Saturday, July 31, 2010

Rousseau: Discourse on Inequality

This post will contain all of the posts PJ and I put up in our discussion of Jean-Jacques Rousseau's Discourse on Inequality. The division into parts is arbitrary.

Part I
Part II

Tuesday, July 27, 2010

Rousseau: Discourse on Inequality, pt.I

The Princeton anthology includes two texts by Rousseau. Inexplicably, however, they are arranged in reverse chronological and (I believe) reverse argumentative order. Hence, I want to start with the second, his 1755 "Discourse on the Origin and Foundations of Inequality Among Men." The "Discourse" is divided into two parts, which describe man in the state of nature and the emergence of society, respectively.

Rousseau opens by distinguishing between two types of inequality: the natural or physical and the moral or political. There is nothing to be done about the first, but we are responsible for the second, which depends on our consent (293). To address this problem, he proposes to reconstruct the "moment when, right taking the place of violence, nature was subjected to law" (293). He is well aware that he is dealing in "hypothetical and conditional reasonings" (294). The inquiry is normative, not historical. We are interested in two things: first, how various forms of political inequality have been accepted by the subordinate members and, second, what sort of political arrangement might actually be justifiable. (The second topic is treated more fully in "The Social Compact.")

The state of nature presented in the "Discourse" is of a decidedly Romantic cast. Rousseau envisions primitive (or "savage") man as individually self-sufficient in a pristine environment. Natural abundance provides for all bodily needs. We have only come together now and again to copulate. Furthermore, primitive man, lacking culture, has no moral knowledge, and, Rousseau contends, doesn't need it: "So much more profitable to these [primitives] is the ignorance of vice than the knowledge of virtue is to those [in society]" (299). We see prefigured here Rousseau's deep-seated ambivalence towards society, which, on the one hand, facilitates new modes of "self-perfection" but which also, on the other, is the source of inauthenticity, vice, and social inequality.

Primitive man lives according to his "instinct," and, Rousseau claims, it does not lead him astray. To live in society, however, man must cultivate his reason, and this faculty can lead to all kinds of trouble (298). Reason, for Rousseau is closely linked with the ability to resist our immediate impulses and to elect from among competing desires (296). It is this sort of reflective self-distantiation that enables us to develop and pursue an ideal of self-perfection (though, as I've indicated, reason may also "turn man against himself" and engender "egocentrism" (300)).

Rousseau, like Hobbes and Locke, and unlike the Ancients or Medievals, views the passions as more basic than reason, so that what is rational must effectively be derived from the passions. We perfect our reason by means of the passions, which provide the necessary evidence about what kinds of thing we like and what kinds of things are good for us (297). Rousseau differs from his early modern predecessors, however, in what he identifies as the key passion. Hobbes and Locke leaned heavily on our drive toward self-preservation, fear of injury, and desire for security. But in Rousseau's idyllic state of nature, such anxieties have no place. What he proposes as the fundamental passion is "pity," an entirely natural virtue, defined as "an innate repugnance to seeing his fellow men suffer" (299). All social virtues, Rousseau claims, can be derived from pity: generosity, mercy, and humanity are pity applied to the weak, the guilty, and human species in general (300).

I have thorough notes on Rousseau, and will put together something on the second part of the "Discourse" later this week. If I have time, I will also do the "Social Compact"--though if I don't get to it this week, you might want to do it, for I won't have time next week. When we've got everything on the table with a first round of comments, we can turn to the more interesting critical comparative work.

Cheers, PJ

John Locke: Second Treatise of Govt. (IV)

The legislative branch, for Locke, is said to be "the supreme power in every commonwealth" (265). The "first and fundamental" positive law is that establishing a legislature, which is in all of its actions to be governed by the "first and fundamental" natural law, which requires "the preservation of the society, and (as far as will consist with the public good) of every person in it" (264). On the next page he talks about this fundamental law as being the "preservation of mankind." This is interesting in that, as you recall, his earlier statement of the "first, and fundamental" law of nature is "seek peace, and follow it" (210). What Locke in the latter passage asserts as fundamental, he in the earlier passage treats as derivative (the second law of nature is "that a man be willing, when others are so too, as far forth, as for peace, and defence of himself as he shall think it necessary, to lay down this right to all things; and be contented with so much liberty against other men, as he would allow other men against himself"). I'm not sure that this inconsistency actually presents any challenge to his political doctrine; yet, if you're going to take the trouble to put your laws in a hierarchy, you could at least be consistent about it.

If there is a tension between the two formulations, it lies in the difference in priority between individual and commonwealth. In the latter presentation, the government clearly has the authority to demand the lives of some of its citizens, i.e. as soldiers, where this is necessary for the commonwealth as a whole. Such a demand could also be defended on the earlier order of presentation, but it presents itself as decidedly more problematic.

