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All You Need Is Toleration – Article by Max Borders

All You Need Is Toleration – Article by Max Borders

The New Renaissance Hat
Max Borders
January 28, 2014
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Truth carries within itself an element of coercion.
Hannah Arendt

Identity politics has come to the freedom movement. But does it fit?

Many newly minted libertarians have come out of America’s indoctrination factories feeling a mix of guilt and sanctimony. They’re still libertarians, but they admonish you to “check your privilege” and caution that you may unwittingly be perpetuating a culture of oppression.

Libertarianism alone is not enough, they say.

Our tradition, they urge, needs now to find common cause with various fronts in the movement for “social justice”—struggles against racism, sexism, ageism, ableism, weightism, classism, and homophobia. In that movement, the unit of injustice is the group. Still, joining up means libertarians can attract more young people while forging a more complex, ethically rich political philosophy.

In short, we ought to hitch our wagons to what one might call the “victimhood-industrial complex.” If we don’t, some warn, the millennials will all run to progressivism.

Now if you don’t think this victimhood-industrial complex exists, ask Jonathan Rauch. In his 1993 book Kindly Inquisitors, he argued that free speech was quickly being lost to politically correct censors—especially in higher education. Twenty-plus years later, Rauch says, free speech in the academy is virtually dead:

Unlike most workplaces, universities are at the heart of intellectual life, and so the bureaucratization of speech controls there is more disturbing. In American universities, the hostile-environment and discriminatory-harassment doctrines have become part of the administrative furniture.

And for their student bodies, so also have diversity training, sensitivity seminars, and entire majors devoted to inculcating the victimhood ethosall of which allows victim groups to justify a dangerous promiscuity with power. That’s one reason libertarians should take caution.

Prime Virtue

To take any moral high ground on matters of subjection, we don’t need to adopt the language or agenda of the victimhood-industrial complex. Indeed, that complex (double entendre intended) is part of progressive intellectuals’ designs on power. It is intended to fragment people along contrived, collectivist lines. And we can do better.

I normally don’t make arguments based on ideological purity, but here’s an area in which pragmatic and philosophical considerations prompt us to look to our own tradition for answers. That is, we libertarians already have a virtue that works. It captures the best of our humane concern for others and discards the bromides, the claptrap, the unearned guilt of the dangerously collectivist “social justice” movement.

That virtue is toleration.

Toleration is what separates libertarianism from competing doctrines, at least when it comes to society and culture. If some principle of non-harm orients our political compass, toleration is a moral guide. I realize that might sound a little funny to anyone who’s spent five minutes on Facebook with a rabid Rothbardian. And, of course, self-styled progressives bandy the term about, too. But the classical liberal form is the original—and most resilient—sense of toleration (or tolerance), because it does not carry with it any baggage that might corrode the rule of law, or the freedoms of expression and conscience.

What has liberated great swaths of humanity is not just the idea that people should be as free as possible; it’s the idea that in order for this great pluralist project to succeed, we have to embrace a virtue that allows us to coexist peacefully with others who may not share our particular ideas about the good life (values, religion, ethnicity, culture, or lifestyle preferences). Classical liberals have always accepted the idea that people are seekers and strivers looking for something. Of course there are a billion paths to happiness, life meaning, and well-being. Accepting that, we have to put the pursuit of happiness first, which requires admitting that we’re all different, one to the next, and we will take different paths.

Toleration starts with conscientiously agreeing not to obstruct another’s path.

Our toleration is also dispositional. A more robust toleration involves a mien of empathy, respect, and open-mindedness. It requires us not just to leave other people alone in their pursuits, but also to consider their perspectives and circumstances. The toleration of social justice is often not so tolerant. It requires conformity, censorship, and consensus.

So, if by “check your privilege” one means try to imagine what life might be like for someone in different circumstances, then great. If by “check your privilege” you’re accusing someone of being part of an oppressor class just because she hasn’t been designated a victim, then you’ve thrown toleration out with the bathwater. This formulation seems to mean your rights and opinions are invalid and you have no real complaints or suffering because you belong to X group. Or, more to the point: You are obligated to pay because people who look like you in some ways did bad things at some point.

