Aug 012007

It is a cherished belief, in all Objectivist as well as certain fellow-traveling circles, that economic interventionism must collapse under its own weight. Here, for instance, is Ludwig von Mises, in Planned Chaos:

Many advocates of interventionism are bewildered when one tells them that in recommending interventionism they themselves are fostering antidemocratic and dictatorial tendencies and the establishment of totalitarian socialism. …

What these people fail to realize is that the various measures they suggest are not capable of bringing about the beneficial results aimed at. On the contrary they produce a state of affairs which from the point of view of their advocates is worse than the previous state which they were designed to alter. If the government, faced with this failure of its first intervention, is not prepared to undo its interference with the market and to return to a free economy, it must add to its first measure more and more regulations and restrictions. Proceeding step by step on this way it finally reaches a point in which all economic freedom of individuals has disappeared. Then socialism of the German pattern, the Zwangswirtschaft of the Nazis, emerges.

Mises has just asserted, on the previous page, that for interventionists “the main thing is not to improve the conditions of the masses, but to harm the entrepreneurs and capitalists.” If this is true, it puts his claim that interventionism produces “a state of affairs which from the point of view of [its] advocates is worse than the previous state” in doubt. But what really interests me is the slippery-slope argument that interventionism inherently leads to socialism.

The example Mises chooses to support this thesis is price controls. The government begins by controlling the price of milk. The supply of milk declines, as the marginal producers are driven out of business. This is not what the government wants at all; so it continues by controlling the prices of the factors of milk production. The logic repeats itself a few more times, until we arrive at socialism of the German pattern. Mises, being no mean economist, points out that the government could guarantee milk for poor children more effectively by buying it at the market price and giving it away or selling it at a loss. The populace pays for this in taxes, of course, and you might end up with a black market in milk, but it surely beats price controls. Yet this policy is interventionism, just as price controls are. Does socialism emerge in either case? Or do only particularly stupid forms of interventionism produce the slippery slope?

The Objectivists, as is their wont, go a good deal further. Only Objectivism itself can halt the long, slow slide of the mixed economy into slavery. The go-to guy for over-the-top Objectivist pronouncements is not Ayn Rand herself but her “intellectual heir,” Leonard Peikoff. His book The Ominous Parallels is notable as the only work of German historiography ever written by someone who cannot read German. It also contains this gem:

No one can predict the form or timing of the catastrophe that will befall this country if our direction is not changed. No one can know what concatenation of crises, in what progression of steps and across what interval of years, would finally break the nation’s spirit and system of government. No one can know whether such a breakdown would lead to an American dictatorship directly — or indirectly, after a civil war and/or foreign war and/or protracted Dark Ages of primitive roving gangs.

What one can know is only this much: the end result of the country’s present course is some kind of dictatorship; and the cultural-political signs for many years now have been pointing increasingly to one kind in particular. The signs have been pointing to an American form of Nazism. …

There is only one antidote to today’s trend: a new, pro-reason philosophy.

This new pro-reason philosophy, of course, would be Objectivism. Now I think we can agree that in the twenty-five years since this passage was written two things have not happened. Objectivism has not swept the country, and American-style Nazis have not taken over the government. (Anyone who thinks the Bush gang counts needs to acquaint himself with the real Nazis.)

We have had approximately steady-state interventionism in the United States for a long time. Federal spending has hovered around 20% of GDP since the Second World War — no matter who was President, no matter which party controlled Congress, no matter what. Naturally there has been a great deal of expensive tinkering. The airlines are regulated, then deregulated. Savings and loans are encouraged, through insurance, to invest in risky propositions and then, after they lose hundreds of billions, enjoined from doing so. Liberty advances, when the draft is eliminated; and retreats, when the state sponsors offshore torture and suspends habeas corpus for citizens who are classified as “enemy combatants.” On the one hand the Fairness Doctrine is scrapped. On the other Draconian regulations are imposed in quasi-public spaces like offices, stores, and restaurants. To call these changes marginal would be an exaggeration; to call them a lurch toward fascism would be absurd.

Peikoff hastens to say that neither he nor anyone else can predict “the form or timing” of the coming dictatorship. Mises, similarly, disassociates himself from historical determinism, saying that the socialist tide can be stemmed with “common sense and moral courage,” which does not appear to be in any greater supply now than it was then. Their belief, in other words, commits them to nothing whatever. Barring an unlikely sudden upsurge of Objectivism, common sense, or moral courage, Peikoff and Mises are, epistemologically, on all fours with Christians who await the Rapture.

