Conservatism Two Ways

The rhetoric of anti-democracy bad economics in the conservative style straddles and harnesses two strands of conservative thought: conservative socialism and conservative egoism. However, it doesn’t do it properly but falsely as a sort of grift. Let’s discuss that this week.

May we revisit the 18th century for just a moment? Wigs, clay pipes, breeches, that sort of thing? Why not? Fine. A popular theological and philosophical movement of the day was Deism, which sought to establish the beneficent nature of, basically, nature, including human nature. The basic idea was the good lord had carefully engineered the world for the benefit of mankind, and if one thought, for a moment, some element of nature wasn’t as beneficial as all that, the challenge was to show how, no, actually it was, once one truly understood how it was meant to work. It was this creed, characterized to humorous effect by Voltaire in the character Pangloss, that motivated and informed early economist / moral philosopher / theologian Adam Smith, who struggled to show how greed and egoism were beneficial to mankind, if we could create the proper context.

Flash forward to the early 19th century and we have the classical economists, who by then had taken Mr. Smith’s careful but rather fanciful ideas and simplified them by taking out not only the divine but also nuance, context. In their theory, greed and egoism increased the welfare of all.

Flash forward to the late 19th century / early 20th century and classical economics was increasingly criticized as clearly flawed. In response, economists developed “neoclassical” economics, an artful bit of rhetoric designed to maintain the conclusions of classical economics via clever word play. To be specific, they took concepts like “utility,” “welfare,” “efficiency,” “socially optimal,” previously social-based concepts typical of classical economics and increasingly untenable within that system, and redefined them to refer to individuals only, taking out interpersonal, social concerns. This rhetorical sleight of hand, or let’s just say grift, solved the practical problem of how economics could continue to promote certain conservative normative views on economic power, allocation of resources, in the face of withering criticism. However, it came at a price. The falseness and unreality of the project created two types of “conservatism.” 

One was what one might call “conservative socialism” (to avoid less relevant here “social conservatism”), which focused on what was ostensibly best for society, the individual’s responsibilities in that area. That is the strain of conservatism that was successfully captured by fascists in Europe during the run up to WWII. Their rhetoric was all about what was best for society, the people, even if in reality their policies were rather more about what was best for the wealthy establishment elite. Because of local conditions, fascist rhetoricians were unable to maintain the 18th and 19th century unity of conservative egoism and conservative socialism in classical and neoclassical economics. They also supported conservative values on economic power, property, markets, but differently. Their justification was all about supposed natural differences in the component individuals that formed society in which some, the economic establishment elite, rich people, their friends in the Nazi Party elite, were meant to be superior and more important than others, but all had a proper place.

The other branch of “conservatism” was conservative egoism, which latched onto the supposed significance of egoism and greed rather than the laudable social outcomes meant to follow. They upheld neoclassical welfare economics and associated anti-democracy bad economics in the conservative style. Conservative egoists, understanding the misleading rhetorical nature of normative neoclassical economics, were all too happy to continue to profess concern for society, utility, welfare, social optimality, all that, understanding implicitly it was all now fakery and not to be taken literally. At the same time, expressing the true normative or ethical values promoted by bad economics in the conservative style, conservative egoists were also happy to sometimes lambaste, repudiate any concern for social welfare, caring about other people, one’s society, the nation, ethics, morality.

Because of the correspondence of the real underlying normative values of conservative socialists and conservative egoists, if not always of their rhetoric, they got along quite well. American conservative egoists back then were soft on European fascism, supposed it quite good for business. But a grand conservative axis wasn’t in the cards. To the Nazis’ surprise, the USA joined forced with communist USSR to end fascism in Europe. Conservatives were thwarted, for the moment. It was an age of increasing liberalism, New Deal policies, social welfare policies and regulations, all that. 

However, the ensuing struggle against anti-democracy communism provided US conservative egoists with new rhetorical opportunities. They would play up anti-social egoism and their rejection of social welfare state thinking to equate the latter with communism, then democracy, then fascism. Conservatives’ sometime egoism and opposition to welfare state thinking was the basis of US conservative rhetoricians proposing their vision of conservative, right wing, authoritarian government was not fascism and risibly proposing instead fascism was in fact a liberal or leftist creed. At the same time, they famously upheld the misleading social welfare arguments of neoclassical welfare economics as seen through the lens of bad economics in the conservative style, promoted their economic ideas as best for everyone, America, society in general.

And that’s basically our context today. Some US conservatives talk about what they suppose is best for everyone, America, the nation. Others emphatically reject that sort of thinking entirely as socialistic, leftist, welfare state thinking. Others talk from both sides of their mouths. Neoclassical welfare economics abides, as does anti-democracy bad economics in the conservative style and assorted sequelae. It’s all a grift now, but possibly accepted by some as real, not only by the obvious marks but even by some innocent minds in academic economics, themselves played by others. Voters victimized by conservative grifters don’t know which way is up. They dutifully ape the language of market utopianism, conservative socialism, conservative egoism, but one suspects some have doubts. Yet they fear and loathe alternatives, seem to prefer wallowing in delusion and self-harm. In this sad, false, poisoned environment, voters may laud any populist gas bag, no matter how crackpot and disproven by history the ideas involved: fascism, anarchism, theocratism, communism. The people don’t seem able to grasp or consider the real issues in economics, politics, or philosophy. 

