DEMOCRACY? I'VE OFTEN CHARACTERIZED TODAY'S POLITICAL ECONOMY AS A KIND OF "NEOCORPORATISM." DO YOU THINK A LIBERAL DEMOCRACY COULD BE SUSTAINED IN THAT POLITICAL-ECONOMIC CONTEXT? HOW DO YOU RESPOND TO THOSE WHO WOULD ARGUE THAT SUCH A LIBERAL DEMOCRACY FUELED THE EMERGENCE OF "INTEREST-GROUP" LIBERALISM, AND, THUS, THE EMERGENCE OF THE REGULATORY STATE? IN OTHER WORDS, WHAT ROLE DOES LIBERAL DEMOCRACY PLAY IN THE ESTABLISHMENT OF "ORGANIZATIONS" THAT ARE ANATHEMA TO THE SUSTENANCE OF ... LIBERAL DEMOCRACY? ARE THERE INTERNAL CONTRADICTIONS HERE?
Really perceptive questions, as usual. Here are my thoughts on them, briefly.
I think your characterization is accurate, and that one of the unsolved problems in the classical liberal tradition is that if we are to have both democracies and corporations, how do we prevent the latter from subverting the former? I know that many classical liberals will say “Don't you have it backwards?” I don't think so, though causality flows both ways, the dominant causality flows that way.
Evidence? That corporations were central to many efforts to centralize government in Washington. Further, a Hayekian analysis will underline that the interests of big organizations and the interests of the market are opposed. Corporations want stability and control, markets undermine both. Their approaches to patent law and copyright are the opposite of what the market uses best: they try and bring ever more information under private ownership. Anyone who thinks that big business is in support of economic freedom simply is naïve. They are supportive of economic freedom for them selves when it is profitable, and any other way of making a buck when it is not.
The risk here is what we see happening in Washington today: the creation of our first national political machine. Civil service was created not primarily to give safe jobs, though everyone knew that would be a result, but to prevent machines from having access to labor and money. Now Republican style “contracting out” is doing an end run around civil service, but because the money provided is then in part given back in the form of campaign help, there is no incentive to decrease spending. Quite the opposite. Only genuine conservatives who think the Republican party is conservative should be confused about its behavior. They use market rhetoric to create a very unmarked outcome.
That government has access to coercive power makes it a target of every private interest that can imagine giving itself a privilege. My own work is to try and develop areas where we can shift serving public interests and values away from government towards civil society the better to insulate them from that kind of corruption. However, alas, I think a certain amount of corruption is inherent in human affairs, be they corporate or government or ecclesiastical or anything else. :-(
I think the issue of internal contradictions is vital. My own work emphasizes that all emergent orders share a common internal contradiction between the conditions sustaining the order and the circumstances desired by the organizations that arise within them. I guess the Founders' term “eternal vigilance” is all we can hope for here.
In addition, the different emergent orders themselves, while analytically distinct, in practice interpenetrate, and this interpenetration leads to contradictions. I explored one such case, the media, in my article in The Review of Politics, Summer, 2004. I do not have solutions - I think first we need to see that there is a problem and that the problem cannot be resolved by automatically preferring one such order over all the others. Then lots of creative minds can get to work on them.
CHRIS CONTINUES:
TANGENTIAL TO THIS, BUT STILL CONCERNED WITH POLITICAL ECONOMY: WHILE SOME MAY BE "ATTEMPTING TO FREE THE STATE INSTITUTIONS FROM THEIR SUBORDINATION TO DEMOCRATIC PROCESSES," ISN'T IT ALSO TRUE THAT THERE ARE MANY INSTITUTIONS ALREADY THAT ARE NOT SUBORDINATED TO DEMOCRATIC PROCESSES (PARTICULARLY IN THE REALM OF MONEY, BANKING, AND THE REGULATORY APPARATUS)---AND WHAT ARE THE IMPLICATIONS HERE FOR THE SUCCESS OF LIBERAL DEMOCRACY?
Here I will punt a bit! I am not an economist. In high school and as a college student I was always reading about how all these things were bad and total catastrophe was around the corner. It never happened. On the other hand - is it really good to have enormous privileged banks open mostly to equally enormous privileged businesses? I do not feel I have any expertise on money and banking issues, and leave them for the economists to fight out.
As to regulation, I think there is a learning curve going on. That is, the old Progressive era approaches have been discredited and I think democracies are discovery and learning systems just as are markets. Most classical liberals really do not appreciate how much the “other” liberals have abandoned faith in such approaches. Often they support using market mechanism.
Now someone will say, it's still regulation. Yes, it is. But I do not think all relevant externalities can be internalized, for reasons already discussed on this site not long ago by me and others. Property rights are essentially Newtonian in their form: discrete, bounded, defensible. At certain scales this works just fine. At other scales, problems appear. Just like with Newtonian physics, and for the same reason: the world is ultimately not atomistic.
