In Praise of Uncertainty?!

Tyler Cowen responds to a challenge from David Henderson and lists the policy questions that he is most uncertain about.

In the comment section some are expressing surprise and respect for Tyler's openness and non-dogmatism.

I want to make it perfectly clear that I have nothing but tremendous respect for Tyler and the quality of mind he possesses.  He is probably the closest thing to a genius I have closely interacted with among my contemporaries. Kenneth Boulding, Gordon Tullock and Jim Buchanan were my teachers, and Israel Kirzner was my mentor at NYU, Robert Conquest had the office next to mine and we spoke daily, and Vernon Smith was my colleague; and I did get to spend 2 weeks in close interaction with Robert Nozick once at a summer institute --- but none of these could be termed contemporaries, though I do believe they all exhibited the qualities of a true genius.  Tyler has a similar quality of mind --- though he is less focused than those guys (and perhaps that is at the end of the day a very important difference).

My first meeting with Tyler was at a distance --- he came down from Harvard to see Ludwig Lachmann give a seminar in early 1984.  The next day Tyler came into the office and there was an open desk in my office and Tyler sat in there waiting to meet with Rich Fink.  He was reading a novel and he was just turning the pages -- it turned out that was just the pace at which he read.  I was completely in awe.  And in some sense I still am in complete awe of him today.

But I also find some of his positions puzzling and frustrating.  This blog post is one of those instances.  Why?

For one, I think Tyler is being a bit disingenuous.  He doesn't really answer Henderson's challenge because in each of his answers he hints that he agrees with a certain general principle but uncertain about implementation issues.  What I would like him to clarify is where he would think libertarian/free market principles should be questioned.  Second, I would like him to clarify when the public choice qualifiers on implementation should be suspended and when they should be the main point of emphasis.  Third, I would like to know by what criteria he decides to not use market principles to implement market policies.  In other words, when is it the case that the transition to the market too important to be left to the market?

In contrast to Tyler, I tend to focus on the general principles of libertarianism and free market policy.  In fact, I find it frustrating when individuals try to say they are libertarians but they want to defend war and other government interventions.  Why not just say "I have libertarian sympathies, but I don't think they apply in this case.  Or, I used to be a libertarian, but now I am no longer persuaded by the libertarian argument."

I, on the other hand, find the utilitarian argument for libertarianism overwhelmingly persuasive and I find the moralistic reading of libertarian rights talk to be inspiring.  The hard questions are indeed in implementation, but the general principles are NOT for me uncertain.  Private property, freedom of trade, freedom of association, toleration and religious freedom, etc.  These are the goals that we strive to attain in practice, they should be the guide to our policy choices.  This is why I think Richard Epstein's Free Markets Under Seige is the best book on public policy in recent years ... for the simple reason that if we just pursued the low hanging fruit in public policy --- abolish price controls; eliminate trade restrictions; and open up market opportunities and introduce competition where there is currently privileged positions, etc.  If governments simply pursued the low hanging fruit in public policy, the lives of millions of individuals would be improved immensely.  The more complicated matters can be tackled later, not first.  What would Tyler disagree with in Epstein's presentation?  Is there uncertainty that African's would be better off if European agricultural policies were more free trade?  Is there uncertainty that rent controls in NYC cause problems in the housing market in the city?

So I remain committed to libertarian principles as outlined in works such as Mises's Liberalism and Rothbard's For a New Liberty.  I admit that there are hard cases, and there are problems of implementation.  But I don't see uncertainty on the general prinicples.  If that makes me dogmatic, well I would have to plead guilty --- I am dogmatic about what I am persuaded by reason and evidence to be the truth until that time when reason and evidence would persuade me to the opposite.  Perhaps I am deaf and blind, but I just haven't seen the evidence nor heard an argument that make me think that a free market economy and the decentralization of political power to the maximum would cause anything but great improvements in the lives of billions throughout the world.  Nothing uncertain about it, lets just move to it as quickly as we can!

Comments

[matthew mueller]

Great post. Let me just add a few thoughts.

Libertarianism, like classical socialism, is an ideology. It provides people with a coherent and exhaustive framework with which to view and understand the world. Much like the Marxist who opens up the newspaper to find repeated confirmations of class struggle, the libertarian can with confidence explain the causes of all social problems: government intervention. This is a very problematic approach to understanding. First of all, the solution, as Kirzner would say, "is implicit in the data." The libertarian has an answer even before the question is raised or problem addressed. But the social world is far too complicated for a single ideology to accomodate exhaustively the complexity of the real world.