Aside from this, most of what he says on the extent of legislative power strikes me as fairly straightforward. There's a nice summary at p.268: the law must be promulgated, it must aim at the common good, it cannot deprive people of property without consent, and this authority cannot be transfered to any body besides that instituted by the citizenry.

If there's a problem with anything here, it's with the vagueness of the "common good," a notion he also invokes to help distinguish between a king and a tyrant (271). What do we do when large sections of the public disagree about what constitutes the common good? I'm not sure that Locke has a good answer.

In the next section, as a concession to "human frailty," Locke argues that enforcement of the law should be delegated to a separate branch of government, so that the legislators are not tempted to abuse their powers and place themselves above the law. I recall Locke saying something about a judiciary, and viewing it as a sort of sub-branch of one of these two--but I can't find the passage just now. The name he proposes for the third branch that he does mention is the "federative." The thought is that, although citizens have exited the state of nature with respect to one another when joining together to form a commonwealth, nevertheless, that commonwealth remains in the state of nature with respect to other commonwealths (269). The federative branch, then, is in charge of the international affairs consequent.

Interestingly, although Locke advocates for a division of power, he is decidedly not promoting a republican system of checks and balances of the sort briefly in place in Rome and later instated by the framers of the American Constitution. The legislative represents the majority, and its will goes unchecked.

The remaining sections of the Treatise deal with the charged issues pertaining to the recourse of a citizenry when the government violates its fiduciary trust. Significantly, Locke does not speak of a "right to revolt." Instead he speaks of a government "dissolving itself," and hence generating the imperative, per natural law, that a proper government be re-instituted. It is the tyrant, properly speaking, who is the true rebel, for he has violated the trust of the people (277).

There are essentially three ways that the government might dissolve and so need to be replaced. First, if the society is invaded and conquered from outside (272). Secondly, the government dissolves if the legislative is altered from that put into place by the people (Locke catalogs five different ways that this can happen (273-275)). Thirdly, when the legislative or executive branch acts contrary to the people's trust (275). It seems to me that the third category ought to capture everything from the second category and more, so I'm not sure Locke even needs the former. In any case, I take the basic point of this section to be fairly straightforward. Do let me know if you find anything valuable in his more detailed discussion of what these forms of dissolution look like in practice.

As usual, sorry it took so long to pull this together. I look forward to your comments.

Cheers, PJ

Wednesday, July 21, 2010

Economic Nonsense

I have something of a love-hate affair with NPR's Planet Money podcast. On the one hand, it is consistently informant and engaging, belying Carlyle's adjective for the science of economics. Since understanding economics will be the most important thing we can do during the coming years, anything which furthers this goal should be lauded. At the same time, the people who run the podcast reliably follow threads which can't possibly lead anywhere. Insofar as this is not taken seriously, it is merely diversionary, and often amusing. But it also has the tendency to instill poor thinking.

To take an example, in a recent episode titled LeBronomics, one of the guests brought up the notion of a util. This unit has no real value, but it supposedly helps to quantify that which would otherwise be unquantifiable, namely the utility of a particular economic choice. Thus the hosts examined the utility, measured in chimerical utils, of Lebron James's Decision.

In the interest of full discretion, for those who do not follow sports, LeBron James is one of the best basketball players currently in the NBA. Since his contract expired at the end of last season, teams had been clearing cap room so as to have the chance to win the LeBron lottery. The Decision was an hour long television special in which LeBron turned his back on his home state of Ohio so as to party with his friends, Dwyane Wade and Chris Bosh, while trying to win titles with the Miama Heat.

Much was written and said about the display of narcissism involved in the decision, but I have a slightly different take. I want Supreme Court Justices to follow in LeBron's footsteps. Tell me the Judicial Branch doesn't become that much more compelling when we put Anthony Kennedy in the hot seat on national television.

Based partially on the fact that the perennial loser New York Knicks play in a large city, the Planet Money panel decided that in order to maximize the utility of all involved, LeBron ought to have played for them instead. This analysis is faulty for two reasons. Most obviously, LeBron is and should be primarily interested in maximizing his own utility. It was tactless to stab Cleveland in the back on national television, but he has the right to play for the team he so chooses; it's not as if any of us run felicitous calculus before determining whether or not to accept a job offer. While it might be nice if athletes took sports as seriously as the fans, we place an unreasonable amount of pressure on those who are little more than kids. If given the chance, most twenty-five year olds head to South Beach to party.

Less obviously—but more importantly—the discussion is an exercise in futility. There is no way to quantify utility; nor is it the sheer number of factors—the fans of the various teams, etc.—which makes quantification impossible. A single person can rank his preferences, and thereby qualify utility; for LeBron, his first choice was to play in Miami, his second, perhaps, Chicago, etc. However, as soon as a second person becomes involved, there is no way to compare scales of value. To pretend otherwise is not only deceptive, it leads one down dead ends.