As Eliezer Yudkowsky puts the matter:

The rationalist virtue of empiricism consists of constantly asking which experiences our beliefs predict — or better yet, prohibit. Do you believe that phlogiston is the cause of fire? Then what do you expect to see happen, because of that? Do you believe that Wulky Wulkinsen is a post-utopian? Then what do you expect to see because of that? No, not “colonial alienation”; what experience will happen to you? Do you believe that if a tree falls in the forest, and no one hears it, it still makes a sound? Then what experience must therefore befall you?

It is even better to ask: what experience must not happen to me? Do you believe that elan vital explains the mysterious aliveness of living beings? Then what does this belief not allow to happen — what would definitely falsify this belief? A null answer means that your belief does not constrain experience; it permits anything to happen to you. It floats.

When you argue a seemingly factual question, always keep in mind which difference of anticipation you are arguing about. If you can’t find the difference of anticipation, you’re probably arguing about labels in your belief network — or even worse, floating beliefs, barnacles on your network. If you don’t know what experiences are implied by Wulky Wilkinsen being a post-utopian, you can go on arguing about it forever. (You can also publish papers about it forever.)

Above all, don’t ask what to believe — ask what to anticipate. Every question of belief should flow from a question of anticipation, and that question of anticipation should be the center of the inquiry. Every guess of belief should begin by flowing to a specific guess of anticipation, and should continue to pay rent in future anticipations. If a belief turns deadbeat, evict it.

Consider this an eviction notice.

  20 Responses to “Rent’s Due”

  1. There are strong and weak forms of the “road to serfdom” thesis — Peikoff commits himself to the strong form, but Mises and Hayek tended to waffle back and forth between the two. The strong form has been rightly skewered by you and others, but the weak form is demonstrably validated by historical experience: When a political body starts intervening in people’s lives, perverse results usually ensue, which presents policymakers with the choice of either interfering all the more thoroughly and forcefully or seeing the errors of their ways and letting go.

    Which one it does will depend on a mix of things like the prevailing political zeitgeist, the presence of loud and articulate voices of reason like Milton Friedman telling them what they’re doing wrong, and (perhaps most importantly) whether they’ve been rapped hard enough on the knuckles by experience that they’re willing to try something radical like following good economic sense. The dawning of the Paul Volcker era at the Fed is an example that was made possible by a confluence of all three factors.

    What seems so risible about the strong form of the road to serfdom thesis is that elides the difference between saying “if you do this, it’s really going to hurt” and saying “you’re probably going to do this and it’s going to hurt”. But the very act of telling someone that can make it less likely to happen, so it’s inherently self-defeating.

  2. Funny thing, it seems like you are advocating a test similar Popper’s. Just saying isn’t the test here a version of falsifiability?

  3. Matt: It is true that the logic of economic interventionism promotes more interventionism. But real-world policy is not erected logically. Policy-makers don’t necessarily follow their own logic or see the error of their ways, and in practice, as the recent history of this country indicates, they do neither. This is a weakness of the “weak” as well as the “strong” form of the “road to serfdom.”

    Peikoff, luckily, doesn’t have to worry about defeating his own argument this way, since I am quite sure he has never persuaded anyone of anything he didn’t believe already.

    Cato: Not quite. Yudkowsky is saying that if you hold a belief, of any kind, and it in no way influences your other beliefs or your behavior, then it’s floating and not paying rent. An example might make the distinction clear. In the movie Evan Almighty, God (Morgan Freeman, as usual) tells the hero to build an ark because the flood is coming. He builds the ark. His belief is paying rent for sure, because it influences his behavior; he anticipates the future differently. This somewhat resembles falsifiability; but Popper would not regard Evan’s belief as a scientific hypothesis, nor would he regard waiting for the Flood as a suitable test.

  4. Just for the record: what exactly is being “evicted,” Hatch?

    Neither Rand nor Peikoff ever made the Hayek argument. In addition, America has been already been positively affected by the Mises-Rand crowd to some extent — and they never claimed the need to “take over,” either.

    btw: when did YOU ever officially sign-on to Objectivism — much less its view of history — I missed that.

    btw #2: what “Objectivist” claims America or Bush are already Nazi?

    Still wondering what the hell you’re going on about…

    Oh, and Peikoff has personally convinced me (and others I know) of many things I didn’t “already believe” — list available upon request.

  5. We are evicting any floating belief, anything that implies nothing and commits you to nothing. The “road to serfdom” is such a belief.

