Authoritarian Government And Bad Economics In The Conservative Style

Last week, I mentioned the nexus of relatively democracy friendly traditional conservatism and anti-democracy variants like “libertarianism,” utopian anarchism, and fascism, involved “small,” “minimal,” “inactive” democratic government. Let’s discuss this week.

Recall the role of economic power in resolving interpersonal conflicts of preferences in markets, and the role of coercive government power, political power, in addressing the ethical issues relating to defining, distributing, using economic power in that context. Last week, I suggested conservatism involves one’s perspective on that state of affairs and went through various permutations of conservatism from democracy-friendly traditional conservatism to current anti-democracy versions like “libertarianism,” utopian anarchism, and fascism. An interesting transitional or intermediate position is the form of conservatism that supposes democratic government acceptable as long as it’s “small,” “minimal,” “inactive,” and so on. The idea raises some interesting ideas, so let’s just complete the thought this week.

A point I’ve made many times before is I suppose no one really supports gratuitously large government. Everyone supports government as “small” or “minimal” as possible for it to fulfill whatever they see as its proper functions, so the issue here is clearly about functions. Consider the democratic government coercion that underlies economic power and the use of economic power in markets to resolve interpersonal conflict. Are conservatives saying this is not a correct function for government to address? Are they suggesting utopian anarchism? Sometimes, but usually not. What conservatives usually have in mind is government should fulfill that function, but democracy must not be allowed to change some preferred ethical position on the definition, distribution, or use of economic power. That revision of laws surrounding the definition, distribution, or use of economic power, or that use of some mechanism other than economic power in markets to resolve interpersonal conflicts of preferences, is what conservatives mean by “active” or “large” government.

Government unresponsive to the ever changing ethical beliefs and views of the citizens on those significant economic issues is a form of authoritarian government, and depending on one’s position on any potential residual role for democracy, often equates simply to fascism. However, the fascism involved is not expansive like the old National Socialism, which ostensibly took as one of its goals the welfare of society including the poor. American conservatives are looking more for authoritarian government ready to tell poor people to drop dead. American fascists want a “small,” “limited,” “inactive” fascist government devoted solely to enforcing and defending economic power defined, distributed, used in markets in certain ways they prefer. It’s not “socialism” in the broadest sense, although nice for a certain part of society, certainly. On the other hand, some American fascists may be confused, or profess to be confused, on that point by the argument in anti-democracy bad economics in the conservative style that their approach is socially optimal, best for everyone, which would suggest a form of “socialism.” Of course, one of the funny things about fascism is once it’s there, once one sets up government coercion and power in a way that doesn’t relate back to the ethics of the people via democracy, it famously becomes a bit hard to control and unreliable in that way.

The potential congruence of conservatives’ ethical positions about the proper definition, distribution, and use of economic power with some given expression of government coercion and power on those issues can lead to various distinctive mis-specifications of the issue. For example, one fellow told me not long ago a non-democratic government simply enforcing certain rules relating to the definition, distribution, use of economic power to resolve interpersonal conflicts is the “opposite” of authoritarian government. Along the same lines, I recently saw a presumably unintentionally humorous graphic on this platform that had “authoritarianism” at one pole and “libertarianism” at the other. Similarly, I recently read a thread suggesting if democratic government revises laws on defining, distributing, using economic power to resolve interpersonal conflict, then government is “choosing winners and losers” in a way it is not if it does not revise those laws. It should be clear what’s going on in these cases is not a generalized concern about government functions or coercive power, about the role of government in creating and maintaining a system for resolving interpersonal conflict, but about the ethical views it expresses. It’s the sort of confusion that leads to the curious and typically American phenomenon of people essentially supporting non-democratic, authoritarian, fascist government, while supposing they’re actually fighting against it, in the name of liberty or freedom. One very typical sort of fascist in the USA is a “libertarian” who has figured out it’s not a coherent theory and discovered utopian anarchism is not a real thing either, leading him or her to the last refuge of the over inflated ego unwilling to countenance democracy: fascism. They meet up with the more traditional, self-aware, violent, bullying, often theocratic social order enforcing sort of old school fascists to form the curious Frankenstein's monster that is the contemporary Republican Party of the USA. A Big Tent for anti-democracy egoists of all sorts.

