In one recent essay in a series on the origins of modern liberalism, The Exiles Fight Back, the Economist describes the reaction of three Viennese intellectuals in responding to the tyranny and terror that both centralized power, e.g., fascism, and collectivism, e.g., socialism, lead to in the years leading up to and after World War 2. The three, Frederich Hayek, Joseph Schumpeter and Karl Popper, were reacting to extremist political ideologies and, in their own ways, criticizing the dangers of centralized power: “Each was troubled by the Anglo-Saxon countries’ complacency that totalitarianism could never happen to them. Yet warning signs abounded. The Depression in the 1930s had made government intervention seem desirable to most economists. Now the Soviet Union was a wartime ally, and criticism of its terror-based regime was frowned upon. Perhaps most worryingly, in Britain and America war had brought centralised authority and a single collective purpose: victory. Who could be sure that this command-and-control machine would be switched off?”
According to the Economist essay, the three men did not cooperate, but instead a division of thinking arose spontaneously: “Popper sought to blow up the intellectual foundations of totalitarianism and explain how to think freely. Hayek set out to demonstrate that, to be safe, economic and political power must be diffuse. Schumpeter provided a new metaphor for describing the energy of a market economy: creative destruction.”
Popper’s war effort: Popper's 1945 book, The Open Society and Its Enemies, begins with an attack on historicism, which the Economist describes as “grand theories dressed up as laws of history, which make sweeping prophecies about the world and sideline individual volition.” That may be a definition that at least some people would dispute.
The Economist comments on Popper’s thinking: “Hegel’s metaphysics and his insistence that the state has its own spirit are dismissed as ‘mystifying cant’. Popper gives a sympathetic hearing to Marx’s critique of capitalism, but views his predictions as little better than a tribal religion.
In 1934 Popper had written about the scientific method, in which hypotheses are advanced and scientists seek to falsify them. Any hypothesis left standing is a kind of knowledge. This conditional, modest concept of truth recurs in ‘The Open Society’. ‘We must break with the habit of deference to great men,’ Popper argues. A healthy society means a competition for ideas, not central direction, and critical thinking that considers the facts, not who is presenting them. Contrary to Marx’s claim, democratic politics was not a pointless charade. But Popper thought that change was only possible through experimentation and piecemeal policy, not utopian dreams and large-scale schemes executed by an omniscient elite.
Taken together, in the 1940s Hayek, Popper and Schumpeter offered a muscular attack on collectivism, totalitarianism and historicism, and a restatement of the virtues of liberal democracy and markets. Capitalism is not an engine for warmongering exploitation (as Marxists believed), nor a static oligarchy, nor a high road to crisis. Accompanied by the rule of law and democracy, it is the best way for individuals to retain their liberty.
The collapse of the Soviet Union in the 1990s vindicated Popper’s searing attack on the stupidity of grand historical schemes.”
Since this is about political theory, criticisms are to be expected: “The three Austrians are vulnerable to common criticisms. The concentration of their intellectual firepower on left-wing ideologies (rather than Nazism) can seem lopsided. Schumpeter had been complacent about the rise of Nazism; but for Popper and Hayek, the devastation unleashed by fascism was self-evident. Both argued that Marxism and fascism had common roots: the belief in a collective destiny; the conviction that the economy should be marshalled to a common goal and that a self-selected elite should give the orders.
Another criticism is that they put too little emphasis on taming the savagery of the market, particularly given the misery of unemployment in the 1930s.”
In addition to political and philosophical criticisms, advancing science arguably has brought some of the logic basis for Popper’s thinking into question. For example, one analyst argued that Popper’s thinking rested on assumptions such as (1) no precise predictions are possible in the social sciences, and (2) no short term predictions are possible in the social sciences. Depending on how one defines a ‘precise’ or ‘short term’ prediction in the social sciences, Popper appears to be wrong about both of those beliefs. Both kinds of predictions are have been documented.
Also different is new technology, which appears to be undermining Popper’s 1940s point of view that knowledge was contingent and dispersed: “A free, decentralised society allocated resources better than planners, who could only guess at the knowledge dispersed among millions of individuals. Today, by contrast, the most efficient system may be a centralised one. Big data could allow tech firms and governments to “see” the entire economy and co-ordinate it far more efficiently than Soviet bureaucrats ever could.
Schumpeter thought monopolies were temporary castles that were blown away by new competitors. Today’s digital elites seem entrenched. Popper and Hayek might be fighting for a decentralisation of the internet, so that individuals owned their own data and identities. Unless power is dispersed, they would have pointed out, it is always dangerous.”
If digital elites are entrenched and fairly resistant to creative destruction, then it would seem that regulation is one way to deal with the danger inherent in accumulated power. Today, some see giants such as Google, Facebook, Twitter and Microsoft as being in, or having made, a transition from benign to malicious. Part of the logic is simple. There is so damn much money to be made. One problem with jumps right out: To some extent, all that damn money has bought government so intelligent regulation is off the table. The other problem, which exacerbates the first, is sweeping anti-government, pro-business political ideology that currently dominates American politics. Together, the two problems are positively toxic. An intelligent balance cannot be struck.
Popper & Pragmatism: The Economist comments: “Popper was deeply concerned about workers’ conditions; in ‘The Open Society’ he lists approvingly the labour regulations put in place since Marx wrote about children toiling in factories. He thought pragmatic policies could gradually improve the lot of all.” That accords with Popper’s belief in experimentation and piecemeal policy.[1] That mindset is also compatible with the brand of politics advocated here, a pragmatic, biology-based, anti-bias ideology.
Footnote:
1. In his 1998 book (pages 394-395), The User Illusion, Tor Norretrander argues that information theory (the complexity of social forces) shows that free markets are a more efficient way forward to social progress than planned economies. The argument is that free markets are more efficient at allowing successes to succeed and failures to fail: “The collapse of communism is a manifestation of the low bandwidth of the social domain, the low capacity of language compared to the actual wealth of information in our needs. Feedback from society to planners cannot take place efficiently enough over the conscious linguistic bandwidth. Supply and demand are better at returning this information. This is ironic, for the whole idea of socialism is that barter and the market economy discard too much information.”
Norretranders may or may not be right about what the ‘whole idea of socialism’ is. Nonetheless, his point about information content in social reactions to offers of various goods and service in the economy compared to what elites and central planners would provide seems self-evident on the basis of unbiased common sense (logic). That argument seems about as powerful as any that a planned economy will not be as efficient in the long run as a free market economy. As always, the trick is for free market economies is how to regulate to balance unfettered capitalism’s tendency toward corruption, brutality and misery without crippling it. Unfortunately, balancing is not generally compatible with political, economic, religious or philosophical ideologies that do not look to trial and error pragmatism as a core value.
B&B orig: 8/31/18
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