GETTING OVER THE ADVANTAGE LINE
The Purpose of the Program
The idea is to take up some of the themes of the actual conference, provide some additional readings, and also to cover some other topics with on-line material to demonstrate the range, depth and the vigor of the classical liberal program.
The theme of this conference is "Getting over the advantage line", that is, to make progress by adding something extra to the great ideas of classical liberalism. Of course not everything in this program is original, far from it, one of the aims is to recycle some documents that have timeless value. This program is dedicated to the proposition that there are some good old ideas that can add weight to the liberal scrum and there are some good new ones that need to be called off the bench to have a run.
Some of these were foreshadowed at the Mont Pelerin meeting in Christchurch (1989) but have not made much headway since that time. The commentary on the papers in the Popper session suggested that his ideas on language and communication challenge some of the debilitating fashions in the theory of literature and cultural studies, so this contribution may ultimately be as valuable as his defence of critical rationalism and the liberal order in The Open Society and its Enemies. Some flesh will be added to the bones of that proposition in the session on the Cultural Agenda for Classical liberalism.
"More can be said on Popper’s theory of metaphysical research programs, and Bartley’s exciting innovations in the theory of rationality and ‘metacontexts’. Exegesis of these theories has scarcely begun and as their logical consequences are unpacked the results are likely to provide massive support to the liberal cause."
Twenty years later it is probably time to move these thoughts forward, and this occurs in some of the papers in the first session and in the session on the synergy between critical rationalism, classical liberalism and Austrian economics.
First up, instead of registration, some historical material for background and perspective. Perhaps something from Jacques Barzun on the way we have come from Dawn to Decadence over the last 500 years.
For a more academic introduction to Australia, some of the intellectual currents in Australia during the 20th century, and the ferment of ideas at the turn of the 20th century. It is strange that the dominant ideas were socialist or collectivist despite the fact that Australia had only recently yielded first place to the US as the most rich and egalitarian nation in the world. Something on the near death of liberalism in the so-called Liberal Party in Australia, demonstrated by the resort to conscription for Vietnam which planted the seeds of electoral disaster for the conservative parties in the 1980s and 1990s.
Plenary session 1.
Speakers at MPS talked about the French Enlightenment and the Scottish Enlightenment.
Abstract. Classical liberalism is a non-authoritarian creed. It draws its strength from the non-coercive power of reasoned argument, in contrast with systems that depend on brute force or on intimidation by intellectual or moral authorities.
The survival and progress of liberalism depends on a free market in ideas, free of the cramps on trade (in criticism) that are imposed by cartels, monopolies and various forms of protectionism in the mind industry.
This paper suggests that true lovers of freedom have always been forced to work against the authoritarian grain of Western thought. This is because the dominant intellectual traditions, rationalist and irrationalist alike, are based on “true belief” or “justified true belief” theories of knowledge and rationality. Not surprisingly, these ‘”true belief” theories sponsor True Believers who propagate dogmatism and intolerance in science, in politics, in religion, in literature and the arts.
The paper sketches a non-authoritarian, “critical preference” approach as an alternative to “true belief”. This calls for the reformulation of some leading questions in epistemology and in politics.
Given the historical preponderance of authoritarian theories of knowledge, the traditions of critical thinking, tolerance and limited government are truly remarkable developments. They are also highly fragile which accounts for their tendency to break down during times of emergency such as war. This situation should improve with wider understanding of the “critical preference” approach.
This proposition is illustrated with a number of case studies. The first is the apparent contradiction in the views of Popper and Hayek on rationality. The second is the resolution of some tension between the “Humean” and “Kantian” elements that Kukathas identified in his study of Hayek,. The third is Jan Lester’s Escape to Leviathan and the fourth is a rejoinder to the deconstructionists in the theory of literature.
Abstract. This paper argues that the best way to develop the economics of von Mises is along the lines of “fallible apriorism” rather than the strong program of apriorism advocated by Rothbard and his followers. This position is supported by Popper’s epistemology which can be described as “conjectural apriorism”. The outcome of the Popper/Smith program is a form of methodological monism that supports the main lines of the causal realist program initiated by Carl Menger.