Again, it’s perfectly fine to have any views on resolving interpersonal conflicts one likes. However, one must acknowledge other people have views as well, and that, plus an understanding of the fundamental nature of ethics, leads one inevitably back to the democratic ethos. The beautiful thing about democracy is that it directs the energy and enthusiasm that often attends ethical views relating to the proper resolution of interpersonal conflicts away from street thuggery, shoot outs, and so on, to more or less reasonable, peaceful debate. Democracy may not always deliver what one wants when one wants it, but such a contrast to the mute, sullen slavishness one associates with authoritarian systems, threatening any day to erupt into unfortunate violence, instability, destruction, and social upheaval.

It’s one thing to watch people knowingly, consciously embrace fascism under some dodgy notion it’s superior to democracy. It’s something else entirely to watch people unknowingly perform a backwards pratfall into it. We should fix anti-democracy bad economics in the conservative style.

Economic Power

Maybe this week I can take a closer look at what I call “economic power,” by which I mean of individuals, not to be confused with “market power” of firms in non-competitive markets. I’ve noticed some people may have some trouble with the term. Economic power, as I use the term, is just wealth, money, financial resources, more broadly legal claims that allow one to control resources in the context of resolving interpersonal conflicts of preferences over resources and the use of resources.

Ever hear someone propose there is no coercion in markets? Seems quite lovely, doesn’t it? Everyone gets whatever he or she wants? No, not really. Everyone gets whatever he or she wants and has the economic power to obtain. Great, so they’re giving economic power away? No, not really. Someone is defining economic power using legal property specifications, enforcing those definitions, making rules for using it to resolve particular interpersonal conflicts of preferences and to distribute it. Want to see coercion? Go outside the rules someday. See what happens. In all systems other than real, actual, violent, bloody, dysfunctional anarchism, government force, coercion, lies behind the resolution of interpersonal conflicts of preferences, whether they’re resolved using economic power in markets or any other mechanism.

Some time ago, someone asked me why I kept talking about economic power rather than simply preferences when discussing markets. I don’t think he was being insincere. Probably just under the influence of bad economics in the conservative style, which suppresses such issues. Well, perhaps a bit confused as well by the fact any given transaction typically involves only a small fraction of one’s economic power, people are rarely priced out of markets entirely, and thinking about aggregate transactions and economic power involves a further step. The poor, with low economic power, can usually participate to some degree, but soon enough they run out of economic power. The rich, of course, participate right along with them, at first, albeit because of the power differential more at the level of whims than needs. And, of course, the economic power of the rich allows them to continue using markets to claim resources long after the economic power of the poor has been exhausted. The rich can participate all day long, every day, and always be ready to come back for more. Markets allocate resources to those who have the economic power to claim them, and, yes, also the desire or preference to have them, not to those who have the strongest preference. They’re not magical or utopian. They don’t give everyone whatever they need or want. A starving poor child may have a strong preference for food, but the market will address the fleeting whim of the rich man or woman. That’s the whole issue. If one doesn’t understand that, one doesn’t really understand markets or the normative issues involved.

If one recognizes the role of economic power in resolving interpersonal conflicts in markets, and the role of coercive government, political power, in defining, distributing, using it, and supports certain forms of ethics in that area, one may end up a traditional conservative. Nothing wrong with that. A traditional conservative has his or her ethical views on the subject of economic power and the proper use of it, like anyone else, and is willing to engage in a democratic system with those having other views to reach some forever temporary resolution. Although at one level traditional conservatives may find using economic power and markets to resolve interpersonal conflict superior to other potential mechanisms associated with government activity, they accept democracy as the means to resolve disputes relating to that issue.