    Peikoff, whatever his deficiencies, does not mince words. The second paragraph of the passage I quoted says that America will become a dictatorship in the absence of Objectivism. You will search Hayek in vain for a clearer illustration of the “road to serfdom.”

    If you want to argue that it is thanks to more “common sense,” “moral courage,” and, of course, Objectivism, that we have avoided dictatorial socialism until now, help yourself. As for me, I have no idea if that’s true. I don’t know how to tell, even hypothetically, if it’s true. If it were true it would not constrain experience in any way. In other words, it’s not paying rent.

    My parenthetical about Bush and Nazis was not addressed to Objectivists, but to anyone who might question the obvious fact that Nazis have not taken over in America and have no prospects of doing so. I am quite sure no Objectivist would equate Bush with the Nazis, but others might.

    I withdraw, on your word, my remark that Peikoff never convinced anyone of anything. But his style is certainly geared toward the choir.

  6. Not ~ a shred ~ more than yours is, good sir.

    And, if by “floating” you mean “abstract” or “conceptual,” then your methodology has taken a great leap backwards.

    Objectivism’s theory of history is no more difficult to grasp than — and just as easily demonstrable as — the theory of natural selection.


  7. It must be nice to have a choir, but since I don’t, I would have trouble gearing my style to it.

    More seriously, I sometimes wonder if you read what I write. I made it perfectly clear what I mean by “floating,” both in the original post and the comment. A “floating” belief is one that in no way constrains your experience or any anticipation of reality — for instance, “the road to serfdom,” or the Objectivist theory of history, if you prefer. An example of an abstract belief that is not floating is, “everything in the world is composed of atoms.” Or if you prefer something non-scientific, “it is wrong to steal.” Both of these constrain experience, as the road to serfdom does not.

  8. I will need to understand what you mean by “constrains experience” or “anticipates reality,” then. The Objectivist theory of history is just as empirical and descriptive as the theory of natural selection. For a student of history, such as myself, its explanatory power is overwhelming. It has helped me to “anticipate” too many of my later factual discoveries — while overcoming my initial skepticism in other cases — to be anything less in my own mind. So, I still don’t see what you regard as “floating” about it.

  9. We can spare my long-suffering tiny remnant of a readership a windy discourse on “the Objectivist theory of history.” What I want to know is less abstruse.

    In 1982 Peikoff wrote that the United States was drifting into Nazism and would eventually arrive at “some kind of dictatorship” — barring the accession of Objectivism. It’s 2007. There has been no such accession, there is no dictatorship, and there’s not even much of a “drift” toward one. My questions are: Has the coming dictatorship simply not yet arrived, or has Objectivism acceded without my noticing? Is there a third explanation that he does not mention in the passage that I quote? Or was Peikoff wrong? If not, and if America blunders along approximately as it has for the next hundred years, will that demonstrate that Peikoff was wrong? If not, can any set of facts demonstrate that Peikoff was wrong?

  10. My brief replies, I hope, were no “windy discourse,” but only an indication of the absurdly out-of-hand dismissal you give the subject.

    And, as you pointed out, Peikoff was not committed to any timetable.

    Moreover, your observation is simply false. America had been heading in fascist direction for many decades prior to the publication of Peikoff’s work. Although economic policy is somewhat better — thanks, in part, to the Mises-Rand crowd, AFTER the publication of OP — and the pace of economic fascism has slowed in consequence — this is still the dominant direction.

    But, this is all smoke and mirrors. Peikoff disclaims the very capacity to predict the future with any certainty. It is in every case, ideology that governs the world — as the last quarter century have demonstrated in spades and with uniform flawlessness.

  11. Aaron,

    There’s logic as in Spock and logic as in The Logic of Collective Action. The fact that policymakers aren’t Spocks is neither here nor there, because even social systems made up of the most brainless of agents can exhibit a logic in the latter sense. If you agree that “the logic of economic interventionism promotes more interventionism” then that raises the interesting question of why we haven’t blundered into socialism. Pointing out the lack of epistemic rationality on display in the policymaking process doesn’t begin to answer this question.

    If I were trying to explain why, I’d start by suggesting that democratic institutions act as sort of a threshhold-based cutoff switch on the positive policy feedback loop that Mises et al. were so worried about. Voters could be really dumb, but as long as they were smart enough to look around themselves and see that interventionist policies were making things worse for them then policymakers proposing to repeal those policies would get support. This mechanism fails when voters are either not perceptive enough to notice the losses and make the connection (e.g. the FDA), or perceive themselves — rightly or wrongly — as benefiting from the bad policy (e.g. rent control).

