Wednesday, August 3, 2016

Adam Gurri's Defense Of Liberty

Adam Gurri's reply to my comment on his blog entry... Evaluating the Creative Powers of a Free Civilization

Here’s the defense of liberty I believe in:

Freedom to make your own choices and your own mistakes is a central part of a good, human life. Work, tinkering, starting a business, trading—these are all part of what make up a good life as well, and what’s more, they’re a means by which we discover new goods and practices that can add to the good life.

Here’s how I read Hayek and Buchanan:

We should have freedom and property rights because they’ve had good consequences in the past. We should use our judgment to decide if specific activities are right or wrong because cultural evolution will work that out.

I think that’s bogus. For one thing, our judgments are *part* of how cultural evolution happens. For another, the fact that some practice has stuck around does not make it good. Child pornography and child prostitution have stuck around; that does not make them good, and gaining social acceptance wouldn’t make them good, either. - Adam Gurri

James Buchanan's "Order Defined in the Process of its Emergence" and Friedrich Hayek's "The Case For Freedom" both have one very important word in common... "omniscient"...

I wonder how much progress could be made in political economy if the best and the brightest among economists, such as Raj Chetty, would take seriously the admonition of Hayek, Buchanan, and Elinor Ostrom that the assumptions of omniscience and benevolence must be rejected if we are going to make progress and develop a robust theory of political economy. - Peter Boettke, AEA Richard T. Ely Lecture --- Raj Chetty, "Behavioral Economics and Public Policy"  

Might as well share a relevant paragraph from Ostrom...

PPB analysis rests upon much the same theoretical grounds as the traditional theory of public administration. The PPB analyst is essentially taking the methodological perspective of an "omniscient observer" or a "benevolent despot." Assuming that he knows the "will of the state," the PPB analyst selects a program for the efficient utilization of resources (i.e., men and material) in the accomplishment of those purposes. As Senator McClelland has correctly perceived, the assumption of omniscience may not hold; and, as a consequence, PPB analysis may involve radical errors and generate gross inefficiencies. - Vincent Ostrom and Elinor Ostrom, Public Choice: A Different Approach to the Study of Public Administration

Let's take another look at part of what you wrote...

Here’s how I read Hayek and Buchanan:

We should have freedom and property rights because they’ve had good consequences in the past. We should use our judgment to decide if specific activities are right or wrong because cultural evolution will work that out.

I think that’s bogus. For one thing, our judgments are *part* of how cultural evolution happens. For another, the fact that some practice has stuck around does not make it good. Child pornography and child prostitution have stuck around; that does not make them good, and gaining social acceptance wouldn’t make them good, either. - Adam Gurri

The assumption of omniscience means that government planners already know our judgements.  But if you agree with Hayek, Buchanan, and Ostrom... then you'll agree that the assumption of omniscience is the epitome of bogus.  And if you agree that the assumption of omniscience is the epitome of bogus... then you'll understand that our judgements are unknown.  If you understand that our judgements are unknown... then you'll understand that the outcomes of cultural evolution really do not reflect our judgements.

Of course our judgements aren't entirely unknown.  We don't live in a command economy... we live in a mixed economy.  This means that our judgements of private goods are known and our judgements of public goods are largely unknown.  As a result, knowledge of judgements is lopsided.  Because knowledge of judgements is lopsided... cultural evolution is lopsided as well.  We make far more progress with private goods than we make with public goods.

Progress is a function of difference...





Individuals differ, one from another, in important and meaningful respects. They differ in physical strength, in courage, in imagination, in artistic skills and appreciation, in basic intelligence, in preferences,  in attitudes toward others, in personal life-styles, in ability to deal socially with others, in Weltanschauung, in power to control others, and in command over nonhuman resources. No one can deny the elementary validity of this statement, which is of course amply supported by empirical evidence. We live in a society of individuals, not a society of equals. We can make little or no progress in analyzing the former as if it were the latter. - James Buchanan, The Limits of Liberty

All this difference is the source of progress.  Progress is a function of difference.  So anything that hinders or limits or diminishes difference will hinder progress.

For a while now it's been pretty popular to promote diversity.  Unfortunately, it's merely lip service.  It's an extremely superficial appreciation of diversity.  A substantial and deep appreciation of diversity fundamentally respects and recognizes the value of people's freedom to choose different paths.  Diversity allows humanity to hedge its bets.  And hedging bets is just as important for public goods as it is for private goods.

We can hedge our bets with public goods simply by creating a market in the public sector.  Taxpayers would be given the option/opportunity to directly allocate their taxes.  Because humans are diverse, the demand for public goods would reflect this diversity.  And, in a relatively short amount of time, the diversity of public goods would come to reflect the diversity of the demand for public goods.   Our judgements of public goods would be known just like our judgements of private goods are known.   Knowledge of judgements would no longer be lopsided.  Cultural evolution would no longer be lopsided.  We would make just as much progress with public goods as we make with private goods.

To be sure... it's a given that my pragmatarian bias has influenced my reading of Hayek, Buchanan and Ostrom.  That being said, Boettke isn't a pragmatarian and he clearly has the same interpretation regarding their position on the assumption of omniscience.  Hayek wasn't a pragmatarian either.  I'm going to say that Buchanan and Ostrom were pretty much pragmatarians.  Or, early pragmatarians... proto-pragmatarians.

Because most public goods and services are financed through a process of taxation involving no choice, optimal levels of expenditure are difficult to establish. The provision of public goods can be easily over-financed or under-financed. Public officials and professionals may have higher preferences for some public goods than the citizens they serve. Thus they may allocate more tax monies to these services than the citizens being served would allocate if they had an effective voice in the process. Under-financing can occur where many of the beneficiaries of a public good are not included in the collective consumption units financing the good. Thus they do not help to finance the provision of that good even though they would be willing to help pay their fair share. - Vincent Ostrom and Elinor Ostrom, Public Goods and Public Choices

Under most real-world taxing institutions, the tax price per unit at which collective goods are made available to the individual will depend, at least to some degree, on his own behavior. This element is not, however, important under the major tax institutions such as the personal income tax, the general sales tax, or the real property tax. With such structures, the individual may, by changing his private behavior, modify the tax base (and thus the tax price per unit of collective goods he utilizes), but he need not have any incentive to conceal his "true" preferences for public goods. - James M. Buchanan, The Economics of Earmarked Taxes

In any case, I'm fairly confident that if you read Hayek, Buchanan and Ostrom correctly, you'll be able to effectively view cultural evolution through the lens of society's judgements of public goods being assumed, rather than actually known.  And if you really appreciate the relationship between difference/diversity and discovery/progress... then you should really appreciate the importance of actually knowing, rather than simply assuming, society's judgements of public goods.

No comments:

Post a Comment