So -- what happens next? How will this conflict resolve itself?
There are actually some fairly good guides as to what might happen when one order is supplanted by another -- in these very two works by Burke and Veblen, no less. One 'pattern' that I have seen pointed out in other places is to look at the various colonies that spun off of the British Empire over the past few centuries. Early to break away was America, which based its governing principles on the early Enlightenment ideas that were swirling about at the time, mostly along the lines of the ideas of John Locke. Much as the revolution was about kicking the British out, structurally and philosophically, America based its governing principles on the Britain of that day.
Later came Canada and Australia, once the Enlightenment's more strongly libertarian elements had faded and a more 'pragmatic' approach to statecraft had taken over that began to try to accommodate both the so-called 'positive and negative' freedoms. John Stuart Mill would probably best characterize the thinking of that period.
Later still came India in 1947, after Britain had spent a number of years in the grip of Fabian socialism. Unsurprisingly, Indian democracy proved highly bureaucratized, though that may also be a reflection of India's long tradition of social regimentation. Lastly, Hong Kong was transferred to China mostly in the image of Thatcherite free-market conservatism.
Today we see the Middle East in the throes of revolution, and the rhetoric of the upstarts mostly revolves around 'democracy.' Even if their actual articulations may be fairly shallow and that may not be what they eventually get, nevertheless, for most it is the animating motivation. It also, for better or worse, happens to be the popular mantra of the day.
This all falls in line pretty well with Burke's description of the Glorious Revolution's codification into written law what had already been the custom of common law for many years. It is also consistent with Veblen's observation that major changes in the order of society come in the wake of a major shift in commonplace habits of thought of people and their understanding of reality. Where the existing order fails to reflect reality as people observe and understand it in everyday affairs, it is displaced to reflect the new understanding.
The questions one must answer then, it seems to me, is 'what basic assumptions about life are broadly entertained by Americans at this point in time' and 'where do these conflict with the present order'? Those are the attitudes that are likely to find their way into law and custom in the future. So, one finds himself playing armchair psychologist of the American people, of which I'm probably not going to be the best practitioner. But I'll give it a whack, trying to stick mostly with the subject of economics. I'm sure others will be able to contribute better where they have special insight.
The Corpse of the Enlightenment
It seems to me that the Enlightenment, at least in the strict sense Veblen describes, is mostly dead. And, speaking for myself, I'm not too sad to see it go. The more I have looked into it, the more I find myself on the opposite side of most that it seems to have to say. The early movement appears to have been fairly sensible and reasonable – a belief in human freedom and respect for individual autonomy – but also fairly generalist.
From there, it seems that thinkers began to see 'problems' in their arguments, and began to tangle themselves up in knots as the outcomes of their policies failed to produce the vision of society they had thought that it would. Freedom took a back seat to equality as the Lockes were replaced by Mills and Rousseaus, and eventually Condorcets and Marxists. Meanwhile, the old conservatism never really had anything that awful to say about liberty in general, mostly it was about particulars, which the lofty minds of Enlightenment seemed to have no time for until such time as they began to bring down the philosophical house of cards. They could not conceive that their 'freedom' would eventually 'liberate' people of the very tendencies that a conservative social order had fostered and were necessary for their notions of freedom to function. Thus the latter philosophical circumlocutions. Burke and Malthus, on the other hand, seem to have been a bit more practical thinkers from the beginning.
At any rate, most of the residues which seem to remain have little in the way of Lockean property rights and social contract in them and more in the way of equality, though thankfully not the rabid material equality of the late Enlightenment. They are fairly bland and generalized, though often felt quite strongly.
Under a true order of freedom of contract, differential treatment of people, say, employees, is perfectly acceptable. A boss could be utterly abusive of one employee and favor another for absolutely arbitrary reasons, and that would be perfectly within 'reason.' The only recourse of the abused employee would be to dissolve the relationship -- to quit -- and that would be all there was to it. Purely a business decision, nothing more. Perfectly logical, and perfectly inhuman.
