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G. Stolyarov II Interviews Kyrel Zantonavitch, Author of “Pure Liberal Fire”

G. Stolyarov II Interviews Kyrel Zantonavitch, Author of “Pure Liberal Fire”

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On March 7, 2015, Mr. Stolyarov invited Kyrel Zantonavitch, the author of Pure Liberal Fire: Brief Essays on the New, General, and Perfected Philosophy of Western Liberalism and founder of The Liberal Institute, to discuss his original philosophical framework and its relationship to Objectivism, Classical Liberalism, Austrian Economics, Libertarianism, and Transhumanism. Mr. Zantonavitch was asked challenging questions regarding his ideas and provocative approach, as well as the objectives of his philosophical system. The intense discussion – which, in some places, became a debate – highlighted both areas of agreement and areas of disagreement between Mr. Stolyarov and Mr. Zantonavitch.

Pure Liberal Fire is available on Amazon here.

The website of The Liberal Institute is here.

Mr. Stolyarov’s review of Pure Liberal Fire  describes Mr. Zantonavitch’s thinking thus: “There is perhaps not a single thinker in the world more fearless than Kyrel Zantonavitch. Pure Liberal Fire is the direct, provocative distillation of his thoughts on metaphysics, epistemology, ethics, politics, economics, culture, religion, and the history of philosophy – including Objectivism and Classical Liberalism. Zantonavitch seeks to evoke a pure, true liberalism, and he shows no mercy for ideologies and attitudes that constitute its antithesis. He certainly leaves no doubt in the reader’s mind about where he stands on the issues addressed – and each article within the book employs an abundance of superlative expressions – be they positive or negative. When Zantonavitch praises, he really praises – and the same goes for when he condemns.”

Mr. Stolyarov’s response to Mr. Zantonavitch’s approach is characterized by the following comment: “Zantonavitch’s approach and style would entail achieving a fiery, dramatic, immediate deposition of everything (every person, every policy, every idea) he considers evil, dangerous, or damaging. My view of reform is more surgical, focused on getting the sequence of steps right so as to minimize the damage inflicted during the transition while ridding the world of the disease of bad policies (and, in a more long-term fashion, through persuasion and free-market education, also ridding it of bad thinking of the sort that motivates bad policies).”

Transhumanism and Minarchism Are Compatible: A Response to The Sliceman – Article by G. Stolyarov II

Transhumanism and Minarchism Are Compatible: A Response to The Sliceman – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
April 27, 2014
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This essay is part of a debate with The Sliceman on whether transhumanism and minarchism are compatible. For prior installments of the conversation, see the following essays:

– “Why I Do Not Adhere to Anarcho-Capitalism” by G. Stolyarov II

– “In Response to G. Stolyarov II and his Transhumanist Minarchism” by The Sliceman

I appreciate that The Sliceman has taken the time to post his thoughts on the question of the compatibility of transhumanism and minarchism, and I thank him for his good words regarding my work. If, as he writes, we agree on 90% of the issues, “with the lone exceptions being minarchy and monogamy”, then we have plenty of common ground that could also be used to reach some points of agreement on the question of transhumanist minarchism.

My aim in this discussion will not be to discredit or refute anarcho-capitalism; instead, I will strive to show that transhumanist minarchism is a fully reasonable and logically consistent position. Empirically, transhumanist anarcho-capitalism also clearly has articulate adherents and holds out promise for the incremental improvement of the human condition. The Sliceman writes of my views, “Your stance is that, [anarcho-capitalism] would be better than normal statism, but not as good as minarchism.” This is correct, meaning that I would see transhumanist anarcho-capitalism as an improvement over the status quo both politically and technologically. However, transhumanist minarchism would be superior still, because it would contain a method for resolving tensions and disputes that would have escalated into violence under transhumanist anarcho-capitalism.

The Sliceman writes in response to my statement that anarcho-capitalism has no practical application in today’s world that “yes, there has never been a practical application of Anarcho-Capitalism replacing a state but there has never been an economic powerhouse minarchy that didn’t evolve into totalitarianism either. We are BOTH in the realm of theory here, my friend.”