This means that people doing good economics can simply claim that the best argument for a theory is its capacity to provide explanations and understanding of economic phenomena, and to stand up to various forms of criticism. Austrians do not need to insist that the validity of their economics depends on a special method which is different from the methods of the natural sciences. And it can be argued that those economists who are trying to emulate the methods of positivism and empiricism are on the wrong track, but not for the reasons claimed by the Austrians who advocate strong apriorism.
3. Third paper. A Window of Opportunity that was Missed.
A paper on the failure of convergence of three lines of thought in the 1930s (Talcott Parsons, Ludwig von Mises and Karl Popper) that could have driven a multidisciplinary program in economics and the other social sciences. This program would have sponsored testable and policy-oriented work as an alternative to the institution-free and untestable mathematical exercises which engaged a high proportion of the resources in the economics profession after WW2.
Session 2. Human Nature, after Freud and the Behaviourists.
Denis Dutton: Building Political Structures with the Crooked Timber of Humanity
Peter Whybrow: After Freud: What do Neuroscience Advances Tell Us About Human Nature?
The alternative program.
The Buhlers represented the “third school” of Viennese psychology, the others being the schools of Freud and Adler. Buhler described the evolution of language from the expressive to the signaling and then the descriptive level, to which Popper added the argumentative function. The Buhlers emphasised the purposeful and cognitive aspects of human nature and Charlotte was especially interested in life plans. She moved on to become a pillar of the Humanistic Psychology movement in the US.
Suttie died in 1935 and did not live to defend his radical modification of Freud’s theories. His ideas had the potential to transform the psychoanalytic movement into a more scientific psychology, integrated on one side with biology and medicine, on the other with sociology and anthropology. At the same time, the philosophical underpinning does not lend itself to the anti-humanitarian and reductive "nothing but" message that has often been propagated as a corollary of Freud's theories.
Many welfare recipients realise that the system is perverse and unfair because they sense (deep down) that everyone should be prepared to put in as well as take out from the community chest. Bowles and Gintis explore the evolutionary orgins of this important sense of reciprocity and the implications for the social sciences and welfare policy.
Panel session on reconciling tradition and the modern.
At the MPS the Aboriginal leader Noel Pearson was expected to speak but could not attend. The text of many of his important and path-breaking speeches can be found here on the site of the Cape York Institute.
More local material:
The story of "equal pay" for native stockmen in the North of Australia, enforced by the central wage-fixing authority, which started the slide into welfare dependency for Aborigines. The second part of that paper incidentally described how the trade union movement was allowed to trash the rule of law in Australia during the 1960s. Mal Brough's speech on the disastrous outcome of welfare dependency in remote Aboriginal communities.
Session 3. "Libertines Discuss the Moral Order of Society".
A panel discussion involving Adam Smith, Carl Menger, Ludwig von Mises, Karl Popper, Lord Acton, Ayn Rand and Margaret Thatcher.
This was a very difficult panel to convene. Karl Popper threatened to leave if anyone smoked, von Mises was likely to walk out if anyone turned out to be a socialist, and Ayn Rand generally refuses to talk to people who are religious or do not believe in Induction.
In the event the discussion had to be cancelled. Due to an unfortunate misprint in the program only Carl Menger and Ayn Rand were prepared to participate.
Session 4. What have we learned from the GFC?
Thomas E Woods on Meltdown. A clear Austrian account of the government failures which set the scene for the global financial crisis. Jeffrey Friedman's review of the literature for Critical Review. A tour de force of the literature, written as the introduction to a special edition of the journal devoted to the crisis. Friedman identified the perverse outcomes of some regulations that were put in place due to distrust of free markets.
Session 5. A Generation of Economic Reform in Australia.
At the MPS, Wolfgang Kasper, Paul Kelly, John Howard (ed-PM).
Leo Dunbar, the forgotten man of the reform movement, on The Austrian Key, showing how the ideas of the Austrians support three prongs of the deregulation program (reducing tariffs, labour market reform and privatisation). The missing piece in the jigsaw puzzle of reform is the labour market. Some progress was achieved but this has been rolled back with major concessions to the trade unions after the election of 2007. The biggest problem is the widespread acceptance of several myths about industrial relations and the role of the trade unions.