The great economist Ludwig von Mises discovered this long ago. In his treatise on Socialism—first published in German in 1922—he explained that economic calculation was fundamentally impossible because, without the market's determination of prices, there was no way to compare goods and services. He was later to restate this truth in his magnum opus, Human Action: "The director [of a socialist society] wants to build a house. Now, there are many methods that can be resorted to... Which method should the director choose? He cannot reduce to a common denominator the items of various materials and various kinds of labor to be expended. Therefore he cannot compare them."

For the socialist commonwealth, the problem is of utmost importance. Without the feedback mechanism of profits and losses provided by the market, the director has no idea if his production is sustainable. He may be inefficiently allocating resources, thereby impoverishing society. This has nothing to do with the character of the director; as Mises points out, even an omniscient and benevolent leader would be incapable of comparing different goods, be they apples and oranges, or even similar iron from forges in slightly disparate locations. Mises's critique is ninety years old, but, so far as I know, it has not been successfully challenged.

Now, clearly, Planet Money is not advocating socialism. However, by entertaining a nonsensical idea, it gives credence where none is due. Economics is not rocket science; it is well within the grasp of reasonably intelligent individuals; but it does require patience and clear thinking. The util is an absurdity, with no more validity than discussions of angels dancing on pins. We should strike such silliness from our minds and proceed cautiously toward true economic knowledge.

Down with debt

"My other piece of advice, Copperfield," said Mr. Micawber, "you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." - Charles Dickens, David Copperfield

Poor Charles would have made a lousy Keynesian. The secret to happiness, as everyone knows, is to spend more than you earn. This is especially important if a nation is to remain economically viable. Should the economically illiterate proles refuse to spend enough to stimulate the economy, the government must step in and do the spending for them. This paradoxical recommendation seems like good material for a satirist, but it can scarcely be deemed good policy.

Yet it appeared credible enough to our leaders. This is perhaps giving more credit where credit is due; it would have been foolish to expect politicians to resist the siren song of spending sprees. It would have been especially foolish seeing that these same politicians were dependent on the people returning them to power. Congress was well aware that a stagnant economy meant a changing of the guard. So they did what any sensible group of cowards would do: cried crisis. Blindly thrashing about, grasping for anything in their power that might conceivably jump start the lagging economy, they stimulated it right good. And twice—first under Bush, then under Obama—just to be doubly sure.

Officially, the recession is over. Fear of a "double-dip" remains, but, for now, two rounds of stimulus have staved off a depression. Their policies implemented, the Keynesians are tentatively triumphant. The Democrats, poised for a drubbing over the health care debacle, may at least rest assured that the economy is doing fine, though making that case to the millions of unemployed Americans will be a tougher sell.

In reality, the polices enacted by the last two administrations have merely draped a facade over an economy which remains structurally unsound. The real estate bubble was made possible by the easy money policy of the Federal Reserve under Greenspan and Bernanke, coupled with the inherently fraudulent system of fractional reserve banking. Passing a two-thousand page financial reform bill in no way addresses the cause of the crisis. In fact, it grants more power to the Federal Reserve, as well as to the regulators who somehow missed the housing bubble.

The dot-com bubble having popped, the Feds inflated another one, this time in housing. When this, too, proved ephemeral, the politicians called on the banks to inflate another. The cure for popped bubbles is more bubbles. Actually, there is another way: allow the malinvestments—McMansions built on credit, strip malls in empty subdivisions, etc.—to be realized as losses. That which never should have been built can only be sold thus. Meanwhile, there is something else we can do: we can tackle the problem of debt, one aspect Keynesian orthodoxy ignores in its quest for a permanent series of bubbles.

In our haste to partake of the Greenspan miracle, we set aside the fact that spending can only be financed by saving. The debt fueled prosperity of the last three decades was largely illusory. This was made apparent by precipitous declines in house prices, which have only buoyed slightly because of government subsidies to first time home buyers. While times are good, no one wants to turn off the easy money spigot and let people know that this is not the way wealth is created. But when the party ends and the hangover hits, we can rethink the wisdom of permanent partying.

On a personal level, if we haven't already done so, we should return to living within our means. Any outstanding debt should be paid off as soon as possible. More debt should only be incurred if absolutely necessary. In time, this behavior will be seen as anti-social; “hoarders” will always be blamed by the profligate. But while one owes a duty to one's family, no one is under any obligation to go into debt for some vague public good.

Governments will need to cut back as well. This starts at the local level. It's true that the problem gets bigger with the scope of the jurisdiction, but locally, the voters have the ability to insist upon austerity. Pensions will need to be renegotiated, as government employees have retired with gratuitous benefits which make it impossible to continue to provide the same level of local services. This will need to be done at the state level as well, though here it becomes more difficult for the people to insist that the politicians make difficult, but necessary, decisions.