In an important way, I agree. I wrote in “Why I Do Not Adhere to Anarcho-Capitalism” that “Neither my position nor the anarcho-capitalists’ has any existing real-world incarnation. The question before us, then, is which of these positions would result in less overall violence and coercive dishonesty if implemented in practice?” However, in another important way, I disagree with the argument that an empirical refutation of minarchism can be offered by observing formerly freer societies that have devolved into totalitarian or near-totalitarian ones. The Sliceman is correct that the United States has undertaken this trajectory over the past 238 years, while in the meantime facilitating considerable prosperity and economic growth through political structures that were freer than most. However, at no point in history was the United States minarchistic – not even by a long shot. The U.S. Constitution and Bill of Rights were closer to the libertarian ideal than the governance structures of 18th-century Europe, to be sure, so they constituted steps in the right direction for their time. But the very language of these documents – including the “Commerce Clause”, the “General Welfare Clause”, and the “Necessary and Proper Clause” – opened the floodgates for extensive centralized intervention as these clauses were interpreted to have increasingly expansive and open-ended meanings. The devolution of the United States to the near-totalitarianism it exhibits today is not the result of minarchism, but israther due to the infusion of non-minarchistic elements into the US political structure at its founding. (The recognition of slavery certainly did not help, either; it paved the way for the bloody Civil War, which led to the first round of attempted totalitarianism by central governments under Abraham Lincoln in the Union and Jefferson Davis in the Confederacy.) I also note that the non-minarchistic nature of the early United States can be clearly seen in such travesties against liberty as the Alien and Sedition Acts of 1798 (which effectively forbade criticism of the government) and even Thomas Jefferson’s Embargo Act of 1807 (which effectively forbade all overseas trade) – neither of which would be conceivable even in today’s United States.

So the historical trajectory of the United States is no more an argument against minarchism than the brutal infighting and miserable standards of living in Somalia today are an argument against anarchism. The argument presented by The Sliceman that bureaucracies tend to try to grab more power for themselves may be true, but, if so, its only implication is that non-minarchistic elements of a government will tend to expand over time, changing the proportions of an initial mix of coercive and non-coercive government functions to be more heavily dominated by the coercive functions over time. However, if a minarchist government lacks the coercive functions (which involve non-retaliatory use of force) to begin with, and both the constitution and public opinion provide strong barriers to the emergence of such coercive functions, then the trajectory toward totalitarianism need not occur.

The Sliceman writes, “In fact, I believe minarchy to be much more theoretical than anarchy. Anarchy can be seen all over the world every day in the form of capitalism and voluntary association and order. Minarchy is almost never seen in all of history.” Both minarchy and anarchy are similarly theoretical, in my view, because, just as there has never been a completely minarchist government in history, there has never been a complete anarcho-capitalism in any society. Because every person encounters some dose of coercion in going about his or her daily life, that coercion necessarily shapes individual incentives and the kinds of markets and goods and services that arise in the society where the coercion exists. It is true, for instance, that unregulated black markets arise virtually everywhere that a government attempts to prohibit a good or service, but the content, environment, and limitations of those black markets are very much determined by the fact that the prohibition exists in the first place, as well as the extent and manner of the prohibition’s enforcement. Just as a true minarchism could only exist if a government did not have any legitimate power to initiate force, so a true anarcho-capitalism could only exist if there were no need to develop workarounds for the limitations imposed by a centralized authority.

This leads me to the conclusion that what matters more is the incremental direction of political change that one advocates – rather than one’s desired theoretical destination. For instance, abolishing NSA surveillance of the general population, dismantling the TSA, repealing the income tax, withdrawing all overseas US troops, halting the War on Drugs, and ending the requirement that the FDA approve all medicines prior to their availability for purchase by the general public, would all be measures favored by both minarchists and anarcho-capitalists. Their implementation would greatly increase the liberty enjoyed by people in practice, and such measures would also dramatically accelerate the rates of technological progress and economic growth. Whether the changes could be best accomplished by working within or outside the political system is an empirical question, and various strategies can be, at their core, compatible with both minarchism and anarcho-capitalism.

The Sliceman writes: “how dare you consider yourself a transhumanist, yet scoff at that which hasnt been tried yet[?] The automobile has not yet been created, but that is no reason to think the future is a faster horse. If history has taught us anything, it’s that someone’s lack of imagination does not deter future technological advancement in the areas of industry, economy, religion, or government.”