Now Dr. Boettke would respond that he is concerned only with "general principles" that can be defended on the basis of reason and evidence alone. But take, for example, perhaps the most important tenet of libertarianism: private property. A common mistake I think is to assume that this idea can operate on an abstract level entirely above, and separated from, its social context. But the notion of private property in a "pre-institutional" world makes no sense whatsoever because an accurate description of this concept would involve references to social terms like markets, agents, opportunities, norms, rules, etc.

Additionally, borrowing from the work of Popper, I think the libertarian's time would be better spent trying to find cases in which his "comfortable" ideology could be potentially refuted or threatened. Popper would likely argue that the libertarian ideology has a better shot of advancing by "bold conjectures and critical refutations" rather than "by repeated attempts at confirmation." Finding instances that confirm one's theory is easy for the ideologue --- he does this in his sleep! What is more, according to Popper, IF libertarianism is held to be in principle irrefutable, then it necessarily sinks to the status of a pseudoscience, tantamount to astrology and snake charming. Ouch!

And the last paragraph of your post I found particularly charming. The dogmatic(of which you plead guilty)will of course not find instances in which either evidence or reason contradicts the "general principles" of their theory. Only the critically minded can engage meaningfully with their critics. The dogmatic and the critically minded are worlds apart.

And finally, I strongly believe that reason is fallible and evidence is artificial (or socially constructed). Now while these things may be useful in a very superficial sort of way, they will forever remain imperfect guides in assessing the relative merits of competing theories.

[John V]

Well said, I get the same frustration with Cowen at times. But being that I'm far from qualified to criticize him, I appreciate your stance and am glad to see that a PhD can still have conviction in his area of expertise without seeming like he's oversimplifying complexity.

I hope Dr. Cowen takes the time to answer you. Maybe you could corner him at lunch if he doesn't and share the exchange (ha!).

[John V]

Good comments, Matthew. I helps one step back and make sure he isn't missing the forest for the trees.

However, isn't it possible that by overcomplicating and obscuring the basics, something I suspect Peter thinks Tyler is doing, we lose sight of the easiest ways to make meaningful progress?

The part where Peter talks about the low hanging fruit should be a no brainer for any libertarian and maybe even most economists (you would think!).

Many complex problems are the aggregated results of many bad intervention...yes, yes I know, I sounding like an ideologue! But isn't this true, nonetheless??

Shouldn't we start by asserting the simplest things and move from there? If this is the wrong approach, then it would stand to reason that something else is at play that requires attention...like exploitation ala Marx, possibly?

Hmm. I doubt it.

[Peter Boettke]

Matthew,

If you can show me an instance where I am "deaf" or "blind" I will gladly change my views. But socialism didn't fail because of bad leaders, or because of foreign intervention, it failed because of a system that CANNOT work. Humanity didn't fail socialism, socialism failed humanity. It is not dogmatic to make that bold claim subject to refutation. In fact, that is what Popper's critical rationalism is all about --- bold claims subject to refutation. If you don't have any strong beliefs, you cannot make very bold claims!

As for less extremes --- do you know a good critique of Higgs' Crisis and Leviathan that I should read so I stop being concerned about government intervention? Do you have a good critique of the North/Thomas story (or the Eric Jones or Birdzell and Rosenberg or McCloskey) of the Rise of the West and the role of private property and freedom of contract? Do you know a really good critique of Friedman and then Lucas on the microfoundations of macroeconomics and the failure of traditional Keynesianism? Do you know an alternative explanation for the 1970s then the one offered by Chicago economists? Have you read a response to Doug Irwin's Against the Tide where he goes through all the arguments against free trade and shows how they fail? Is Gordon Tullock wrong about bureaucracies and Mancur Olson wrong about democracy and narrow vs encompassing interests? Is Stigler and Peltzman wrong about regulatory capture?

If you have an answer to these questions please share because then I can awake from my dogmatic slumber. But until then I choose to be a dumb economist --- who as I said before just believes what I read in the books and the journal articles of these and other economists.

As I have said before, science progresses from a Polanyi type commitment to certain propositions within a republic of science. One of the elements of the republic of science is the freedom of inquiry and critical engagement with peers. Dogmatism is not a problem at the individual level, but at the system level. That is what Popper was fighting against, as well as Polanyi ---- the dogmatism of the unwarranted intrusion of socialism into science. For Popper the battle was intellectual, for Polanyi the battle was institutional. Science was for them the ultimate metaphor of free inquiry, any attempt to squash that was to be fought.