If one has difficulties with the role of economic power in resolving interpersonal conflicts in markets, or the role of government power in defining, distributing, using it, one may end up with one of three extended forms of conservatism: libertarianism, anarchism, fascism. I find these extended forms of conservatism considerably more obnoxious than the traditional form because they’re all more or less incompatible with the democratic ethos and generate unnecessary confusion and conflict. If one simply ignores the legal power backed by government coercion underlying economic power wielded in markets, one may end up with “libertarianism,” fake anarchism, an incoherent matter of selective perception that interferes with sensible discussion of the relevant issues. If one recognizes the legal power backed by government coercion underlying economic power wielded in markets, but supposes attempts by democratic government to revisit or revise those laws or use other mechanisms uniquely coercive and inappropriate, one may end up with fascism. If one rejects the need for government coercion underlying economic power wielded in markets, supposes one can have stable markets without law, without property specifications, without rules on the use of economic power, one may end up with utopian anarchism. Those three expressions of extended conservatism: “libertarianism,” fascism, and utopian anarchism, are united in their opposition to democratic government, which they propose is inconsistent with the ethical resolution of interpersonal conflicts, freedom, liberty, etc. The nexus of relatively democracy-friendly traditional conservatism and anti-democracy extended conservatism involves “minimal,” “small,” “inactive” democratic government. But true to my word to keep things a bit shorter, let me take that up again a different day.

To understand the relation of democracy to markets, one must understand the role of “economic power” in resolving interpersonal conflicts of preferences in markets, and the role of government in addressing the ethical issues associated with defining, distributing, and using it.

Alternatives To Bad Economics In The Conservative Style

I thought this week I might try to step back and speak to conservatives of the more sincere sort who may be looking for alternatives to bad economics in the conservative style but still want to express the same normative perspectives. I’ve tried to establish as part of my on-going project to clarify what’s going on with bad economics in the conservative style that the “bad” I have in mind pertains to misleading, false, confusing, not “bad” as in normative views I personally reject. Of course, I do have my own normative views, which I’m happy to share, and frequently do, and my normative views are what motivates me to be concerned about misleading bad economics in the conservative style in the first place. However, in terms of addressing my primary concern, bad economics in the conservative style, all I’m trying to do is facilitate the conversation about normative or ethical issues, dispel confusion and unnecessary conflict. The expression of my own normative views is secondary.

I mention often that bad economics in the conservative style is a bait and switch involving neoclassical welfare economics, with one set of normative inputs and factual premises, and other forms of typically applied economics, with another set of normative inputs and factual premises. It often gets the job done in a rhetorical or political sense for conservatives who support the normative views involved. It can shut down critics, render them confused, unable to participate. It often allows conservatives to win the day, but only with low trickery and deceit. Depending on one’s normative views, and in particular one’s normative views relating to expressing truth, one’s intellectual values, one’s views on democracy, one may suppose that’s enough, the policy end justifies the rhetorical means. That’s beyond this tweet storm. However, I suspect some conservatives may be just as satisfied, or more, to argue their positions honestly, directly, forthrightly. They may take the easy path now because it’s there, they see it as benign, they don’t see another path, but they don’t actively prefer it. Viewing the essential problem as the generation or promotion of unnecessary confusion and conflict, inconsistent with one’s intellectual responsibilities and the democratic ethos, in pursuit of expressing certain normative views, let me say a few words about alternative paths.

One category of implicit normative views involves supporting or giving preferential treatment to existing or status quo beliefs, laws, values, arrangements relating to the definition, distribution, or use of economic power to resolve interpersonal conflicts of preferences. A better form of conservative economics would simply say that. “Our normative conclusions are based on existing, status quo, economic power arrangements, whatever they are.” It won’t pretend distributional indifference, restriction to “utility,” lack of ethical controversy, etc. People who perceive potential ethical issues with existing economic power arrangements would then know the theory is not really addressed to them, they will not benefit from studying it, nothing will be gained by engaging with it. Boundaries are drawn. Confusion dispelled. Similarly, people will not be tempted to use that normative argument to then ethically analyze, assess, evaluate the economic power arrangement accepted in that theory as givens, without evaluation, a comically circular argument one sometimes sees in law and bad economics.

Another category of implicit normative views involves the ethics of the distribution of economic power involving labor or capital markets, inheritance, taxes, etc. Some common ones involve marginal productivity, “merit” variously defined, human welfare, rights, fairness, etc. A better form of conservative economics would explicitly propose those ethical views. For example, “We attach normative significance to wages in labor markets because we think they reflect marginal productivity, which we find normatively dispositive for the following reasons …” One could then discuss what “productivity” in that sense means, how it’s defined, how it’s valued, how people come to have different amounts of it, how it relates to other common considerations relating to the distribution of economic power like “merit,” etc. Or if one were more interested in other distributional ethics one sees commonly lurking in the background, “merit” as effort or hard work and / or innate talent and capability, lottery of life and variety or excitement, human welfare, rights, etc., one could talk about those. The important point here is not what form of distributional ethics one may wish to promote but that one does it explicitly, as opposed to pretending distributional ethics are exogenous then ushering them in through the back door, so to speak.