The Apparently Perfect vs. the Good

So what does it mean to coexist peacefully with others? And doesn’t toleration have limits? Toleration does not come without its paradoxes, real or apparent. It may be difficult to tolerate the intolerant, for example. But radically free speech and a thick skin are about the best we can do—though such may include fiercely criticizing others for their intolerance in a world without any bright line between disrespect and disagreement. As libertarians, we might draw our own line and not tolerate those who regard themselves as “entitled to force the value [they hold] on other people”—and we can use any peaceful means to thwart them in their attempts to disrupt others’ life plans.

No, toleration is neither a perfect virtue nor the only virtue, but it does the work of peace.

What Liberal Toleration Is Not

Our conception does not require envy or guilt to operate. Nor does it require state censorship or wealth redistribution. It doesn’t require that we adopt cultures and communities we don’t like, but rather acknowledges that those communities and cultures will emerge. Our conception of toleration requires only acknowledgement of differences coupled with that disposition to openness.

Our conception of toleration does not accept the murky idea of victim classes. The problem here is the term “class.” Some member of a class may not be a victim at all. Besides, and more to the point, accepting the idea of victim classes implies that there are perpetrator classes—that if group X has frequently been discriminated against, or abused outright, then all members of group Y are liable for those actions (and, indeed, it’s fair to assume their perspective is tainted).

What’s more, the common acceptance of the idea of a victim class can perpetuate a psychology of victimhood among the members of that class, which holds people back. Some theories of social justice go as far as to require that non-members of the victim class accept that they are victimizers by default. While it is possible to institutionalize mistreatment of a group, justice requires us to dismantle the rot in that institution and to stop putting people into groups at all, not to violate other groups for the sake of abstract redress, or to handicap the excellent, or to reward something irrelevant such as someone’s race.

Proponents of the idea of victim classes view “social justice” as a vague cluster of goods, words, and opportunities to be filtered and apportioned equally among people by an anointed few. What isn’t vague, though, is the power they demand and the privilege they mean to extract. By contrast, proponents of liberal toleration require only that you treat individuals with respect, and first, “do no harm.”

Our conception does not hypostasize or collectivize people—treating them as automatically deserving either special consideration or zealous sensitivity, which is supposed to accrue by virtue of the ascribed group membership. Such collectivism lobotomizes individuals. It robs them of their identities and pushes them to accept identities fashioned by others. It strips them of their individual circumstances. It thins their sense of personal responsibility. And it ignores the content of their character.

Our conception does not demand a perpetual pity party, nor invent reasons to be offended, nor cause one to contrive an invisible latticework of injustice that extends up and out in every direction. Instead, our conception embodies the liberal spirit of “live and let live.” The more people who think that way, the fewer victims—real and imagined—there will be. Toleration needs neither rectitude nor guilt, so demonstrations of piety are also unnecessary. It’s a position that can be held by those who think all people are basically good, or that all people are basically lousy. But that means setting aside the business of sorting out victims (the righteous) and oppressors (the sinful).

Finally, as our conception does not require the ubiquity of injustice, it allows for the flourishing of real community. Real community needs real toleration, free speech, and the inevitable frictions that come along with our colliding perspectives. It is from those frictions that better ideas and more favorable consensuses can emerge—at least if you believe John Stuart Mill and Jonathan Rauch.

Taking Back Toleration

The old adage says: To a hammer, everything looks like a nail. To someone who has been educated in the victimhood-industrial complex, everything looks like social injustice.

Toleration might ask more of us sometimes, such as that we not only acknowledge the differences among people but to try to see things from others’ perspectives (empathy). Taking on that view helps us consider how we might reduce all the frictions and figure out the kind of people we want to be. This is not a political doctrine, however. It’s more like remembering the golden rule. It’s about respecting one’s neighbor—be he Sikh or freak or breeder. It’s about acknowledging what evil, intolerant people have done in the past, but also moving on from it.

