Thursday, January 15, 2009

A non-economist's view

Brad DeLong's "economist's view" of Liberalism and Libertarianism starts like this (emphasis added):

Let me give you what I take to be an American card-carrying modern liberal economist’s take on classical liberalism--which I think is broadly an updated version of Adam Smith's take. It is, in short, that modern liberal economists are wanderers who have been expelled from the garden of classical liberalism by the angel of history and reality with his flaming sword...

It starts with an observation that we are all somewhat more interdependent than classical liberalism allows. It is not completely true that it is from the self-interest and not the benevolence of the butcher that we expect our meat. Self-interest, yes, but benevolence too: a truly self-interested butcher would not trade you his meat for your money but instead slaughter you and sell you as long pig. So this opens up a gap between the libertarian view and the world.
That's silly on several levels. The first is just a logical failure: if the butcher's self-interest were really best served by converting his customers into meat, to whom would he sell the meat? At what point would his self-interest be better served by selling rather than slaughtering? If DeLong's premise is granted, there would come a time, at least periodically, when the butcher's self interest would lie in supplying the fruit of his macabre labour to paying customers, assuming they'd buy long pig. If not, the butcher's self interest would have been better served from the start by simply sticking to the conventional meats.

Even trying to discuss this as though it were a serious argument is ridiculous.

There's a big and widespread fallacy underlying DeLong's argument - the idea that it might be in the self interest of anyone, except perhaps a tiny minority of powerfully-built psychopaths, to live in a world where you might be butchered when you went shopping. The purely pragmatic principle of reciprocity means that if we wish not to be butchered ourselves, we should not butcher others. This isn't a benevolent impulse, it's entirely selfish.

In fact, most people are deeply concerned to live in a peaceful environment. We pay taxes willingly for policing, complaining only that the policing isn't effective enough. We are generally happy to pay for military defence, though often less so for offence. The "we" in those sentences includes classical liberals and libertarians. Even those who would privatise policing and form a militia themselves want to see these functions performed.

Among the few legitimate activities that libertarians allow the state are the preservation of peace at home and the protection of citizens from attack from elsewhere. If a long pig butcher were to set up shop in a libertarian society, he would be one of the few people on whom the full weight of the law would fall.

Adam Smith's famous idea about the butcher, benevolence and self interest survives DeLong's assault.

There's more in the linked-to argument. It suggests that liberal economists were "mugged by reality" and changed their views, and it iterates some of the ways this has happened. These are all debatable but let's keep this brief. Liberal economists would disagree with all or part of the arguments put forward and they have, of course, remained vocal. Milton Friedman is an obvious example, as are Hayek and von Mises, and the blogosphere is full of the sound of liberal voices. If they have been in the minority, that is not necessarily a reflection on the worth of their views.

What has happened, though, is that people who are not liberal - DeLong, for example - have taken to applying the label to themselves, for some strange reason.

That is not an argument against the liberal position.


Anonymous said...

"Silly" is too kind; if a schoolboy advanced that argument you'd conclude that he was both stupid and, perhaps, suffering from an unpleasant character defect that might bear investigation. When it is advanced by a roly-poly economist in middle age, you really scratch your head. Perhaps it's kinder to assume that the argument was not advanced in good faith. I dunno; it's all very odd.

Peter Risdon said...

I deleted several words before finally writing "silly".

Anonymous said...

Still, it serves to remind us that not only is most Economics just footnotes to Smith, but also that Smith was untypical of Economists by being a decent fellow.

Anonymous said...

While people like Sweeney Todd are rare, it undoubtably is the case that there are plenty of unscrupulous businessmen woh are out to get as much for themselves as they can even if it harms others and society in general.

Patent trolls being a good example.

Anonymous said...

There is another argument against DeLong. That is the rule of law. It's as simple as this: There are laws against murder.

Economists, from Adam Smith on, usually mention this only once if at all, because they don't care to wrap it into every statement. You pursue your interest within the rule of law.

Anonymous said...

Patent trolls being a good example.

Heh, heh - did you watch "Hustle" last night?

Peter Risdon said...

Patent trolls - true. But they are preoccupied with stealing a market rather than trading within it. Corporations meant "The Mayor and Corporation" more than "business entity" to Smith, but he did realise that when one or more of their members meet, they conspire to defraud the public.