BUS TOUR DAY
Instead of the bus trip to a sheep station the Virtual Program provides on-line orientation to Australia selected aspects of Australian culture. People who missed it the first time should see the the film Wake in Fright to give a more down to earth perspective on the nation west of the Dividing Range.
For a broader view of Australian culture
Other important poems by “Banjo” Patterson
The Great Australian Adjective. A poem.
Chopping. Overseas folk need to know that our axemen have to cut hard wood, unlike the softer pine wood used in contests overseas.
The most spectacular wood chopping event is the “tree felling” where the axeman go up a few metres on boards inserted in notches cut into the trunk of the tree.
This is a handicap event where the best choppers give the others a start, based on past performance. The backmarker in this event started almost two minutes before the front marker. It looks as though the back marker had a bad log because he seemed to get into trouble near the end of the second side of the cut.
Session 6, new threats to liberty and the private sphere.
At the MPS
Sinclair Davidson: Tax Harmonisation: A Threat to Liberty
John Kampfner: Surveillance State
The Dangers of Democracy: Defusing the Dreaded Demographic Transition.
There used to be a fear that Roman Catholics would out-breed the WASPS, get to 51% of the population and assume control of the western democracies. This turned out to be a false alarm because the RCs took up birth control and agnosticism and for the most part became regular people like everyone else without any distinctive political agenda. Will the same thing happen with the followers of Islam?
To get a grip on this problem it is important to appreciate that there are two very different theories (or proposals) for democratic government. One is a theory of sovereignty, that is, it purports to answer the question “who should rule”. And so democracy is the rule of the majority. This is a very dangerous theory because it can lead to a form of tyranny just as much as any other theory of unchecked rule.
An alternative theory of democracy (call it what you will) is not an attempt to answer that question, but another, put by liberals such as Hume, von Humboldt and Popper. It is not about sovereignty, it is more about empowering the people to have the maximum amount of control over their own lives. It is about keeping our rulers under control, to minimise the amount of damage that bad rulers can inflict, even while we do out best to appoint good ones. Call it “limited government”, limited by constitutional rules, by conventions, by the vigilance of the people.
The question is, can we achieve limited democracy under the rule of law before welfare dependents, “winner take all” left liberals, big government conservatives and radical dissidents combine in various ways to destroy the liberal order? Time will tell. In the meantime we will give ourselves the best chance if we understand the difference between the two theories of democracy, and the pitfalls of all theories of sovereignty.
Plenary session 7, New Developments in Economics.
The Mont Pelerin Society Conference program had papers on happiness in society by Jason Potts, the economist as guru by Geoffrey Brennan and behavioural economics, law, liberty and the quest for the Third Way by Judge Douglas Ginsburg.
The Virtual Program.
1. Peter Boettke (1997) on the wrong turn taken to formalism. This is a lengthy and detailed argument along the lines that the postwar turn to mathematical formalism, especially as practiced by the strong supporters of markets at Chicago, produced two perverse effects. One was exaggerated expectations of markets (the Chicago error) and the other (in reaction) was the exaggerated response to imperfections in markets (the anti-market, regulation error). 2. Peter Klein on "The Mundane Economics of the Austrian School". The core theoretical doctrines of the Austrian school are the basic problems of price theory, capital theory, monetary theory, business-cycle theory, and the theory of interventionism, the problems that are central to any approach within good economics.
a) Averted the parting of the ways between economics and the other social sciences;
b) Offered an alternative program to mathematical formalism in economics, focusssed on institutions and traditions;
c) Offered an alternative to both "grand theory" and "crude empiricism" in the social sciences:
d) Sponsored multi-disciplinary policy work that could feed into practical problems and evaluate the outcome of social reforms.
The opportunity was lost then but the ground can be made up now. For more along these lines See Session X “The synergy of Popper and the Austrians”.
3. The rise of mathematics in economics. Reading notes on Israel and Ingrao.
4. The problems and prospects of game theory.
Did they pick the wrong games? What about ball games, where investigation would point to the function of (i) plans and intentions, (ii) learning and innovation, (iii) organization and leadership, and (iv) the limits and the incentives imposed and created by legal, social and cultural institutions. A nice distinction could be made between the (fixed) natural laws that set limits on human action and the man-made rules and conventions that can be changed.