    By these lights, Mises’ talk about “common sense and moral courage” is half right — moral courage hasn’t got much to do with it, but even if common sense is a constant rather than a variable you can expect to see the sorts of policy oscillations we’ve actually observed when the badness of bad policies becomes increasingly apparent over time.

    (Apologies for the tardy response; I’ve been on the road a lot.)

  12. “By these lights, Mises’ talk about “common sense and moral courage” is half right — moral courage hasn’t got much to do with it, but even if common sense is a constant rather than a variable you can expect to see the sorts of policy oscillations we’ve actually observed when the badness of bad policies becomes increasingly apparent over time.”

    I don’t think your argument is based in reality, however much it explains a framework to discuss mises.

    Blaming policy oscillations on observation of bad policy is fine, but in reality, I think you are discounting the senatorial and congressional and presidential self interest inherent in political decisions. A majority of the policies enacted (probably) are not in the interest of anyone who is not fighting to shape them directly on the floor or behind closed doors. The policy, in other words, is removed from the social realm of daily life, and therefore the daily life conceptions of all policy, which is going to be largely inaccurate regardless. And that inaccuracy is hardly the result of objectivist consideration or striving, but that is neither here nor there.

  13. “the logic of economic interventionism promotes more interventionism”

    also, just because this might lead to interventionism doesn’t mean there aren’t concurrent threads leading away from it at the same time. I think that is the idea of checks and balances. however, i realize that might be a corruption of a global application of the term “leads to” as in inevitably, and only, leads to. But it is possible that it does require more without needing to make the leap to pure socialism because of the constraints other interests place on policy.

  14. The issue of America’s movement towards fascism is about time frame, and also about the drag its Constitution and populace put on that movement. Fascism is a system of government where the citizens own the means of production, but the government tells them what to do with it. This is happening in the US through legislation after legislation.

    Recent obvious cases: the disregard for Eminent Domain by officials in various cities and states, the Wetland regulations that prevent farmers from using their land because it might flood, Landlord and Tenant acts that prevent landlords from managing their buildings as they see fit, all sorts of building regulations…. and so on.

    Less well known are regulations on corporations, which are really just the property of the owners, yet they have to bow and scrape before city councilors just to build or trade in certain ways.

    Even less obvious is personal and corporate taxation, duties etc. that redirect production towards the whims of those elected, not to mention the dictators that are the entrenched bureaucrats.

    Fascism is alive and well, and growing, in the United States. Not one candidate in either party this year is actually opposed to such fascism. Hilary wants to control Health Care providers. Heck, Ron Paul believes he has a right to dictate whether or not a woman should bear a child she does not want! Now that, to twist its meaning a bit, is a fine example of controlling the means of production!

  15. “[Leonard Peikoff says] neither he nor anyone else can predict ‘the form or timing’ of the coming dictatorship.”

    That’s dated. These days Leonard Peikoff welcomes dictatorship so long as (1) it’s not religious, (2) it helps destroy Israel’s enemies.

    OK, that’s hyperbole, but the reality’s not far from it. See State Torture: A Question for Leonard Peikoff.

  16. […] (especially those affiliated with Austrianism) seem as prone to it as anyone, leading to wrong predictions. Today Billy Beck keeps going on about the “endarkenment” while Vox Days says […]

  17. Oh, dear!

    But for that modest “Community Reinvestment Act” waayy back in the ’70s — with a new set of teeth added to it in 1999 — creep, creep — we might never have had that lil’ ole mortgage meltdown that we just had!

    Yes, Virginia, the welfare state leads to crisis, in time…

    And the solution?

    Precisely what years of the welfare state and regulation have consistently called for, of course: MORE state-subsidized credit extensions, and more, and more…

    Why, this is a “market failure,” of course, a failure of “deregulation,”duh! So, the solution? A lot more of the same is required!

    Now, if another TRILLION is looking like the MINIMUM we need right now, we’ll have to check those “government share of GDP” numbers again in a few months — won’t we, Aaron?

    Now, of course, to accomplish all of this takes decades of preparation and conditioning — in a place as reactionary as the U.S.A.

    We’ll see what really happens and what really sticks, but Aaron has been spoiled by living through a period in which the socialist march into the future had been in relative retreat.

    Is that the coffee I smell?

  18. BYW: ARI Watch needs to get its facts straight, my friend.

  19. And, oh yeah: the decades-long and remorseless state-annexation of the health care industry seems to be blossoming nicely, too.

  20. … Along with additional encroachments on freedom of speech, to follow-up on the big success of McCain-Feingold, of course!

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