For example, when effects get too hard to tie to responsible causes regulation of some sort seems to me a wise approach - think of air pollution by automobiles and non-point water pollution from agricultural runoff. Indeed, it was at the ecological level that I first came to what I decided were major weaknesses with classical liberal analysis. The point is not to become a Progressive or what-have-you. The point is to then try and figure out what to do. For example, the Endangered Species Act has a lot of problems. But not having one at all would have even worse problems. A job worth doing is worth doing badly rather than not at all. But it can be improved.
Another point. American bureaucracies arose after a democratic order was established. European ones were devised by undemocratic systems, and democratic parliaments inherited them. They work differently, and most of what everyone “knows” about bureaucracies is based on European models. One example, at least until Bush began trying to undo American democracy, our bureaucracies were more and more open to citizen input, input with teeth, that made arbitrary rulings very difficult. Now, ironically with the cheering of conservatives who claim to dislike bureaucracies, they are being more and more shielded from openness and responsibility for their actions. Becoming more like the European model. Such is “patriotism” in the idiot Right. (James Q. Wilson has written some perceptive stuff here.)
Finally, I think that classical liberals need to really take a long and careful look at Tocqueville's work on civil society. He is describing a spontaneous order, and even uses Smith's invisible hand terminology. But it is not a market and it is not government. Here I think lie enormous riches to be mined, riches mostly being ignored by the tendency of classical liberals to subsume civil society into the market, so that they cannot theoretically grasp what is obvious to all- corporations are for many important purposes not analogous to small businesses.
My book Persuasion, Power, and Polity explored how most public values could be served at least potentially outside the realm of government as a coercive institution. It was in my opinion a pretty good first try. As I have grumped before, it was read by a few, never reviewed, and is now out of print. I know you offered to review it for critical review, and were turned down! You have had similar problems as I understand it. Such is the openness of much of the libertarian and classical liberal intellectual community to new takes within the classical liberal framework!
CHRIS ASKS-
WHAT DO YOU SAY TO THOSE WHO WOULD LIKE TO IMPOSE SOME KIND OF "RULE OF LAW" ON ~OTHER~ SOCIETIES, IN THE HOPES OF "MOLDING THEM" WITH A LIBERAL-DEMOCRATIC FRAMEWORK (E.G., IRAQ)? IN OTHER WORDS, WHAT VALIDITY IS THERE TO THE "NATION-BUILDING" QUEST FOR LIBERAL DEMOCRACY, OR IS THIS SOME KIND OF INVERSION OF THE NATURE OF "SPONTANEOUS ORDER"?
I think it is criminal, immoral, and hideous. Here I take my Hayekianism pretty seriously. Societies cannot be easily molded, the task is too complex, local knowledge is too important. California tried to develop a framework for community control of ground water basins based on generalizing from successful independently devised models. It failed because the local factors were so important. This was for water basins close by the ones that had been successfully organized by local efforts. If we cannot do this, how in the name of God can we re-create Iraq?
Further, the more I learn about the impact of western imperialism, the worse it stinks at every level. Western imperialism killed millions - on a scale that proportionately is not necessarily that much better than what happened in Communism. It did it differently. But it did it. And in the process developed many of the institutions later put to such use by the Communists and Nazis, such as concentration camps.
I think the best we can do is set an example and encourage others to adapt that example to their own circumstances. I do think we should have as little to do as possible with undemocratic governments. When the country is important - such as China - we still have to deal with them a lot. But smaller countries that we do not have to deal with should be made clear pay a price for the forms of government they have. But the price should not be in being bombed or occupied by us.
I do differ from my more firmly anti-interventionist colleagues on two issues. First, I think that the doctrine of state sovereignty is such bunk that we are justified in invading and stopping any government that is committing mass murder on its own people. Whether we should do it in a [particular case is a prudential issue. But in principle I see nothing wrong with doing so, any more than I see nothing wrong with tax supported police in California intervening to stop a murder taking place in front of them across the border in Nevada.
Second, because I think democracies are not states, I think we are justified in invading any country whose democracy government has been overthrown and a state put in its place, or invades a democracy, to re-establish the democracy. Again, whether this is the wise thing to do cannot be made a general rule. But I have no objection to doing such in principle. Democracies do not fight one another. Other governments do, as well as fighting democracies. Further, democracies do not kill their own citizens in huge numbers (US civil war excepted, and I think it is a special case) and undemocratic governments do.
In both these un-libertarian exceptions this is best done for obvious reasons with volunteer troops. And again, I do not say we should do these interventions, I say we have no principled block against doing them. Each case can be evaluated on its merits.
So these, quickly and probably too superficially, are my replies to your questions. And again, very good questions they are!
by Chris Matthew Sciabarra on May 14, 2005 at 1:16 PM