the Rathouse
Science As A Particular Mode
Of Thinking And The Taming
Of The State
An Essay by Gerard Radnitzky
This paper by Gerard Radnitzky  was published in a collection of papers titled Freedom and Rationality: Essays in Honour of John Watkins, edited by Fred D’Agostino and Ian Jarvie, published by Kluwer Academic Press in 1989.

The bottom line of this long and challenging paper is that the secret of the 'European Miracle' has been the evolution of limited government. There is no trade-off between freedom on the one hand and economic success and scientific progress on the other hand. The two are inseparable because economic growth has come from economic freedom and competition, and scientific progress has come from a free market of  ideas.

The phenomenon of the 'Rise of the West' has been made possible by the evolution of freedom in the economic sphere from political and religious  influences, and by other developments leading to the security of property rights. It is an open question whether the relatively free society which grew out of the 'European Miracle', will be a unique, fragile and transient exception in human history or an enduring achievement.

It should be noted that the European Community is in the process of dismantling the 'European Miracle' or at least placing it under severe strain. A similar process has bipartisan support in the US.
                                                                Rafe Champion
Gerard Radnitzky
John W.N. Watkins explored the relationship between epistemological doctrines and political ideas in an early seminal paper ‘Epistemology and Politics’ (1987, originally published in 1957). He defended the thesis that philosophical ideas about the genesis of factual knowledge do have political implications. In various writings he has investigated the problem of the rational preference between competing scientific theories. In a recent paper he contrasts the optimism of many philosophers “in the ‘glad confident morning’ of modern science, in the early seventeenth century, when it had made only rather small beginnings, with today’s widespread philosophical disillusion and skepticism concerning the cognitive status of science, despite the enormous strides it has taken since those early days.”

In this essay I wish to pursue the question of what is the cachet of ‘scientific thinking’ as compared to other modes of theory formation and ways of handling theories. I will ask also why modern science has developed in Europe, and only there, and submit the thesis that the rise of modern science has been made possible by particular institutional arrangements that developed in Europe, and only there. These institutional arrangements achieved the taming of political power, and that ‘taming of the State’ is a pre-democratic achievement.


The intellectual climate of the civilized world is shaped by science in the sense that scientific knowledge is the most respected sort of knowledge. It is respected because it is objective in the sense of being intersubjectively testable so that the scientific merit of a theory can be appraised without taking into account how the theory was generated and what effects it may have on those who believe it, work with it etc. For the broad mass of the populace the prestige of science is due to the efficacy of the technology based on science. Their lives have been changed by that technology, a development that has accelerated during the last six decades. For the thinking sections of the population the prestige of science resides also in the way it is progressing.

The world picture of the educated public has been shaped by the various scientific discoveries. We speak of a ‘scientific world-picture’. However, if taken literally, this expression would be a contradicio in adjecto. Creating a world-picture is not the task of science. A world-picture is created by philosophical cosmology and philosophical anthropology. They attempt to gather the relevant contributions of the various scientific disciplines and to mould them into a more or less unified picture.2 In recent years, cosmology in combination with quantum theory and synergetics have strongly influenced our world picture while evolutionary biology and genetics have helped us to improve our image of man.

To understand the current situation of science it is necessary to know something about how this situation came about. The development of science forms part of a larger development: the ‘European Miracle’ and later the ‘Rise of the West’. That phenomenon in turn constitutes a special case of a much broader development of cultural evolution. Before having a look at cultural evolution let us glance at the development of man’s cognitive capacities.


Man’s biological and intellectual make-up, which enables him to cope with the physical environment, is the result of biological and cultural evolution combined. Biology can show us the development of life from the level of bacteria about four billion years ago, for instance, the development of animal vision starting from the humble beginnings of photocontrolled movement of organisms that just had invented photosynthesis as a source of energy supply (Wächtershäuser 1987, ‘Light and Life...’). According to Popper’s “active Darwinism” organisms shape their senses in the course of their foraging activity (cf., e.g., Popper 1987, ‘Natural selection...’; Bardey 1987, ‘Philosophy of biology...’; Radnitzky 1987, ‘Erkenntnistheoretische Probleme...’). In short it can teach us about the evolution of cognitive sensory apparatuses of various species (Radnitzky and Bartley, eds., 1987, Evolutionary Epistemology...). Man’s cognitive sensory apparatus, sense organs and brain, are the result of a long evolution and are adapted to what has been called the ‘mesocosmos’, the world of medium dimensions with respect to the size of objects, to distances, velocities, etc. (cf., e.g., Vollmer 1987, ‘Unity of science...’).