Another category of implicit normative views involves the extent of the market, for example, the belief all interpersonal conflicts of preferences are most ethically resolved on the basis of economic power in markets, that the greater the reach of the market, the better. The ethical issue of the extent of the market is exogenous to neoclassical welfare economics because as a mechanism for resolving interpersonal conflicts of preferences, allocating scarce resources, it cannot be addressed using “utility” as defined in that theory. A better form of conservative economics would identify that as an explicit normative proposition that cannot be developed on the basis of “utility.” “We believe all interpersonal conflicts of preferences should be resolved on the basis of economic power in markets.” In that case, people could work out and discuss the implications, for example, “interpersonal conflicts of preferences about who should get the vaccine first should be resolved on the basis of economic power, not medical need.” One can evaluate, assess, discuss, agree or not.

Another category of implicit normative views involves one’s ethical responsibilities to other people when those other people express preferences that appear based in ignorance, irrationality, addiction, fear, psychological manipulation, etc. I’ve discussed before neoclassical welfare economics does not explicitly restrict the maximization of social “utility” as an ethical goal to situations when people are thinking right, but it’s usually evaluated in the Fairy Land with ciphers that do, so it’s a bit opaque. A better form of conservative economics would draw out and stress these contentious issues. For example, “Even if one cannot adequately explain to someone the apple they prefer to eat has been poisoned, one should not interfere.” People could then better understand and evaluate the rest of one’s normative argument or perspective, it’s about respecting the expression of choice, no matter how unfortunate, not someone’s “welfare,” etc. It doesn’t have to be on the sly, hidden, fudged, left studiously vague.

Anyone can follow the Path of Philosophy. It doesn’t require adopting certain normative or ethical views beyond intellectual sincerity and a commitment to the social exchange of one’s true values and ethical beliefs. Take the path. You’ll feel much better.

Methodological Individualism II

Can I take another look at what I understand as the “methodological individualism” critique of neoclassical welfare economics, or a part of that critique anyway, this week? I discussed it before, but it’s been a while, and I’m still thinking about it. I probably mentioned but for the longest time I couldn’t make heads or tails out of this critique. Focusing on the individual seems sensible enough for both social science and ethics. Individuals ultimately think, decide, do, maybe as a part of a group, maybe not. However, under the principle of sympathetic interpretation, sensible at least when one supposes one’s interlocutor sincere at all, I’ve kept thinking away, and now I think I might understand at least a part of what people have in mind in this area. The key for me involves an issue I call actors and roles, in this case, the distinction between the economist / observer and, on the one hand, the ciphers of the theoretical Fairy Land of Economic Theory, and on the other, real people. Also, a bit of the issue of the extent of the market. 

The Fairy Land is an interesting place because the interplay of normative propositions and factual premises is not always very clearly developed, as one might expect with armchair philosophy done by people who would rather obviously be doing something else. One notable feature of the Fairy Land I suppose I might never have noticed without thinking about this particular critique is that the ciphers don’t seem to have preferences relating to social ethics, equity, politics, economics, how to resolve interpersonal conflict, etc. If the ciphers themselves have preferences relating to social ethics to supplement or compete with those of the economist / observer, then, for example, the argument about the normative equivalence of all perfectly competitive, Pareto optimal markets seems to break down. We might attain such an ostensibly special market outcome only to find the preferences of all the ciphers imply it stinks on the grounds of, say, distributional ethics, and rank even some non-perfectly competitive, non-Pareto Optimal outcome superior to the one we attained. We might find the ciphers prefer to reject even the supposedly non-controversial ethical propositions about preferences in the absence of interpersonal conflict that serve as normative inputs to the argument relating to economically efficient, perfectly competitive outcomes. Indeed, the ciphers may well decide they prefer not resolving some or all interpersonal conflicts of preferences via economic power in markets, that is, they may have preference rankings relating to the extent of the market for some or all particular goods or services. And if we allow heterogeneity of the relevant ethical beliefs and preferences, well that’s a whole lot of interpersonal conflict of preferences, and a whole lot of implied indifference on the part of the economist / observer, right there. We can’t resolve interpersonal conflicts of preferences including about ethics on the basis of “utility.” So if interpersonal conflict is omnipresent with respect to the ethical or normative significance of any arrangement we might suggest, well ...