Finally, you read into my comments an "asocial" and "institutionally antiseptic" position which is not there. I would challenge you to read any of my works (from my first published papers on institutions and institutional analysis in the late 1980s to my more recent work on development and entrepreneurship) where the heavy lifting intellectually is done through institutional context (not behavioral assumptions). You read into what I am writing what you know you already don't like and assume that is the position I hold. This is why it is hard for you to see a libertarian reading of North, or an anarcho-capitalism reading of Hayek. But it is precisely those creative readings that I am suggesting constitute the foundation of the bold conjecture I want to put forth. It is precisely the fact that I do those sort of things that gets me in hot water with some Austrians, and not on the radar screen of the ISNIE crowd. But it is what I consider to be useful in developing a framework of analysis that can 'track truth'.

Criticism is always healthy, but it is healthier when done immanently (not transcendent) and through the most charitable reading (not least). So criticize away --- but give me some empirical content to your criticism, and also make sure you state the position correctly that you are pecking away at. That, btw, is just something Popper would have demanded, and Polanyi would have insisted was the behavioral norm within the Republic of Science.

Pete

[G]

Prof Boettke mentions how intelligent Tyler is. Not knowing him other than his blog posts, I wouldn't know. However, I do feel compelled to point out that nearly every extremely intelligent person I've met was a socialist (although not in name). Intelligent people have ways of convincing themselves they are correct, and can often out-debate their adversaries. Its difficult for someone who thinks he is (and very well may be) more intelligent than his peers to believe things would be better if he were not in charge.

However, none of the extremely intelligent people I've met possessed the dispersed knowledge which lets modern society function. Few can even fulfill many roles in our specialized economy.

I guess what I'm saying is that the fatal conceit can strike the best of us.

matthew mueller, you say:
"...the libertarian can with confidence explain the causes of all social problems: government intervention."

As a libertarian and soon-to-be entrepreneur (which I will likely fail at; most do), I could not disagree more. There are many problems in the world, and the challenges presented to mankind by nature are far and away bigger than any government. Libertarianism is not an ideology which blames everything on the government, it is an ethic which asserts that voluntary cooperation is preferable to coercion. This ethic has had fantastic success in people's personal lives for reasons which become obvious to me when I started viewing the acceptance of an ethic as a praxeological exchange.

In a voluntary world, all problems become entrepreneurial ones. I cannot begin to describe the challenges many entrepreneurs face when they attempt to solve some problem, but most have nothing to do with government intervention. Sure, sometimes government gets in the way. But most of the time it isn't the limiting factor in progress.

Private property, in some form, is a requirement for any private action to take place. Its necessity can be directly derived from the axiom of action. Markets and formal rules are not needed.

I apologize for the long and likely flawed response. Having just watched The Last King of Scotland, I'm become more convinced that circumstances which force one person to be under the power of another to be disgusting; the quicker we can get rid of them, the better.

[Brian Pitt]

Matthew,

I agree with you to a certain degree about SOME libertarians viewing the government as the root of all social problems. But I do not think that's the case with Dr. Boettke. Now oversimplying arguments makes for bad scholarship. But what about overcomplication? Think about the tedium of Marx. For all of his insight into scholars viewing the economy in dynamic terms, his noteworthy discussions about the institutional "inability" of capitalism to discover surplus value, and his notion that economic interests always determine the social structure, for many - scholar and layperson alike - Marx exclusively provokes thoughts about the class struggle. And why? Because Marx, in his prolix style of presentation, chose to speak about economic phenomena using Hegelian terminology. Think about how that can spoil a legacy!

Also, your Winter reading list is probably pretty long. I will ask, however, that you think about the comments of John V., G., and Dr. Boettke. And, thereafter, closely read "Why Perestroika Failed." Not only is the book short (fewer than 200 pages), but it articulates Dr. Boettke's commitment to the Pure Logic of Choice, Economic Science, and the importance of Institutions. In short, I believe that you will come away with the idea that because one has a certain "ideology," it does not follow that he must follow a certain view of social problems.

[matthew mueller]

Thank you for all of the helpful replies. I have read through Boettke's response several times now and get the sense that he is writing in a state of indignant excitement. I did not mean to offend you or deliberately upset you; my apologies if I did. I did not mean to suggest in any way that you are "deaf", "blind" or "a dumb economist". As Brian Pitt pointed out as well, it would be helpful for me to actually read your published work. But in my defense, my replies are directed at the Boettke in blogs, not the Boettke in the academic world. I am commenting on your blog posts, not writing reviews of books and articles you wrote many years ago.