My argument regarding the lack of practical application for anarcho-capitalism does not hinge on the fact that it has not been tried yet in its full form. In fact, I would encourage some group of people to try it – perhaps on a seastead, a small island, or a space colony. The results of such an experiment would provide valuable empirical evidence and fuel for further thought and work in political philosophy. As I have previously stated, my preferred political system of minarchism also has not been tried in its consistent form, so my preference for it does not stem from any aversion for the new and untried.

Rather, when I say that anarcho-capitalism has no practical application today, my exact meaning is that I have yet to see a viable proposal for bringing it about through a transition from the status quo. Unlike minarchism, for whose attainment a sequence of political reforms can be articulated, many strains of anarcho-capitalism reject working within the political system, period, so it is unclear how exactly the transformation from a militaristic welfare state to an anarcho-capitalist society is envisioned to occur. As I wrote in “Why I Do Not Adhere to Anarcho-Capitalism”, “I happen to believe that political theory is more than a mind game; it has relevance to the real world, and it ought to have real-world implications for how we act in our own lives. It is not enough to simply state that one would like the world to be a certain way. Rather, a specific, technical, and quite involved series of steps is necessary to transition from the status quo to any state considered desirable. To simply contemplate the end outcome without any idea of how to attain it or even approach it is to divorce one’s political thinking from reality.” It also appears to me that, when an anarcho-capitalist does propose ways of working “outside the system” – including seasteading, cryptocurrencies, informal markets, and digital communities – these ways are also perfectly compatible with minarchism. They involve the use of technological innovation, jurisdictional competition, and civil society to motivate a reduction of political power from without. Yet, unfortunately, too many anarcho-capitalists let the perfect (in their minds) be the enemy of the good, and they reject or resist any attempts at bringing about incremental change (even outside of politics proper), for fear that those attempts are somehow intertwined with and corrupted by the existing political or social order. I do support the practical efforts of anarcho-capitalists to achieve their vision in peaceful ways. However, if and when they do this, they do not engage in any activities that are exclusively anarcho-capitalist or that would require adherence to anarcho-capitalism to pursue. A minarchist could undertake those same actions just as effectively.

I note that the lack of a concrete proposal to achieve anarcho-capitalism is quite different from what one observes with transhumanist projects and aspirations. Virtually every transhumanist vision, from indefinite life extension to various incarnations of the technological Singularity, has an associated detailed sequential plan for attaining it or view of the unfolding events that would bring it about. Consider, as examples of this, Aubrey de Grey’s SENS roadmap to reversing all the types of age-related damage, or Ray Kurzweil’s Law of Accelerating Returns, forecasting the continued exponential growth of emerging technologies. I certainly see the amount of centralized control in a society as capable of having a powerful impact on the rate at which these transhumanist aspirations can be realized; the more centralized control, the slower the rate. However, neither minarchism nor anarcho-capitalism would impose coercive restrictions on transhumanist projects, and so both are, in theory, quite compatible with transhumanism. Minarchism has the added advantage that it more readily embraces incremental political reforms that could help make an existing society more free, even if any given reform will not completely achieve the libertarian ideal. Minarchist activism could therefore be one effective way to increase the rate of technological progress in the near-to-intermediate term, paving the way for massive prosperity in the long term, which would increasingly consign the “social service” role of many welfare states to irrelevance.

The Sliceman writes, “Libertarian Tranhumanism and Minarchism is an extremely rare match. The creed of Transhumanism is to use historical patterns and trends to predict the future. I’m sure this study greatly contributed to your [belief] and support for indefinite life extension. The creed of Libertarianism is to increase liberty, freedom, and the protection of private property by decreasing the institutionalized initiation of the use of force that is the state.”

I disagree with the proposition that libertarian transhumanism and minarchism are a rare match. It is important to keep in mind that, among libertarians today, anarcho-capitalism is still a significant minority position. Transhumanism attracts significant interest from both libertarians and non-libertarians alike, but its affinity with libertarianism is stronger, so a larger proportion of libertarians are transhumanists as compared to non-libertarians. I have seen no evidence to suggest that anarchist libertarians are more inclined toward transhumanism than minarchist libertarians. While I have done no polling on this question (and some empirical research would certainly be extremely interesting here), a more plausible hypothesis is that transhumanism attracts libertarians independently of their views on the question of minarchy versus anarchy. So if X% of libertarians are anarchists, and (100-X)% are minarchists, and Y% of libertarians are attracted to transhumanism, then it would appear that, as long as X% < 50%, then X%*Y% would be less than (100-X)%*Y%, so there would be more minarchist transhumanists than anarcho-capitalist transhumanists. Again, this is only a hypothesis at present, and conducting a scientific poll of libertarian transhumanists would enable a more in-depth exploration of this question.