It is suggestive to conceive the cognitive sensory apparatus in analogy with a computer as consisting of both hardware — the biological structures — and system software: the assumptions, expectations, hypotheses, theories, independently of whether they exist in the form of tacit knowledge or in the form of linguistically formulated hypotheses Even in the simplest act of observing of perceiving something as something we transcend immediate experience by making hypotheses about what the thing perceived might be. We make these hypotheses on the basis of previous experience and in any act of perceiving we at the same time also test these hypotheses. These hypotheses are structured by certain subconsciously held assumptions, expectations, or formulated theories — I use the term ‘theory’ here in the wide sense — that are ontogenetically a priori. (This, of course, does not imply anything about their validity; being genetically a priori does not entail being a priori valid.) They are the phylogenetic inheritance gained in the evolution of the species. I propose to subsume them under the umbrella expression of primary theories I follow here the anthropologist Robin Horton (1982).

Brain and mind have developed in a give and take relationship i e what we have called the hardware of the cognitive sensory apparatus and its system software, the primary theories, have developed in such an interplay (e.g., Sir John Eccles’s work) Man has developed his brain by his dealing with the products of his mental activity, with the expectations, hypotheses, theories — by forming them and by testing them, and sometimes by replacing less good theories by better ones, i.e. by theories that provide a better ‘fit’ to the relevant aspects of reality (see also Jarvie 1972, Chapter 6). Examples of such theories are the Euclidean perception of space,3 the one-dimensional concept of time, the tendency to interpret a sequence of events as causally connected, the push-and-pull conception of causality, and so forth. The usefulness of the sharp distinction between space and time, which is due to the properties of our sensory cognitive apparatus, illustrates how well that apparatus is adapted to life in the mesocosmos — the separation is useful because in daily life we deal only with velocities that are very small compared to the velocity of light (cf., e.g., Kanitscheider 1988, Welibild.pp. 84, 189). These synthetic a priori (ontogenetically a priori) theories constitute the system software of man’s cognitive sensory apparatus. Hence, the primary theories are common to all cultures, are human universals. They guide man’s dealings with the physical environment and hence have survival value.


Man belongs to those species that could survive only by forming groups. Man has lived in small face-to-face groups of gatherers, and later mainly as hunters, for about one to two million years. Because of the continuity between life in the primordial human horde and the chimpanzee horde, statements about when the transition occurred remain somewhat arbitrary and may well involve even a longer period (cf., e.g., Radnitzky 1987, ‘Rise of Civilization...’, 55, 62; Waal 1982, Chimpanzee Politics). The face-to-face groups were made possible by the evolution of a rule system that governed the behavior of the group members so that reliable expectations of reactions could be formed. I propose to call that rule system the ‘solidarity norm system’ (cf., e.g., Radnitzky 1987, ‘Rise of Civilization...’, 65). It has evolved in, and has made possible, life in small groups where people can touch each other and be touched by their fellows, and where the group has a common aim. The ‘solidarity norm system’, adapted to life in the face-to-face group, is in important respects the counterpart in social life to the primary theories, (which, it will be remembered, are adapted to life in the mesocosmos and are relevant for survival). Indeed, in social life the counterpart to the mesocosmos is the face-to-face group. The solidarity norm system is deeply engrained in our emotional life. Mankind has lived in small face-to-face groups for about one to two million years, and to some extent the solidarity norm system is the endowment from our non-human primate ancestors —which extends the relevant period to about four million years (Waal 1982, Chimpanzee Politics; Radnitzky 1987, ‘Rise of Civilization...’, p. 55). During that period, because of the primitive state of technology, the planet’s carrying capacity has been only between one to ten million people, and the total population of the planet as well as the medium group size remained fairly constant.