So how do we avoid the ciphers discussing social ethics, deciding on a forever temporary and contingent basis what they intend to do to create an ethical society? How do we prevent democracy breaking out in the Fairy Land? It would seem we could either arbitrarily limit what we allow the ciphers to have preferences about, or I suppose we could make some ad-hoc decision certain preferences can’t be expressed in terms of “utility,” although that seems a bit dodgy as far as terminology. If we just said something like, “We’re not going to allow the ciphers to discuss ethics or democracy in the Fairy Land, so while they might have preferences, they’re never going to express them, at least while I’m in charge,” it doesn’t make the preferences disappear. So the ciphers in the Fairy Land are presumably meant to be “individualistic” in the very specific sense they’re not meant to have preference rankings about things like the resolution of interpersonal conflict, ethics, fairness, equity, justice, human welfare, etc. Interestingly, that implies the ciphers have as an aspect of their own full ethical theory a feature of the ethical half-theory of the economist / observer designed to hold controversial ethical issues relevant to reality in abeyance. That’s weird, isn’t it? Conflation alert!

This again raises the question whether the normative argument and conclusions of neoclassical welfare economics are meant to apply only to, and be evaluated only in, an arbitrarily constructed Fairy Land populated by ciphers, or also reality. Let’s think about it. If we’re also talking about reality, real subjects and not just ciphers, we’d be talking about either a factual premise relating to the ethical views of the subjects, or an additional ethical proposition subjects should be amoral with respect to those exogenous ethical issues. As an ethical proposition, it would run afoul of the de gustibus non est disputandum principle, an element of the normative argument in neoclassical welfare economics that says the economist / observer is meant to not second guess the preferences of the subjects, tell them their ethics are wrong, for example. The perspective of neoclassical welfare economics involves economists and other observers looking in on society the way an entomologist studies a colony of ants. The observers are talking among themselves about ethics at one level, the subjects another. Don’t get it twisted. It would also make neoclassical welfare economics absurdly controversial. The proposition no one should care how interpersonal conflicts of preferences are resolved, the core of ethics in general, and the basis of human society, is controversial. As a factual premise it seems clearly false. Most people do, in fact, appear to have ethical preferences relating to the proper resolution of interpersonal conflicts of preferences, allocation of resources, etc., often quite strongly held ethical preferences. Some people exposed to neoclassical welfare economics may aspire to emulate the ciphers, may profess amorality in an apparent effort to merge the Fairy Land with reality, but not everyone, and even some of those falsely or insincerely. One can’t simply apply a normative or ethical argument meant for the Fairy Land to reality. One must address any exogenous ethical issues relevant to reality that were left out, and consider what happens when one eliminates any false factual premises. And when we say we must address the ethical issues left exogenous in the ethical half-theory of neoclassical welfare economics, we’re not talking just about observers who are not economists, or economists not wearing economist hats, but the subjects’ views as well, the relevance of their views, if any.

What does it all mean? Neoclassical welfare economics, in isolation, has little to say about reality. It’s about a severely attenuated, limited, artificial world. It must be revised and combined with exogenous normative content to be applied at all in realistic contexts. Neoclassical welfare economics as an intellectual artifact is not “wrong,” per se. As a sort of thought experiment, it says what it says. It can be useful to show the limits of a certain train of thought in ethics, to establish the significance of democratic government, etc. Real, limited, neoclassical welfare economics is very different in that respect from expansive bad economics in the conservative style, which pronounces definitively on all real world economic issues, ostensibly and risibly based only on neoclassical welfare economics. It’s also very different from so-called “general welfare analysis” involving mental gymnastics around “utility,” variously defined and manipulated, with all the confusion and paradox that exercise often entails, which can be similarly expansive, but sometimes less underhanded.