We have work to do. We must address anti-democracy bad economics in the conservative style and sequelae as “Austrian” economics, fake anarchism / “libertarianism.” We must clarify the real meaning and limitations of neoclassical welfare economics. It’s time to wake the hell up and get real.

Methodological Individualism

Ready for more real economics? Ever hear of the “methodological individualism” critique of neoclassical economics? I struggled to make heads or tails of it for some time, but I think I get it now, or part of it, anyway. Want to hear my take? Fine. I’ll tell it. 

Let me mention first why I couldn’t make heads or tails of it for some time. The word “methodological” made me think it was mostly about positive economics, the false but simple engineering models of neoclassical economics that ostensibly allow one to predict economic events. I didn’t understand the critique because in that positive context there is no presumption any particular element of an engineering model is real or true or factual. It’s not a description of reality, nor is it accretive or accumulative science eschewing elements known to be factually false. As far as I know, anything may appear in false but simple engineering models. If we’re going with assumptions like perfect knowledge, perfect rationality, who cares if it’s based on individuals in isolation? Criticisms of it seemed to me taking the conceit of economics as science far too literally. However, it eventually dawned on me both positive and normative economics have methods and methodologies, and the critique may involve the methods of normative economics and ethical philosophy rather more than the methods of predictive engineering models or of accretive scientific inquiry. Sure enough, I found that if I thought of the “methodological individualism” critique as a critique of the method used in normative economics, neoclassical welfare economics in particular, it made rather more sense. Let’s discuss why.

The ethical argument in modern normative neoclassical welfare economics concerns the preference ranks of individuals. These preference ranks are meant to be not questioned within the ethical half-framework of neoclassical welfare economics: people just prefer what they prefer. However, although one may find discussions of individual preference ranks over apples, oranges, widgets, what have you, in neoclassical welfare economics, one doesn’t find discussion of individual preference ranks over interpersonal ethics, equity, economic and political systems, etc. Why do you suppose the ciphers of economic theory are restricted in that way? I mean, real people have preferences relating to those things, surely, and one supposes associated preference ranks, and we could talk oddly and express those individual preference ranks in terms of “utility.” Nothing jumps out at me from the definition of preferences; however, I can think of some practical reasons, for example, economists want to present themselves as arbiters of the normative or ethical issues relating to political and economic systems, arrangements, outcomes. Obviously, things get a bit awkward if economists, looking down from above, busy themselves telling everyone what sort of economic arrangements are normatively optimal if at the same time the ciphers themselves have preferences over those same issues which are not to be challenged by economists. Indeed, the entire argument in neoclassical welfare economies begins to break down if the ciphers have preferences over resolving interpersonal ethics, allocating resources, reintroducing the very ethical issues at that level economists are supposedly making exogenous, setting aside at their level. Everything works out much better if the ciphers meant to represent people in the ethical theory of neoclassical welfare economics are simply conveniently considered to have no preferences about interpersonal ethics, fairness, justness, equity, aping what economists are meant to be doing.

But what are we to make of an ethical theory involving not real people under real conditions, but arbitrarily restricted ciphers in a fairy land of fanciful assumption? The purported significance in reality of the ethical argument presented in normative neoclassical welfare economics is unclear. Is the argument people should not, in fact, have preferences about interpersonal ethics? They should strive as a point of ethics to imitate the ciphers of economic theory? So neoclassical welfare economics, rather than an ethical half-theory is an ethical full theory opposing interpersonal ethics? Rather than viewing exogenous interpersonal ethics, equity, resolution of interpersonal conflicts of preferences, allocation of resources, as something that must be added to get normative conclusions, they’re viewed as something that must be kept out to get normative conclusions? Is the point of the normative argument in neoclassical welfare arguments the only normative, ethical issues that matter are intrapersonal, and interpersonal issues as justice, fairness, equity, welfare, the resolution of interpersonal conflicts of preferences as say over resources, are irrelevant? I would suggest that interpretation is bad economics. It’s not real neoclassical welfare economics. It’s a purposeful, rhetorical, misleading misinterpretation of it that, frankly, doesn’t pass the laugh test. Everyone wants an ethically justifiable society including interpersonal ethics. Once one gets one’s head out of the lazy positive engineering model of anything goes because it can all be false anyway, and into the rigor of concepts, language, factual premises required for serious ethical arguments applicable to reality, the situation suddenly becomes more rather more complex.

Conclusion for today? Just be aware of the sort of rhetorical stratagems, omissions, logical lacunae, neoclassical welfare economics and even more so anti-democracy bad economics in the conservative style rely upon for effect. It’s just one example among many, but an interesting one.