With increasing trade relations and the emergence of agriculture — a very late development, only about ten thousand years ago — the planet could sustain larger and larger populations, and the form of life changed from the small group to the large, anonymous society. Clans and larger tribes appeared and eventually nations and high cultures like China, India, and the Islamic empires. The anonymous society is characterized by the fact that now people serve the needs of others whom they don’t know and profit from the efforts of others who do not know about them. They and likewise these others intend to improve their own lot and by doing so they simultaneously serve the welfare of the society, without intending to do so. A familiar quotation from Adam Smith epitomizes the situation best: “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interests.” Friedrich von Hayek introduced the term ‘catallaxy’ for that phenomenon; in certain contexts it means not only trading, but turning a foreigner into a friend, accepting him as someone with whom you peacefully do business. A central feature concerns the intra-group relationship: the primordial face-to-face group needs a common aim, but in the anonymous society, in order peacefully to cooperate, people no longer need any common aim — apart from the aim to preserve the institutional framework which makes it possible for them to cooperate peacefully, and which secures their economic freedoms and civil liberties. (If these are secured, the so-called ‘political freedom’ is of little significance in the daily life of the ordinary person.)
The transition from the face-to-face group to the large anonymous society has been made possible by the evolution of a second norm system. The thesis of the emergence of two moral systems and of their existence beside each other in modern industrialized society as well as the contention that, if in the public-political arena the abstract norm system were replaced by the solidarity system, economic welfare and freedom would be destroyed, from the central part of Hayek’s theory of cultural evolution and of his social philosophy.4 The rules of that norm system are abstract in the sense that they abstract from the particular time and place and apply equally to all members of the society. I propose to call this norm system the ‘honesty system’ since ‘pacta sunt servanda’ plays a central role in it. It enables the individual to transcend the realm of personal acquaintance. For instance, personal exchange is replaced by interpersonal markets.

The ‘solidarity’ system, the moral system that successfully stabilizes the face-to-face group cannot perform that function for the anonymous society — that is the central theme in Hayek’s theory of cultural evolution. Of course, the ‘solidarity’ norm system has retained its applicability to all face-to-face groups, and, since many small groups — like the family and circles of friends — are interspersed in the anonymous society, the solidarity system applies to them, while the relatively free society, i.e., that special case of the anonymous society which is wealth-creating and which respects private rights can only be preserved if its public-political sphere is governed by the abstract ‘honesty norm system’. In this sense the ‘honesty norm system’ with its abstract rules constitutes a social capital the importance of which can scarcely be overrated.

The anonymous society governed by the norm system of abstract rules opens the possibility of a free society, i.e. a society based on the market order, where private rights are respected. Such a society can develop institutional arrangements that make possible the rise of science. However, whether or not this possibility is realized depends upon whether appropriate initial conditions occur, which in turn depends on geographical constraints and historical accidents.


The more lively man’s intellectual life became, the greater became the demand for an explanation of phenomena which cannot be explained with the help of primary theories. Such a demand is bound to arise even in daily life, since primary theories have a very limited explanatory power if only because of the limited concept of causality. In addition, perennial questions arise, like the question of the origin of the world, the origin of life, of man, or of a particular group. The demand for an explanation of phenomena of daily life not explainable in terms of primary theories and hence not controllable as well as the demand for an answer to questions that cannot be answered with the help of primary theories, can only be met by constructing a new sort of theories. Hence, the primordial group develops myths of origin and these myths guide rituals, which can be viewed as technologies designed to influence supernatural powers.5 All high cultures have developed spiritualistic-personalized theories, which attempt to transcend the experience of the mesocosmos. Again following Robin Horton, I propose to use the umbrella word ‘secondary theories’ to designate that heterogeneous set of theories. Departing from Horton, I propose to define secondary theory as the class of theories that attempt to explain phenomena which cannot be explained by theories that are tied to our sense organs, independently of whether they involve supernatural entities or are empirically testable theories. Religious doctrines form an important subset of the class of secondary theories. They not only attempt to explain things but have social functions like providing coherence and supporting an order. Secondary theories owe nothing to biological evolution but are exclusively a product of cultural evolution. Hence, they vary widely from culture to culture. Since, by contrast to primary theories, they do not have survival value, they can afford to contain, as they often do, even patently absurd assertions or to postulate bizarre entities like gods with incompatible characteristics, or develop Cargo Cults (cf., e.g., Jarvie 1964).