The Sliceman continues by describing an “exponential curve of liberty” that has unfolded throughout history, as greater technological advancement, especially in communication technology, has increased individual sovereignty. I agree with this general characterization. In fact, it fits with Steven Pinker’s immensely well-researched look in The Better Angels of Our Nature into the decline in rates of human violence over time, as technology, culture, and political liberty have tended to progress. However, Pinker is certainly no anarchist. He points out that hunter-gatherer “stateless” societies experienced per capita rates of violence and murder greatly exceeding those of the most despotic governments or those that were manifested during the two World Wars of the 20th century. Pinker’s view is that even despotic government is preferable to tribalism or lawlessness, while constitutional or limited government is greatly preferable to despotic government in reducing the rates of violence (which are at their lowest point now as compared to any prior era) and maximizing the scope of individual liberty. I have read the entirety of The Better Angels of Our Nature, and it appears that the evidence Pinker presents suggests that technology, commerce, and culture – rather than political structures – offer the greatest contributions to the reduction of violence, perhaps because political structures are very much conditioned by the technological, economic, and cultural environments in which they arise.

The Sliceman writes, “The question here is what kind of liberty this technology will lead us to. Your answer seems to be that the exponential change in liberty will come to a stop at minarchy and we will just stay there, where my answer is that the exponential change will continue and the only logical conclusion is that we will approach 100% liberty with only [a] few tiny fractions of a percent of violence being accounted for by the fact that we are still, in fact, animals, and animals are violent.”

Supposing that exponential increases in liberty through technological progress can be achieved, this is not per se a sufficient argument that all government would disappear. For instance, exponential advances have been made to store data in ever-smaller volumes of physical space. This does not, however, suggest that we will ever arrive at a point where no physical space at all will be required for the storage of data. At most, we could perhaps keep reducing the space required without any lower limit, but we would only asymptotically approach zero space without ever getting there. The same reasoning could apply to government. Indeed, I see in accelerating technological progress our best prospect for minarchism. As advancing technology raises the prevailing levels of prosperity, fewer people will find themselves in need of government services to rectify any perceived deficiencies in their lives. The more the role of the redistributive welfare state dwindles away, the more governments would be relegated to their theoretically justified roles under minarchism – the resolution of disputes and protection against the initiation of force. It is quite feasible that additional private mechanisms for dispute resolution would emerge, and people would become generally more comfortable and less likely to want to engage in violence in the first place – both of which phenomena would reduce the frequency with which the government would resolve disputes in practice or interject its retaliatory force. If many humans receive augmentations to their minds, increasing both their intelligence and their moral sense, then the result will be an even further-reduced inclination to initiate force. But would this trend ever result in the elimination of government altogether? I doubt it – for the simple reason that the ability to have an ultimate arbiter of disputes or an entity that can interject itself to prevent violence would be too valuable for a future society to do away with altogether. 99.9999% of future transhumans may be entirely peaceful and capable of dealing with one another solely through market arrangements. But suppose there is even one person who rejects all transhumanist paths for humankind and who seeks, in some way, to use violence to wage war on the transhumanist society. Maintaining some very minimal government to deter this person would be wise. Furthermore, if the situation improves to the point where no such person exists, then the mechanisms of a minimal government might well lie dormant for a time – but there would be no reason to abolish them. It would be better to keep them available, just in case a future threat of violence arises, and all market-based methods for preventing it fail. After all, what would happen if some barbarous militaristic alien species discovers the transhumanist Earth and simply launches an invasion, with no questions asked?