At the federal level, the problem may well be insoluble. Passing Obama's health care bill was a wretched idea, but the caterwauling concerning the matter is overwrought. As it stands this year, the federal government is unable to collect the revenue necessary to fund Medicare, Medicaid and Social Security. Even if we eliminated funding for the Empire, ended the two wars in Afghanistan and Iraq—as well as the proxy war in Pakistan—ceased paying foreign aid, eliminated the Departments of Education, Energy, Agriculture, Homeland Security, etc., the government would still face a deficit when confronted with just these three liabilities. Yet making adjustments in any way is political suicide, so the problem will continue to be passed on to the next session of Congress.

The optimists who insist that the economic crisis is over are not to be trusted. The cure for debt is not more debt. Like Copperfield, we cannot be happy until we live within our means. We can do little to effect the change in Washington; too many people will fight to sustain the charade. But we need not despair. We can put our own houses in order. It is a start.

Wednesday, July 14, 2010

New gig

Since it's not official yet, I'm not going to give any details, but it looks like I'll be writing regularly again. This will be similar to my old job at the Lode in that it will be a weekly column, but I believe it will be purely web-based.

I've been given free rein, at least for now, so I don't foresee any significant changes. On the other hand, since my interests have varied, I'll probably write a bit more about economics than before.

Friday, July 02, 2010

John Locke: Second Treatise of Govt. (III)

As promised, more on Locke. We'll continue with the section Of Political or Civil Society ending before the section Of the Extent of the Legislative Power.

Locke notes that man is inclined toward society. But society is not synonymous with the political, so we must examine political society in particular. "Those who are united into one body, and have a common established law and judicature to appeal to, with authority to decide controversies between them, and punish offenders, are in civil society one with another." (Princeton Readings, p. 258) The emphasis on the judicial aspect of civil society is a key component in Locke's philosophy.

We learn his objection to absolute monarchy, namely that the monarch is "judge in his own case." (p. 259) While each man is his own judge in the state of nature, it is incompatible with civil society, which requires, as we shall see later, an impartial judiciary.

Lock speculates as to how civil society could have been formed: "when any number of men have so consented to make one community or government." (p. 260) Implicitly, man could have consented to remain in the state of nature rather than enter civil society, though Locke would advise against this.

We might also wonder whether man may remove himself from civil society by removing his consent. This is not the case for Locke. For the civil body must move with the will of the majority. So while man must give his consent to form a civil society, once he enters into it, he is bound by the will of the majority--at least at this point in the treatise. We cannot insist on full consent because it will be so difficult to come by, and thus our civil society, being deprived of all power, is effectively meaningless.

Once civil society has been established, man gives his tacit consent to governmental rule by residing in--or owning--land in the area ruled by that particular government. However, unlike the express consent man gives when civil society is being created, tacit consent may be removed if a man sells his property and vacates that society.

Locke asks why man would leave the state of nature and "part with his freedom" in order to "subject himself to the dominion and controul of another power." Since the "enjoyment of the property he has in this state is very unsafe, very unsecure... The great and chief end, therefore, of men's uniting into common-wealths, and putting themselves under government, is the preservation of their property." (p. 262) Thus we also have a Lockean test for good government; a regime is well-ordered if property rights are consistently defended.

He highlights three shortcomings to the enforcement of property rights in the absence of government. First, law must be settled and established, so that controversies may be settled according to a consistent measure. Second, an impartial judge is needed to settle these controversies. Third, there must be power to enforce the decision made by the impartial judge.

I find it instructive to examine whether our own regime, founded with Locke in mind, continues to meet his criteria. The 70,000 pages of law written by bureaucrats and added to the Federal Register every year make it increasingly difficult to apply a settled and established law. And while the State continues to fulfill the function of ostensibly impartial judge between two parties, it's unclear what Locke proposes when the State is itself one of the parties.

Perhaps he need not be faulted for this; after all, the judicial department arguably created this problem themselves when they established the precedent of judicial review in Marbury v. Madison. And we should be careful with conflating Locke and American government. Still, as Copleston points out, Locke is a telling reminder that philosophy does matter since the United States Constitution could not exist without the writings of Locke.

Returning to the task at hand, man gives up two powers when he puts himself under government. He may continue to "do whatsoever he thinks fit for the preservation of his himself" (p. 263), but this power is now privy to regulation by the government; and he may no longer punish crimes at all, this power being handed over to the state.

This legislative power can "never be supposed to extend farther, than the common good." Moreover, "all this [is] to be directed to no other end, but the peace, safety, and public good of the people." (p. 264) At this point, Locke has not explained how this restraint will be affected. We'll have to wait and see what suggestions he has to offer.