From a historical point of view, it is appropriate to treat secondary theories as one single ideal type, and to draw attention to an interesting special case of secondary theory: to scientific theories. In cultural history the European development constitutes the exception, and one key feature of the ‘European Miracle’ is the accelerating development of science from the beginning of the 17th century.

From the systematic point of view it is recommendable to distinguish Iwo types of secondary theories: spiritualistic-personalized theories and scientific theories, naturalistic-impersonal theories. In section (5), when institutional arrangements are considered, the historical aspect will be taken into account.

To clarify these two ideal types of secondary theories I shall compare them to each other, that means I shall first ask what they have in common and then ask in what respects they differ. By listing what the two subsets of secondary theories have in common we also sharpen the distinction between primary and secondary theories.

What do spiritualistic-metaphysical secondary theories and scientific secondary theories have in common? (1) All secondary theories, by definition, are designed with a view to meeting the same sort of demand: explaining what is unexplainable in terms of primary theories. (2) Both types attempt to meet that demand by means of a theory formation that involves unfamiliar, ‘hidden’ entities. (3) Both types of secondary theories have the same input, the same source of ideas for theory formation: experience structured by means of primary theories. The sources for analogies, for root metaphors, are but few. They will be taken from that sector of experience that is felt to show more regularity than any other realm. Thus, in stable primitive societies (like African tribes or Eskimo), where — because of the high information costs —there is almost continuous surveillance, no privacy, and behavior is strictly norm-governed, it will be the social realm that is used as a source of root metaphors. When social life becomes less stable, which in Europe is the case from the 13th century onward, the realm that provides the most reliable expectations is the arena of manual technologies, the realm of artifacts. Instead of sociomorph-anthropomorph models now lechnomorph models are the source of root metaphors. (The classic on this change is Topitsch 1958, Ursprung und Ende...; 1979, Erkenninis und Illusion; cf. also Horton 1982, ‘Tradition and modernity...’, 238 and 253.) Technomorph models also inspired the mechanistic world picture, the metaphysics underlying early science. (4) Both types of secondary theory transcend the realm of every day experience, if only because they talk about entities not directly accessible to our cognitive sensory apparatus, which is limited to experience of the mesocosmos. The spiritualistic type of secondary theory postulates supernatural entities, all sorts of gods, demons, genii loci, and sometimes develops religious doctrines as well as demonologies. The scientific theories make assertions about the cosmos and about the micro-world. In our century we have witnessed three great breakthroughs that transcend our experience of the mesocosmos and that have changed our world-picture: with respect to cosmic dimensions, the theory of relativity; with respect to the micro-world, quantum theory; and with respect to systems far from equilibrium, chaotic systems and order arising out of chaos, synergetics. (5) However, both types of secondary theories remain linked to the realm of everyday experience to which man’s cognitive sensory apparatus is adapted. They remain linked to it through the input (point (2) above), and even the spiritualistic-personalized theories, at least to some degree, submit to the test of experience, make some claim to a certain efficacy in explaining, predicting and hence also in controlling events. For instance, some of them claim that by means of certain rituals the gods may be induced to interfere in human affairs in certain predictable ways. The choice example is a rain dance. Scientific theories have, by definition, to submit to the crucial test of experience.