The Sliceman writes, “You don’t need an ultimate arbiter when you are running your contracts through the Bitcoin Blockchain or its future replacement. You don’t need an ultimate arbiter when everything on Earth is constantly being recorded and a murderer (whose act can be proven 10 ways from Sunday through constant voluntary surveillance i.e.: Google glass, dashcams, and their future equivalents) can be given a voluntary unanimous Yelp review of ‘exile’.” In some cases, technologies such as the blockchain or universal sousveillance might actually generate more of a need for an ultimate arbiter. It is true that those technologies can facilitate more transparency and discovery of facts, but, in some cases, they are just as open to exploitation for nefarious motives. For technologies based on the blockchain, this is evidenced by the many thefts that have occurred from third-party Bitcoin services or the dishonesty and consequent failure of Mt. Gox. For sousveillance, there is an extremely fine but important line between monitoring that can help deter or prevent crime and monitoring that can infringe on individual privacy and deter innocent behaviors that could only occur in private. When such conflict areas arise (as is inevitable with transformative new technologies), it would be nice to have an impartial arbiter that could resolve conflicting legitimate interests and help overcome the “growing pains” of technological change. Of course, today’s archaic and cumbersome legal system is not the answer to this challenge, but a highly streamlined, extremely knowledgeable, and technologically sophisticated minarchist court might be.

The Sliceman writes that “Technology does not stop at minarchy.” I respond that, ultimately, no single form of government can be seen as the final form, upon which there cannot be any improvement. I do not rule out the existence of true anarcho-capitalism at some future time, somewhere. In “Why I Do Not Adhere to Anarcho-Capitalism”, I wrote that “Perhaps the anarcho-capitalist ideal will be realizable in some distant future time, once human beings have progressed morally and technologically to such an extent that the initiation of force is no longer lucrative to anybody.” I would have no quarrel with transhumanists who attempt to implement anarcho-capitalism through emerging technologies – but, at the same time, minarchism appears to be a far more proximate prospect, and, in the next several decades at least, the very same concrete methods that any anarcho-capitalist would effectively pursue, could also be used to pursue minarchism (since societies would be moved in the direction of both ideals by the application of such methods). Perhaps one implication of my argument is that, for the time being, it does not really matter whether one is a minarchist or an anarcho-capitalist, as long as one supports pro-liberty incremental changes. Another implication, however, is that minarchism and transhumanism are fully compatible, at least for the foreseeable future.

Labels and Ideological Bubbles – Article by Sanford Ikeda

Labels and Ideological Bubbles – Article by Sanford Ikeda

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The New Renaissance Hat
Sanford Ikeda
August 30, 2013
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Be mindful of how you label the people with whom you disagree.

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When I engage in an ideological discussion I try to be sensitive to how I ideologically label the person with whom I’m talking and how she labels me. I’m not talking about dismissive or openly pejorative words (e.g. evil, stupid, silly), but proper terms of discourse. More than just good manners, how we habitually label our opponents in ideological dialogue could reveal something unpleasant about the ideological world we inhabit.
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Getting the Label Right

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Now, some people argue that “ideas matter, labels don’t.” When we’re talking about specific ideas, such as for example military intervention in the Middle East, then yes calling it liberal, libertarian, progressive, socialist, or whatever may add nothing to the discussion. But when referring to the worldview of a particular person or group of like-minded persons, especially in the context of a public debate, then how we label ourselves and others can matter a great deal. If the goal is to promote constructive dialogue then it’s important to get the labels right.
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We prefer in such cases to be called by the label that we identify ourselves with. I don’t like being called a conservative or a liberal because those labels signify sets of ideas and policies, many of which I do not hold. I prefer to be called a libertarian. (Classical liberal might be better but no one in the mainstream knows what that is.)
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Colleagues I’ve known for decades at my college assume that I’m a conservative because I’ve come out publicly against nationalized healthcare, from which they wrongly infer that I oppose same-sex marriage and that I “support our troops” in foreign wars. Readers of The Freeman have, I’m sure, had to defend themselves against the charge of being “pro-business” because of our skepticism of regulation and high taxes. We have to explain that upholding the free-market is not pro-business, pro-consumer, or pro-labor (although the free-market position is in a sense “pro” all those things and more). That kind of mislabeling, however annoying, can be the result of an honest mistake—one I know I make myself.
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Mistakenly mislabeling someone is one thing: conservative for libertarian, marxist for progressive. Another is deliberately mislabeling your opponent, a trick that forces her to waste time defending herself against the false charge. But there’s a third kind of mislabeling that reflects a deeper sort of error, one that issues from exclusivity and insularity.
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Who calls herself a Neoliberal or a Statist?