So let's get back to the topic. Let me respond to some things Boettke said. Yes, it is important to advance bold statements, but that is only a part of it. Popper, it must be remembered, held Albert Einstein in great esteem because his theory of relativity contained predictions that would lead to its own refutation. This is what science and critical rationalism is all about. It is not about advancing bold claims in the "republic of science" and saying to the rest "now refute it! ... if you can". A more productive research program would encourage students to develop theories that introduce questions leading to entirely new problems. No theory is ever settled. Higgs, Buchanan, Irwin, North/Thomas, and Friedman all said some very important things, but they do not have the last word on the subject. Popper's critical rationalism posits a world in which critical engagement leads not to scientific consensus, but to perpetual problem-solving. We recognize a problem and try to find solutions that eliminate the errors. In the process of doing this, new problems will arise causing the "scientists" to search for new solutions, and on and on. All of the writers you listed did just this: they corrected errors. But this does NOT settle the issues of the initial problems; it only creates new problems.

[G]

Mathew,

Einstein's genius was recognized during his lifetime, and his theory of relativity was accepted (or at least accepted as much as a Popperian scientist can accept anything; I'm sure you get my meaning). Einstein's environment of the natural sciences seem to be much more receptive to problem-solving than the social sciences seem to be.

There is no simple way to falsify a theory in the social sciences. For this reason, the social sciences seem to move much slower than the natural sciences. The experiment of communism, for example, has still not been falsified in the eyes of some. Keynesism also seems to have been a long detour on the road to economic truth. I don't think it is at all prudent for Dr. Boettke or other economists to attempt to solve the questions which arise from their solutions before anyone has started to pay attention to the solutions in the first place. Wouldn't that be a bit like Einstein questioning the applicability of his theory at the sub-atomic level before his general relativity had been recognized?

Mises of course believed praxeology was an answer to the lack of falsifiability in economics. But if praxeology is to social sciences what mathematics is to physics, you'd never know it by talking to an economist.

[Peter Boettke]

Matthew,

First, I would suggest that you look seriously at the Hayekian interpretation of Popper for the social sciences. It is about falsifibility in principle, but there are also some propositions (in the network of propositions constituting an argument) that are not up for questioning as they have been more or less settled. This is, of course, what I was getting at the other day when I referred to Duhem-Quinne position. But forget that. Just look at Hayek's writings in Studies and New Studies, and Bruce Caldwell's Journal of Economic Literature pieces on Popper and also on Hayek. Caldwell's Hayek's Challenge is also recommended.

Second, on Einstein - Popper's depiction is countered in Polanyi's Personal Knowledge. Also, when Einstein took the position at the Institute for Advanced Study he was asked how he could do so since they didn't have any labs, and supposedly he pointed to the pencil in his pocket and said "This is the only lab I have ever needed." Enstein as a Misesian!!! Only kidding, well sort of.

I am all for criticism --- both self-critical attitude and more importantly from peers. It is how knowledge is gained and science progresses. I am with you. The most exciting people I have ever met in my intellectual life are what I term life time learners. We should all strive to be lifetime learners, and I hope I encourage that and exhibit that behavior. If I am giving you the wrong impression on that shame on me.

But I asked you a set of specific questions about SUBSTANTIVE CRITICISMS of the positions that I was holding versus Cowen's 'uncertainty' and I have yet to hear the evidence or argument that should persuade me to be more tempered in my endorsement of libertarianism. I am a researcher and writers in economics and political economy so of course I realize that there is no settled positions in the social sciences (as did Mises, btw, who said that scientific thought was by definition imperfect and that all we can continually do is submit our work to the critical evaluation by peers).

Nobody is claiming to be immune from criticism here, but I am asking for substantive criticisms. Philosophy cannot answer empirical questions, empirical assessment is what is called for. What is the alternative explanation of the phenomena under question, and what evidence supports that explanation as opposed to competing ones?

Real critical engagement in science requires getting down and dirty in argument, not continued reflection on the nature of critical rationalism.

Finally, I do not expect you to read my work. But I think it might be helpful if you checked your premises. You have a particular understanding of what Austrians believe and you have some criticisms of it. I think your understanding (while very common) is actually WRONG --- both on method and methodology. The references I have provided are mostly focused on getting you to see the alternative reading in Austrianism from within the classics themselves. I have failed to persuade you on this point.

But I think you are guilty as well of reading uncharitably --- e.g., the Kirzner quote about conclusions implied in the premises.

I am very impressed with the amount you have read and the thoughtfulness with which you considered some very complicated questions. As I said, I think you should get yourself a PhD and quick and get to the business of writing, etc.