The question of what is the cachet of scientific thinking can be answered by investigating in what respects personalized secondary theories and scientific secondary theories differ.6 (1) Each type of theory flourishes in a different kind of intellectual climate: the spiritualistic secondary theories in a climate of cognitive traditionalism (Horton 1982, ‘Tradition and modernity...’, 238); the scientific theories in the context of criticistic thinking, in which the fallibility of human knowledge is explicitly acknowledged. Hence, each type is inspired by a different ideal of knowledge. Cognitive traditionalism upholds an end-state conception of ideal knowledge: genuine knowledge should be proven to be true. It tends to fuse and confuse truth and certainty. The epistemological climate that is propitious for science favors a process conception of knowledge: the process of research is open-ended, and scientific progress is possible in spite of the principal fallibility of all human knowledge (cf., e.g. Radnitzky 1987, Witlenstein...). (2) The ways in which the two types of secondary theories are legitimized are completely different. Typically, a spiritualistic-personalized secondary theory has recourse to an infallible source, and genuine knowledge is revealed knowledge that is handed down in accordance with the tradition. This type of legitimizing secondary theories has impregnated Western philosophy and shaped the latent epistemology that underlies ordinary language; ordinary language is impregnated with justificationist philosophy. (3) A particular way of legitimizing a theory is closely linked to a particular mode of theorizing. It is this respect that constitutes the decisive difference between the two types of secondary theories. Typically, spiritualistic secondary theories play an important role as stabilizers and legitimizers of social order, and hence the mode of theorizing is ‘consensual’ (Horton 1982 ‘Tradition and modernity...’, 239). An assertion shows its worth by being coherent with the tradition, at least with respect to principles. Hence, criticism from outside will be met by immunization strategies. The scientific enterprise is characterized by the competitive mode of theorizing (cf., e.g. Jarvie 1972, 145). Ideally, free intertheoretic competition reigns and rational theory preference primarily takes into account the differential problem-solving power of the competing theories. An assessment of this capability has to be based on the past record of the competitors in surviving falsification attempts. Prediction functions as a means of testing a theory. No attempts are made to justify a theory. A scientific theory cannot be ‘justified’. No more than a species that survived so far is thereby ‘justified’, is a scientific theory justified by its explanatory and predictive success up to date. In each case, what matters is whether or not the theory, or the species, has shown itself to be viable (Bartley 1987, ‘Philosophy of biology...’).

The prototype of scientific theory, of course, is natural-science theory. In a considerable part of social science and the humanities the commitment of the researcher to extra-cognitive values has the consequence that the theories generated often have more affinity to the spiritualistic-personalized secondary theory than to the pure type of scientific theory (Horton 1982, ‘Tradition and modernity...’, 248). If intertheoretical competition functions properly, theory change is an objective process, and hence the better theory drives out the less good one (cf., e.g., Radnitzky 1987, “Economic” approach...’). However, there is a big difference between natural science and the sciences humaines. In the latter, empirical testing is often not directly applicable — and sometimes it is even avoided. For instance, in certain historical narratives interpretation may be more important than explanation and, hence, there is a risk that moralizing will intrude. In the social sciences, peer review often functions poorly. Antony Flew (1985, Thinking About..., Chapter 1) gives some striking examples of the indifference of the scientific community to the exposure of social-scientific theories that systematically confuse description and wishful thinking.

The competitive mode of theorizing implies the requirement of intersubjective testability, which in turn entails that scientific theories have certain important limitations which spiritualistic secondary theories don’t have. They cannot guide genuine, i.e. non-instrumental value judgements or norms, and hence they alone cannot settle any moral issues, and they have nothing to say on ‘existential themes’ like the ‘meaning’ of life, of death, of happiness, and so forth.

So far as we know, the competitive mode of thinking began with the PreSocratics. There, probably for the first time, criticism was encouraged, including criticism of the secondary theories which hitherto had constituted revealed knowledge handed down from generation to generation as something sacrosanct. Referring to Hayek I mentioned that the evolution of the large, anonymous society opened up the possibility of a development towards a free society — a possibility, not more. The breakthrough of scientific thinking was achieved in Europe and it is an integral part of the ‘European Miracle’ (I borrow this term from the title of E.L. Jones’s book of 1981). The competitive mode, which is the growing ground of scientific thinking, can only thrive in a particular institutional environment. Let us ask why and how institutional arrangements that create wealth — be it economic wealth or new knowledge — evolved in Europe and only there.

So far as we know, all advanced civilizations have been despotisms, and the mass of the people have always lived in extreme poverty. A longitudinal performance comparison of economies and nations reveals that the ‘Rise of the West’ is the exception: a brilliant and perhaps fragile accident. About five hundred years ago, the high cultures of the Far East, in particular China, were superior to European civilization (cf. Needham 1969, Grand Titration, 190).~ However, Europe embarked on an unparalleled development, which accelerated for the last two hundred years, so that at the turn of the century Europe literally ruled the world. Within the long-term cultural evolution a special case had appeared.