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For example, I’m reviewing a book about cities whose author uses the word “neoliberal” a lot. It’s used mostly by Europeans on the political “left”—e.g., social democrats, progressives, socialists, greens—to refer to people or groups who hold some sort of “libertarian” views. I’ll explain in a moment why I’m using scare quotes here.
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From what I’ve been able to gather from my European colleagues, however, no one actually identifies herself as a “neoliberal.” Neoliberal is apparently a term some attach to positions “on the (extreme) right,” which apparently includes people thought to have an anti-union or pro-business agenda. There are such people, of course, but there’s a reason no one self-identifies as a neoliberal.
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As Stanley Fish explained a few years ago in The New York Times: “…neoliberalism is a pejorative way of referring to a set of economic/political policies based on a strong faith in the beneficent effects of free markets.” So “neoliberal” is pejorative.
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And before libertarians get too indignant, let me point out that we sling words like “collectivist” and “statist” when describing our opponents, and to my knowledge no one self-identifies with those terms, either. To be sure, among our ideological comrades, they may have a fairly clear meaning and may spark a certain esprit de corps. But consistently using a word, over a wide range of venues, to describe others that no one ever uses to self-identify is a pretty good sign that you live in an ideological bubble.
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Evidently, while the author of the book I’m reviewing says she’s writing for “an interdisciplinary readership,” she takes it for granted that it will be an ideologically sympathetic one.
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Our Ideological Bubbles

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An ideological bubble, as I’m using the term, is a social network with shared ideological understandings that closes its members off to others with opposing views. You can be a staunch market-anarchist, for example, but still be willing to have a serious, civil conversation with people with whom you strongly disagree. Put simply, you live in an ideological bubble if the only people whom you will talk to seriously about ideology are those you already agree with.
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An ideological bubble insulates us from real-time criticisms of our principles and positions, retarding our intellectual growth. It gives us a false sense of security and breeds self-satisfaction, off-putting harshness, and intolerance—things destructive to civility. Also, keep in mind that it’s often the bystanders to a debate whom we want to persuade, and they will consider our language and conduct when judging our ideas.
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One of the things I’ve learned from my great teacher Israel Kirzner is that we can’t realistically be aware of all of our current limitations because we simply don’t know all that we don’t know. We have blind spots, and that means intellectual bubbles of all sorts are inevitable.  But that doesn’t mean that they have to remain invisible to us. Kirzner also taught us that creative discovery is possible. The signs are there, and keeping an eye open to them will give us a chance to make them at least a little more permeable.
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Sanford Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism.
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This article was originally published by The Foundation for Economic Education.
The Importance of Subjectivism in Economics – Article by Sheldon Richman

The Importance of Subjectivism in Economics – Article by Sheldon Richman

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The New Renaissance Hat
Sheldon Richman
October 3, 2012
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After many years, Frédéric Bastiat remains a hero to libertarians. No mystery there. He made the case for freedom and punctured the arguments for socialism with clarity and imagination. He spoke to lay readers with great effect.

Bastiat loved the market economy, and badly wanted it to blossom in full—in France and everywhere else. When he described the blessings of freedom, his benevolence shined forth. Free markets can raise living standards and enable everyone to have better lives; therefore stifling freedom is unjust and tragic. The reverse of Bastiat’s benevolence is his indignation at the deprivation that results from interference with the market process.

He begins his book Economic Harmonies (available at the FEE store) by pointing out the economic benefits of living in society:

It is impossible not to be struck by the disproportion, truly incommensurable, that exists between the satisfactions [a] man derives from society and the satisfactions that he could provide for himself if he were reduced to his own resources. I make bold to say that in one day he consumes more things than he could produce himself in ten centuries. What makes the phenomenon stranger still is that the same thing holds true for all other men. Every one of the members of society has consumed a million times more than he could have produced; yet no one has robbed anyone else.

The Existence of Privilege

Bastiat was not naïve. He knew he was not in a fully free market. He was well aware of the existence of privilege: “Privilege implies someone to profit from it and someone to pay for it,” he wrote. Those who pay are worse off than they would be in the free market. “I trust that the reader will not conclude from the preceding remarks that we are insensible to the social suffering of our fellow men. Although the suffering is less in the present imperfect state of our society than in the state of isolation, it does not follow that we do not seek wholeheartedly for further progress to make it less and less.”