Contemplate the evolution of experimental economics in the hands of Vernon Smith and his colleagues, compared with the programs driven by the mathematical whiz kids at the RAND, Cowles Commission etc described by Mirowski in Machine Dreams.
5. Proposal for the two-track economics degree.
One track with the full complement of maths, the other focussed on the economic way of thinking and situational analysis so graduates are equipped to move immediately into multi-disciplinary work with other social scientists to collect the low-hanging fruit of institutional analysis without need of mathematical ladders. Units of maths could be picked up post-grad when people find out precisely what they really need.
Session 8. Science and the future.
At the MPS, Terence Kealey on the ideology of science, Schwartz on criticism and science, Rathjen on excellence in science.
Terence Kealey wrote a truly remarkable book, a tour de force of history, political economy and statistics, The Economics of Scientific Research. Click here for a short and long summary. The book mounts an convincing case for laissez faire economic policy and the private funding of scientific investigation. He also demonstrated the importance of addressing practical problems as “a spur and a bridle” for fundamental or “basic” research.
At the Virtual Conference we will focus on some aspects of the Australian experience in rural research where we have been particularly well served, despite the state domination of the R&D effort.
1. Making Research Pay (the Australian experience) provides some clues about the personal and institutional factors (including free trade) which make for effective commercial application of research. 3. More on the guiding spirit of rural research, a profile of Keith Barley, a wonderful teacher and mentor of researchers. He is also the person who introduced me to the works of Karl Popper, so he has a lot to answer for. 4. Champion and Barley on the penetration of clay by root hairs. This meets the Kealey requirement, being supported at least in part by the Meat Industry Research Committee. Incidentally, it seems from a study of the epidemiology of Popperism in Australia that a student had a better chance of a favourable introduction to Popper if they studied Soil Science than if they studied Philosophy.
Session 9 The Path to Development
At the MPS, papers on India and China.
At the virtual conference.
Session 10 A cultural agenda for classical liberalism.
At the MPS, History, Culture and the Language of Liberty
Amity Shlaes on Calvin Coolidge: The Last Liberal US President
Ayaan Hirsi Ali on radical Islam.
James Allan: The Language of Liberty
Ken Minogue: Individualism and its Contemporary Fate
At the virtual conference.
Some preliminary thoughts.
1. Classical liberalism involves a lot more than just econonomic rationalism. Many social democrats are prepared to promote some good economic policies to increase economic efficiency to generate more revenue to spend on the welfare state, like the Scandanavians.
2. Classical liberals need to insist that we care about the poor and the weak as much as anyone else, and we claim to have better policies to help them (especially by ensuring that no able-bodied person is ever priced out of work into welfare dependency by the wage rates that are enforced by trade unions or state tribunals).
3. We could win all the arguments in philosophy and political economy and still lose the war, both in the intellectual and the political arena due to the intellectual support for the left in other disciplines (history, sociology, literature etc) and the way that their ideas are spread through the school education system, the media (especially the public broadcaster of course), the trade unions, and the overwhelming majority of film-makers, novelists, playwriters, poets, cartoonists and comedians. Of course that is the result of what was called "the long march of the left" through the organs and institutions of civil society (politicising them as they went).
The Austrian detour into cultural theory.
Led by the late Don Lavoie, a group of Austrians embarked on a project of cultural studies and hermeneutics. The idea was ok but they picked the wrong people to follow on the journey, like Kuhn, Habermas, Gadamer. They survived the experience, unlike the brilliant and ambitious Jeffrey C Alexander who started with Talcott Parsons and ended up with the "strong cultural program' incorporating every school of thought in the human sciences with the exceptions of Austrian economics and critical rationalism.
More helpful people.
The more helpful people who I have in mind have done brilliant work in history and cultural studies, psychology, literature and literary criticism. But before looking at the scholars, a word on the writers of the primary works. Bernard Levin was a brilliant and prolific journalist and commentator in Britain. "His longest-standing appointment was his column for The Times from 1971 to 1997. This became a platform for his passionate liberal views and his scorn for authoritarianism of both left and right."