When we wish to explain ‘1/ow (and when and why) the West grew rich’, the ‘West’ is defined as those areas where in the last two hundred years prosperity has touched the lives of more than the upper tenth of the population. (Cf., e.g., Rosenberg and Birdzell 1986, How the West...; Weede 1987, ‘Eurosclerosis...’; 1988, ‘Sonderweg...’; Engerman 1988, ‘How the West...’.) The phenomenon started in Europe and has moved westward. The itinerary is roughly this: in the 14—15th century, the North-Italian commercial cities, post-1500 Spain and Portugal, by 1600 Holland, post-1750 England, about 1900 the US, and today Japan, Hong Kong, Singapore, ROC, ROK (see, e.g., Rabushka 1987, New China...; 1988, ‘Economic, civil...’). ‘Rich’ in our explanandum is taken in the wide sense of ‘welfare’ comprising both financial and economic wealth and freedom. Disregarding the difficulty of concepts of national income accounting, it is clearly visible that the ‘Rise of the West’ brought a great advance in the welfare of human beings, as indicated by the means available to the great majority of individuals themselves to choose and shape the quality of the lives they lead (Engerman 1988, ‘How the West...’). Throughout history those economies grew fastest that were freest — and the same holds for scientific progress.

The Rise of the West rests on three pillars: in the economy, the market order; in the political sphere, the taming of the State; in intellectual life, autonomous science. (1) The market order or competitive capitalism is the key factor. It presupposes and rests on private rights, i.e., that property rights are respected by the rules at least to such an extent that their predatory appetites are kept in check. (2) The existence of private rights (Hirshleifer 1980, ‘Privacy...’) in turn entails and presupposes the existence of some sort of legal framework protecting such rights. (3) Autonomous science as a model of a particular cognitive mode — the competitive mode — achieved its breakthrough only with Galileo and Newton. (Of course it had innumerable forerunners.) That breakthrough had been made possible by the evolution of institutional arrangements that foster wealth creation. Wealth-creating institutions have certain general characteristics that are independent of whether they produce economic and financial wealth or human capital —‘human capital’ is here taken as comprising both epistemic resources, knowledge, and the producers of such epistemic resources or of economic wealth.

The link between science and economic wealth appeared only after the late 19th century. Science itself flourished .best where its autonomy and freedom was fostered by the decentralization of invention and innovation and the ability of those who succeeded to capture their rewards — in contrast with the “ignominy memorialized in the eponym ‘Lysenkoism” (Rosenberg and Birdzell 1986, How the West..., 255).

Why did suitable political conditions develop in Europe rather than a other places? Like all historical processes the ‘Rise of the West’ is a singularity and a contingent process. We can explain the principle by pointing out certain possibilities which have opened up. Which of the possible developments has been realized, depends essentially on the initial conditions; these in turn depend on the crossing points of causal chains, which contain a substantial chance clement.

In the case at hand, among the initial conditions natural constraints have played a key role. By contrast to the conditions which Asian and Islamic rulers were confronted with, European geography — soils, geology, climates, etc. — varies from place to place and core-areas are comparatively small. For European rulers it was far more difficult to project military power from the core-area to the periphery. Hence, the European states faced neighbors with roughly equal military capabilities, and the international game of power was characterized by a permanent and fierce competition (cf. Weede 1987, ‘Eurosclerosis...’; 1987, ‘Ideas...’; 1988, ‘Sonderweg...’). Competition in economic markets provided the need for an autonomy of technology and later of science. Competition among holders of political power within a nation, a phenomenon common to Europe, boosted capitalism and economic growth. Historical accidents reinforced that development one important factor was the power struggle between the State and the Church Competition between states together with practicable opportunities to exit facilitated the spread of innovations throughout Europe

Besides competition between states in the form of trade, competition in the form of power politics and wars was another factor that boosted economic development. Military technology has always been a pacemaker for civil technology (cf., e.g. Albert 1968, Kritische Vernunft..., 14; Andreski 1968, Military Organization...;’ 1969, Comparative Sociology...). The role which the competition between states in the form of war played for European development can hardly be overrated.

The rulers, ruling over a limited territory, recognized that they could get a larger income from a steady stream of protection rents than from robbing merchants. Given these constraints for European rulers it was rational to keep in check their predatory and cleptocratic appetites and to concede relatively safe property rights (Weede 1987, ‘Eurosclerosis...’, 4; 1987, ‘Ideas...’, 2). Property rights were in turn the growing ground for a moral system of individualism and personal responsibility. Conceding property rights to individuals meant limited government; the protective purpose of the state became more and more pronounced: a strong (protective) state but not indulging in a wide range of activities. Thus limited government could evolve in an age of feudalism and absolutism. Limited government is a predemocratic achievement.