He wished to emphasize the importance of free exchange for human flourishing. In chapter four he wrote,

Exchange is political economy. It is society itself, for it is impossible to conceive of society without exchange, or exchange without society. …For man, isolation means death….

By means of exchange, men attain the same satisfaction with less effort, because the mutual services they render one another yield them a larger proportion of gratuitous utility.

Therefore, the fewer obstacles an exchange encounters, the less effort it requires, the more readily men exchange.

How does trade deliver its benefits?

Exchange produces two phenomena: the joining of men’s forces and the diversification of their occupations, or the division of labor.

It is very clear that in many cases the combined force of several men is superior to the sum of their individual separate forces.…

Now, the joining of men’s forces implies exchange. To gain their co-operation, they must have good reason to anticipate sharing in the satisfaction to be obtained. Each one by his efforts benefits the others and in turn benefits by their efforts according to the terms of the bargain, which is exchange.

But isn’t something missing from this account?

Austrian Insight

Indeed, there is: the subjectivist Austrian insight that individuals gain from trade per se. For an exchange to take place, the two parties must assess the items traded differently, with each party preferring what he is to receive to what he is to give up. If that condition did not hold, no exchange would occur. There must be what Murray Rothbard called a double inequality of value. It’s in the logic of human action–which Ludwig von Mises christened praxeology. Bastiat, like his classical forebears Smith and Ricardo, erroneously believed (at least explicitly) that people trade equal values and that something is wrong when unequal values are exchanged.

Perhaps I am too hard on Bastiat. After all, he was writing before 1850. Carl Menger did not publish Principles of Economics until 1871. Yet the Austrians were not the first to look at exchange strictly through subjectivist spectacles, that is, from the economic actors’ points of view. The French philosopher Étienne Bonnot de Condillac (1715-1780) did so a hundred years before Bastiat wrote:

The very fact that an exchange takes place is proof that there must necessarily be profit in it for both the contracting parties; otherwise it would not be made. Hence, every exchange represents two gains for humanity.

Bastiat Unaware?

Well, perhaps Bastiat was unaware of Condillac’s argument. That is not the case. He reprints the quote above in his book and responds:

The explanation we owe to Condillac seems to me entirely insufficient and empirical, or rather it fails to explain anything at all. . . .

The exchange represents two gains, you say. The question is: Why and how? It results from the very fact that it takes place. But why does it take place? What motives have induced the two men to make it take place? Does the exchange have in it a mysterious virtue, inherently beneficial and incapable of explanation?

We see how exchange . . . adds to our satisfactions. . . . [T]here is no trace of . . . the double and empirical profit alleged by Condillac.

This is perplexing. Clearly, the necessary double inequality of value is not empirical or contingent. Contra Bastiat, the double inequality explains quite a lot, and his questions all have easy answers.

Yet more perplexing still is Bastiat’s statement in the same chapter: “The profit of the one is the profit of the other.” This seems to imply what he just denied.

Consequential Failure

Bastiat’s failure to grasp this point had consequences for his debates with other economists. For example, he and his fellow “left-free-market” advocate Pierre-Joseph Proudhon engaged in a lengthy debate over whether interest on loans would exist in the free market or whether it was a privilege bestowed when government suppresses competition. Unfortunately, the debate suffers because neither Bastiat nor Proudhon fully and explicitly grasped the Condillac/Austrian point about the double inequality of value. As Roderick Long explains in his priceless commentary on the exchange,

[E]ach one trips up his defense of his own position through an inconsistent grasp of the Austrian principle of the “double inequality of value”; Proudhon embraces it, but fails to apply it consistently, while Bastiat implicitly relies on it, but explicitly rejects it. . . .

Proudhon’s case against interest seems to depend crucially on his claim that all exchange must be of equivalent values; so pointing out the incoherence of this notion would be a telling reply. But Bastiat cannot officially give this reply (though he comes tantalisingly close over and over throughout the debate) because elsewhere–in his Economic Harmonies–Bastiat explicitly rejects the doctrine of double inequality of value.

How frustrating! Bastiat has so much to teach. But here is one blind spot that kept him from being even better.

Sheldon Richman is the editor of The Freeman and TheFreemanOnline.org, and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America’s Families.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.