Pete

[Jason Briggeman]

This isn't going to be very closely argued, because it's a flipping blog comment, but hopefully at least Pete (having read a little of my actual work) will have some sense of what I'm trying to say.

I don't see policies -- *enforced* policies -- as being objects of choice; they are outcomes of complicated macrosociological phenomena. (I am, of course, here influenced by Wagner.) And we don't understand those macrosociological phenomena very well. What if the same process that creates or created our understanding of property is the same process by which government (whatever it is) is created? In that instance, libertarianism could be a badly flawed ideology. Cowen once wrote a paper dealing with the nature of government in which he (understandably) found himself unable to specify a definition of "government" -- but unlike many writers in the area, he was up front about that. I imagine that when he writes on politics he is simply incorporating his uncertainty about these macrosociological phenomena into his worldview.

And then, I find so many "public choice qualifiers on implementation" that I think they are pretty much the whole game, unfortunately or not. We do not currently understand, in the context of political competition, how to get an outcome where libertarian policies end up being enforced. I'm skeptical whether, in a mass democracy setting, advocacy of libertarian laws can lead to society-wide enforcement of libertarian policies...it doesn't seem to be enough. Has a mass democracy ever voted its way to liberty? I don't know of any. We should know that to expect successful contemporary American politicians to enforce libertarian policy is to be terribly naive. Maybe to advocate libertarian policy *choice* (i.e., libertarian lawmaking by politicians) in a mass democracy is also to suffer an illusion about how easy it is ("Just Choose It"?) to get libertarian policy *outcomes*. Maybe we are many small steps away from the point where democratically elected politicians could write and enforce libertarian laws, possibly because that can only come when these underlying macrosociological phenomena are in the right place. Maybe you get those phenomena in place by doing things that aren't advocacy of libertarian policy choice, or that aren't even morally consonant with libertarianism or the Golden Rule. And if that were the case, of course, we would have to ask ourselves whether those things are worth doing -- and if you decide they aren't...or even if you decide they are?!...you're not purely libertarian anymore.

[G]

Jason,

The lack of libertarianism in politics has never surprised me at all. The incentives of power do not reward voluntary cooperation. Why ask when you can order? Democracy gives everyone a little bit of power over everyone else; to me, that doesn't seem conductive to a libertarian ethic. In order to elect libertarian politicians, voters must overcome a prisoner's dilemma, where each individual's incentive is always to try to grab more power for him or her self. This is assuming individual voters even understand how freer markets could improve their lives (most don't). I see the problems as ones of education and coordination. I believe liberty is a "commons" which is often trampled upon.

Re: property. Exclusive control over property is fundamental to action itself. It seems like a stretch to me to suggest that the unknown macrosociological mechanisms which created our current society are the same as the ones which have created property rights.

[Brian Pitt]

"It seems like a stretch to me to suggest that the unknown macro-sociological mechanisms which created our current society are the same as the ones which have created property rights."

G, do you agree that the macro-sociological phenomenon "capitalism" (i.e., a rational socio-economic system characterized by indirect exchange, credit, and private ownership of the means of production) rationalizes medical technique, industrial methods, civil law, and monetary systems? If you do, then there is no reason not to agree that capitalism does not rationalize traditions, religious beliefs, and ultimately public policy. These are macro-sociological phenomena.

At the risk of sounding too simplistic, what generally happens to many is that they come to "take for granted" what gives rise to their standard of living (i.e., private property, risk taking entreprenuership, the rule of law, law enforcement, easy taxation, etc.). And, as part of their taking their living standards for granted, they come to believe that society itself can be "rationalized." Then comes the propaganda about economic equality, and calls for government action to ensure economic equality. This explains the unflinching hostility towards the market in nearly all sectors of society. Moreover, this reduction of prestige of the market gives rise to (macrosociological) legislation directed toward two opposing mechanisms: equality of economic resources and enforcement of private property.

[Jason Briggeman]

Cowen today blogs a list of things he is nearly certain about. I can't help but point out his #2:

"We cannot do economic policy as we might arrange pieces on a chessboard. What you ask for is rarely what you get, and your recommendations had better be prepared for this discrepancy."

[Peter Boettke]

Jason,

I agree with Tyler's #2, but I think it also "blows up" about 90% of all policy recommendations which are not 'robust' to this criticism.

I also would agree with more of the others. But I think the implications of these would push one toward the general sentiments of my original post.

Creating a framework for rules of just conduct are far different than trying to arrange the pieces on a chessboard.

Pete