In sum, sustained economic growth has been based on trading across an area large enough to be important but divided among a number of rival nation-states. Each of these states was large enough to protect property in a territory large enough to be important, but not so large as to become an empire with inefficiencies analogous to those of the monopolistic firm. The possibilities for capital mobility and the risk of losing valuable human capital operated as a deterrent to political confiscation or confiscatory taxes (Engerman 1988, ‘How the West...’).


Science-based technology has become important only in the 20th century, and its importance has been accelerating for the last 60 years. To develop technologies certain institutional arrangements are required. This requirement has so far proved an insurmountable barrier to the development of science-based high technologies in totalitarian states. Thus, the USSR has been obliged to resort to technological espionage for practically all of its military technology (Mekler 1986, ‘Soviet science...’).

The body of scientific knowledge evolves like a spontaneous order, i.e., it is the result of the action of many individuals and groups, which neither individually nor collectively intend to bring about that particular state of the body of knowledge. The system is self-correcting at least in those disciplines where theory formation is strictly controlled by empirical testing. If the body of scientific knowledge evolves as a spontaneous order and the researcher (as an ideal type) acts as a discovery-maximizing entrepreneur, then those institutional frames will best facilitate the improvement of the human capital that best approximate the market order. Competition functions both as a discovery mechanism and as a selection process. Organization of science and of innovation will profit from decentralization. In science, the intellectual counterpart to free competition in economic markets is unlimited criticism of competing problem solution; the intellectual counterpart to protectionist measures in the economic system is the tendency towards cartelization within academe. In each case the improvement of wealth — be it physical and financial wealth or human capital involving knowledge — will be impeded and, if cartelization becomes virulent, progress will stop.


Evolution has no aim. Cultural evolution produced two striking develop- ments: an increase in power, i.e. in man’s opportunity set (Stone Age man possessed the same natural resources as modern man, the difference lies in the knowledge of how to use them in order to better his lot) and an increase in individual freedom. The secret of the ‘European Miracle’ has been the evolution of limited government. The phenomenon of the westward movement of the ‘Rise of the West’ can only be explained if we keep in mind that the rise of the West has been made possible by the evolution of freedom of the economic sphere from political influence as well as from religious restrictions that lead to the security of property rights. In Europe, the constraints constituted by geography, in combination with historical accidents, led to a limited scale of political decision making and multiple sources of decision making. By attending to changes in the political conditions we can also explain the development from the ‘Economic Miracle’ of Europe to ‘Eurosclerosis’, to the corporatist state.8 The cancerous growth of government and the built-in escalation of welfare-state costs is likely to determine the future of Western Europe. This, however, is a problem, which all Western democracies face, even if in this respect some of them are better off than others (Buchanan 1986, ‘Our times...’, 35).

It is an open question whether the relatively free society, which can support autonomous sciences and is supported by it, which grew out of the ‘European Miracle’ and which constitutes a unique and fragile exception in human history, will be an episode or an enduring achievement. Much will depend on whether it will be possible to educate the educable sections of the population and above all the future decision makers so that they understand the functioning of modern society and economy. This is a cognitive and also an educational task. The comparative institutions approach outlines the consequences of various institutional arrangements: the ways institutions work out for people living under them, what opportunities various systems offer, what sort of life is possible under them. It will then be up to the individuals to choose between giving individual freedom priority in the social and public sphere or to accept some form of slavery under a totalitarian system, including unlimited democracy in the sense of the dictatorship of the majority as a special case of totalitarianism. Thus, a position taking on value issues is indispensable. Hayekians posit the value of individual freedom. In my opinion, the contractarian approach to Constitution and State conceals the value issues. Values are traded off all the time. Sometimes people sell themselves into slavery if they are paid for it — as we witness in connection with the modern welfare state. however, there is no trade-off between freedom on the one hand and economic success and scientific progress on the other hand. The two are inseparable: economic growth has come from economic freedom and competition, and scientific progress has come from a free market of ideas and intertheoretical competition.9

University of Trier

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