Toleration even requires us to put up with—politically, at least—the ugliest forms of expression. As Rauch reminds us, “The best society for minorities is not the society that protects minorities from speech but the one that protects speech from minorities (and from majorities, too).” And that’s hard. One has to listen to different voices, taking into account the circumstances of time, place and person, as opposed to treating people as caricatures. Whatever one’s intentions, we must remember that a lot of evil has flowed from forgetting that people are individuals.

Of course, none of this is to argue that racism or sexism or homophobia doesn’t exist, or to deny that people have been mistreated throughout history for reasons that seem arbitrary and cruel to us. It is not even to deny that people are mistreated to this very day—often for those same arbitrary reasons. Rather, my argument is intended to show that a libertarian principle of respect for persons requires toleration, not identity politics.

The great thing about libertarianism is that it is a political superstructure in which most other political philosophies can operate. No other political philosophy features such built-in, full-fledged pluralism. The other basic political philosophies have built-in asymmetries. Progressivism does not tolerate libertarians living as they wish, but libertarianism tolerates progressives living as they wish (with all the caveats about voluntary participation.) And as Hayek said about the conservative: “Like the socialist, he is less concerned with the problem of how the powers of government should be limited than with that of who wields them; and, like the socialist, he regards himself as entitled to force the value he holds on other people.”

So progressives are intolerant of economic freedom. Conservatives are intolerant of social freedom. Only libertarianism maximizes varying conceptions of the good. Nothing under libertarian doctrine precludes embedded communities of any political stripe, and in a free society, we ought to tolerate these clusters as long as they guarantee a right of exit. Indeed, our only requirement would be that if any such community is to persist, it should do so in a matrix of persuasion rather than of coercion.

If we take back toleration, we have a moral high ground that is both appealing to younger generations and works to the benefit of all people. We don’t have to live with the contradictions of progressive social engineers or with conservatives’ half-hearted deference to individual liberty. By practicing real toleration, we can dispel all the various “isms” while leaving people their life plans.

And that’s good enough for libertarianism.

This article was originally published by the Foundation for Economic Education.

Max Borders is the editor of The Freeman and director of content for FEE. He is also cofounder of Voice & Exit and the author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Mainstream Economists Prove Krugman Wrong About Hayek and Mises – Article by John P. Cochran

Mainstream Economists Prove Krugman Wrong About Hayek and Mises – Article by John P. Cochran

The New Renaissance Hat
John P. Cochran
September 13, 2013
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Paul Krugman has recently been critical of Friedman (and Phelps), the Phillips curve, and the Natural Unemployment Rate (NUR) theory in the process of arguing that due to the recent Great Recession, the accompanying financial crisis, and Bush-Obama-Fed Great Stagnation, Friedman has vanished from the policy front. Krugman makes this claim despite the fact there is an on-going vigorous debate on rules versus discretion with at least some attention to Friedman’s plucking model. While maligning Friedman’s contributions, Krugman manages a slap at Austrians and claims a renewed practical relevance for Keynes:

What I think is really interesting is the way Friedman has virtually vanished from policy discourse. Keynes is very much back, even if that fact drives some economists crazy; Hayek is back in some sense, even if one has the suspicion that many self-proclaimed Austrians bring little to the table but the notion that fiat money is the root of all evil — a deeply anti-Friedmanian position. But Friedman is pretty much absent.

The Friedman-Phelps hypothesis was the heart of the policy effectiveness debate of the 1970s and early 80s. The empirical evidence developed during the debate over the policy implications of the NUR model, at least temporally, discredited active Keynesian discretionary policy as an effective tool to reduce unemployment in the long run. One result of the debate: monetary policy appeared to improve, especially compared to the Fed’s dismal record in the late 1920s and 1930s and the mid 1960s to the late 1970s. Central banks, à la Friedman, focused on rules-based policy and inflation targeting resulting in what many, following John B. Taylor, call the Great Moderation of the early 1980s to the early 2000s.