He studied at the LSE and was impressed by the liberal views of Hayek and Popper, although he said he was already thinking that way as a result of his immersion in the novels and other great works of English literature. I don't know if he expanded on that comment but the point is that he found in English novels that mix of respect for the individual (the core of liberalism) and also methodological individualism and subjectivism (seeing from the individual point of view) and also an investigation of sound and reasonable moral principles (and the results of the opposite) sensitively and brilliantly explored by the likes of Jane Austen.
David Gordon wrote "What Has Austrian Economics to do With Literature" making some good points along the lines I am following, with the bonus that Shelley, who is one of my favorite poets, comes out on our side on economics.
Getting back to the scholars.
For my money, the people who Lavoie and his students should have turned to include R G Collingwood, Yvor Winters, Jacques Barzun, James McAuley (not in the same class, but Australian), Ernest Gellner, Karl and Charlotte Buhler, Liam Hudson, Rene Wellek, Ian D Suttie, Frank Kermode.
The common feature of all these folk, apart from the relevance of many of the substantive problems that they addressed, is that they all work in the kind of metaphysical framework that Barry Smith found in Menger's economics, and Popper reworked in his debate with the physicists. They are metaphysical fellow travellers with the critical rationalists and the Austrians (on a good day, when they are not being justificationsts).
More work is required to bring out that aspect of their work more clearly, in the meantime some of the main lines of the work of some of these scholars can be found in the Revivalist Series.
Session 11 The Synergy of Popper and the other Austrians
The uneasy relationship [link] between Popper and von Mises has persisted with many of their followers. Many Popperians are social democrats and on the other side many hard-core followers of Mises regard Popper as a thoroughly bad influence, both in his political philosophy and his philosophy of science. There are exceptions to that pattern such as the late Bill Bartley and Gerard Radnitzky and contemporaries such as Jack Birner, Larry Boland, Bruce Caldwell and Peter Klein.
Popper and Hayek were friends but Hayek did not manage to explain that Popper was wrong to think that the problems of mass unemployment and monopolies might be ameliorated by more state intervention.
Popper’s Support for Classical Liberalism (limited government under the rule of law)
This can be found in his statement of liberal principles in a speech to the Mont Pelerin Society, in the chapters on leadership, and justice in The Open Society and its Enemies and in his defence of piecemeal social engineering. One of Popper’s signature ideas is “piecemeal social engineering” and it is typical of the dysfuntional relationship between these two titans that von Mises attacked “social engineering” in scathing terms without noting that Popper’s proposal was identical to his own daily practice when he was advising the Austrian Government during the 1920s.
Popper supports the other Austrians.
1. Fallible for conjectural apriorism This has the potential to focus the energies of Austrians on economics rather than philosophy and also to mount a challenge to other economists to bring their methods into line with the real methods of the natural sciences instead of the distorted version put about by the positivists and logical empiricists.
2. Support for the Weber/Austrian approach - the action framework (Parsons), situational analysis (Popper), praxeology (von Mises) with methodological individualism, subjectivism etc.
Boettke et al have signaled that economics is finding its way back to the big picture approach of Adam Smith and the political economists and moral philosophers who paid some attention to institutions and cognate influences. How did economics lose its way? Popper pointed towards situational and institutional analysis (though he was over-impressed with mathematical economics when he encountered the leading lights in Karl Menger’s symposium). The institutional focus is explicit in the concluding sections 31 and 32 of The Poverty of Historicism and it is unhelpful that philosophers of economics have written so much criticism of Popper’s “falsificationism”, without coming to grips with the book where he specifically addressed the social sciences.
The suggestion of the institutional turn in Poverty are very compacted, so sections 19, 20 and 20 should be read, followed by 30 and 31. Lately Ian Jarvie has traced the social/institutional turn in Popper’s thought from the very first published works, and this calls for a complete re-reading of Popper, to take account of the various ”turns” that he initiated.
3. The theory of metaphysical research programs (MRPs) and some of the metaphysical theories which underpin Austrian economics. That paper “Austrian Economics as a Popperian MRP” makes three points.
First, the theory of MRPs shows that the Austrian program cannot be dismissed as “unscientific” quite as easily as many critics suppose. The theory of MRPs legitimates the use of untestable principles to provide the framework for a research program. The basic principles of Austrian economics can be regarded as working assumptions, either methodological or metaphysical postulates, of the kind that occur in all sciences. These need to stand up to criticism but they do not have to be testable or falsifiable.