Krugman does recognize the “stagflation (of the 1970s) led to a major rethinking of macroeconomics, all across the board; even staunch Keynesians conceded that Friedman/Phelps had been right (indeed, they may have conceded too much [emphasis added]), and the vertical long-run Phillips curve became part of every textbook.”

My early work on Hayek and Keynes (see here and here) argued that this development was important, but misleading. The then current business cycle research and its newer variants could benefit from re-examining the issues at the heart of the Hayek-Keynes debate.

Money, banking, finance, and capital structure were, and still are, for the most part ignored in much of the new (post-Friedman-Phelps) macroeconomics including the new–Keynesian approaches. In this regard, Hayek (and Mises) had then, and has now, more to offer than Keynes.

Recent papers by respected mainstream economists are beginning to recognize that attention to Hayek and Mises can be useful. Guillermo Calvo of Columbia University, in a recent paper [PDF], has even gone so far as to argue, “the Austrian school of the trade cycle was on the right track” and that the Austrian School offered valuable insights and noting that:

There is a growing empirical literature purporting to show that financial crises are preceded by credit booms including Mendoza and Terrones (2008), Schularik and Taylor (2012), Agosin and Huaita (2012), and Borio (2012).

Calvo adds “[t]his was a central theme in the Austrian School of Economics.”

Claudio Borio highlights what Austrians have long argued is a key flaw in inflation-targeting or stable-money policy regimes such as many central banks either adopted or emulated during the 1980-2008 period. This flaw contributed to back-to-back boom-busts of the late 1990s and 2000s:

A monetary policy regime narrowly focused on controlling near-term inflation removes the need to tighten policy when financial booms take hold against the backdrop of low and stable inflation. And major positive supply-side developments, such as those associated with the globalisation of the real side of the economy, provide plenty of fuel for financial booms.

Borio thus recognizes that a time to mitigate a bust is (contra-Keynes) during the boom:

In the case of monetary policy, it is necessary to adopt strategies that allow central banks to tighten so as to lean against the build-up of financial imbalances even if near-term inflation remains subdued.

William R. White, another economist who has worked at the Bank of International Settlements (BIS) and has been influenced by Hayek, has come to similar conclusions as does Calvo, who argues “Hayek’s theory is very subtle and shows that even a central bank that follows a stable monetary policy may not be able to prevent business cycles and, occasionally, major boom-bust episodes.”

In the current environment, many, including Krugman, have argued for a higher inflation target or a higher nominal GDP target to jump start the current sluggish recovery.

Austrian business cycle theory on the other hand, as recognized by Borio and Calvo, provides analysis on why such a policy may be ineffective and if temporarily effective in the short run, harmful if not destructive, in the long run. (See here and here for more.)

An easy money and credit policy impedes necessary re-structuring of the economy and new credit creation begins a new round of misdirection of production leading to an “unfinished recession.” Calvo expounds:

Whatever one thinks of the power of the Hayek/Mises mix as a positive theory of the business cycle, an insight from the theory is that once credit over-expansion hits the real sector, rolling back credit is unlikely to be able to put “Humpty-Dumpty together again.”

It is too bad it took back-to-back harmful boom-bust cycles for the profession at large to begin to again examine Austrian insights, but it does illustrate how foolish Krugman is when he argues Austrians have nothing to bring to the table.

John P. Cochran is emeritus dean of the Business School and emeritus professor of economics at Metropolitan State University of Denver and coauthor with Fred R. Glahe of The Hayek-Keynes Debate: Lessons for Current Business Cycle Research. He is also a senior scholar for the Mises Institute and serves on the editorial board of the Quarterly Journal of Austrian Economics. Send him mail. See John P. Cochran’s article archives.

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This article was originally published by the Ludwig von Mises Institute. Permission to reprint in whole or in part is hereby granted, provided full credit is given.