Second, the paper notes that the method of situational analysis and the rationality principle which Popper advocated for the explanation of events in the social sciences is practically identical to the Austrian approach which is labeled “praxeololgy” (the logic of action). This point is made in the Convergence paper.
Third, Popper championed some particular metaphysical assumptions that provide a congenial framework for the Austrian approach. In other words, Popper and the Austrians are metaphysical fellow travelers. That can be demonstrated by spelling out the agreement between Popper’s program and the Aristotelian metaphysics which Barry Smith found in Menger’s economics.
Session 12 Hypothetical Seminar on Popper’s contribution to the social sciences.
1. A paper to provide a straight feed on Popper’s epistemology and methodology, with a connection to economics. Maybe this paper by Larry Boland.
2. A paper from Malachi Hacohen on the development of Popper’s ideas as he made the move from the philosophy of physics to write The Poverty of Historicism and The Open Society. This would mention the Popper’s contact with Wald, von Neumann and Morgenthau in Karl Menger’s symposium and the influence of the young economist Colin Simkin in NZ.
3. The promising convergence of Parsons, Mises and Popper in the 1930s, a potential meeting of minds that never happened.
5. A case study, Stanley Wong’s use of the Popperian bag of tricks to demolish Samuelson’s theory of demand.
6. A critique of Popper’s critique of Marxist economics. Hans Hermann-Hoppe?
7. A recapitulation of the arguments that Popper used to shaft central economic planning, Robinson Crusoe science and the strong program in the sociology of science in chapter 23 of The Open Society.
8. A paper by Bruce Caldwell on methodological pluralism, Bruce would explain how Popper has provided a theory of pluralistic criticism: that is five forms of criticism, but unfortunately Popper’s marketing division did not hit on the idea of bundling his ideas in that way.
11. Something about the abortive confrontation with Adorno et al in the so-called Positivism Debate. Link to Popper’s side of the story. 12. A historical/social account of the way that a sawn-off version of Popperism called “falsificationism” became the received verison of his thinking, especially through the influence of Lakatos, Latsis and Blaug. An example of the resulting confusion is provided by Dan Hausman.
Session 13 The need for a long march through the Philosophy schools.
Toby Huff’s book Max Weber and the Methodology of the Social Sciences (Transaction Books, 1984) contains a section on Weber and Positivism which indicates that Weber was well read in the philosophy of science of the time and that the position of Rickert (not to mention Charles Sanders Peirce on a different continent) bears favourable comparison with work Karl Popper. This suggests that the logical positivists who came afterwards took the subject backwards rather than forwards. This is a strange situation (if true) and there have been many unfortunate consequences, especially for the human sciences in general and economics in particular.
Thanks to the flight from Hitler, the Viennese diaspora established positivism and logical empiricism as the dominant orthodoxy in the North American philosophy of science. This has produced a climate of thought which supports “scientism” in the human sciences. Consequently schools of thought such as the Austrian economists which are out of step with “scientism” and logical empiricism will not thrive until the teaching of philosophy, or at least epistemology and the philosophy of science, is brought up to date. Hence the need for a “long march”.
It can be argued that person in the Third Millennium cannot be considered to be well educated without a basic idea of the work of von Mises, Hayek and Popper, on a par with the understanding that we expect people to have of Darwinian evolution and post-Copernican cosmology.
This section contains some resources to indicate the extent of the problem, and some hints of the way that Critical Rationalism and the ideas of Karl Popper can help. A basic assumption is that the work of Popper and Smith has “cleared the deck” of philosophical impediments to good economics, so mundane economists can get on with their knitting without being distracted by the exponents of scientism or the “strong apriorism” which some regard as a valuable legacy of von Mises. Link to defence of fallible apriorism
A simple exposition of Popper’s evolutionary epistemology and a brief rejoinder to the challenges from Kuhn, Lakatos and Feyeranend. Critical review of a good book which may have done more than any other single work to label Popper as the “falsificationist”.
Session 14 The Teaching of History and Economics
Problems with textbooks.