As a practical matter, things don't actually work that way. In the past, people may still have had strong opinions on how one person ought to treat another, probably even stronger than today, and they would most certainly feel angry at such behavior. But they would not try to impose appropriate behavior by law, and, in general, no court would hear a case over something like 'wrongful termination.' That would be a nonsensical term.
Nowadays, such legislation is commonplace, which tells me that people favor 'fairness' and equality over freedom of contract. Even outside of the law, every employee and even the boss almost always submit to a basic ethic that people should be treated 'equally,' even in cases when it logically does not make any sense. If one is to be singled out for abuse, there must be a general consensus that he deserved it, or else there is likely to be anything from widespread grumbling to high employee turnover to outright mutiny. Behavior is generally kept within reasonable bounds, simply as a matter of widely agreed upon attitudes.
The tendency towards naïve equalitarian attitudes can also be seen, for example, in the widespread support for the essentially Wilsonian Mideast policy in the wake of the 9/11 attacks. That attitude has since soured, but in the beginning it was widely believed that if democracy were simply planted in the Middle East, everything would somehow be okay. This was predicated on the deeply rooted attitude that 'all people are basically the same,' thus democratic governments are both desirable and practical for everyone. I must confess to having been a part of that, though in my defense, I was in my early twenties at the time and nobody should be held accountable for his early twenties.
In these attitudes -- the resentment of unwarranted discrimination, assertions of human equality and essentially equal validity of tastes and points of view -- present day America is still very much in the grip of the Enlightenment. In a few other instances this also holds, such as a general disinterest and disdain for the past and a tendency towards self-absorption.
But in most other regards – absolute sanctity of contract and right of property, for example – that is no longer the case. I think that a little experience with such a regime (read – 'subprime meltdown' and 'credit card companies') has led people to rethink the absolutist nature of some of these attitudes.
Other Elements of the New Order
This may all seem very simple and obvious. Very basic premises usually are. But rationally, from the mechanical point of view which we have been taught that the world works, it makes no sense. It is actually a contradiction, for example, to base one's relationships on freedom of contract, and then to be intolerant of differential treatment. As a practical matter, freedom of contract won't exist anyway. Why hold on to it as an ideal, codified into law? It is a clash of new attitudes with an old convention.
As in this simple example, the new order, it seems to me, is based on a fairly nebulous system of ideas about fair treatment and what constitutes appropriate relationships among people. The new codes are not all that unlike the old codes of the feudal orders, though not of the same flavor, and often disregard logic and settled law.
They are observable in many other instances as well. For example, in business it is common practice to provide employees leeway for absences. But for whatever reason (not 'whatever,' actually), the employer actually bothers to sift through the 'reason' for the absence. It makes a difference whether the employee claims to have been sick, had car trouble, or was out all night with a prostitute and couldn't make it in. From a business point of view, and from a point of view of freedom of contract, it should make no difference. The result in any case is the same. The business loses money whatever the reason, and since it is easy enough to make up a lie, why bother to ask? Why not simply allocate so many days to such circumstances and dispense with it?
There is this need to be judgmental. There is a need to feel that 'life is fair,' at least so far as one can make it, and that reprobates of whatever kind ought to get their just deserts. Actually, illogical and occasionally annoying as it sometimes comes off to me, I think it speaks well of a culture that such standards of behavior are so rigidly observed, however naively and imperfectly -- and without the force of law. It may seem unimaginable, but such is not the case everywhere. Arbitrariness is an accepted fact of life for a good fraction of the world's peoples, not something to get worked up about or to take action against.
Another such example is the phenomenon of 'I tried.' One may have failed, but if 'he tried,' well, he can't really be blamed. Horseshoes and hand grenades aside, he did all he could and that is what matters. This is also completely illogical, as trying has no effect on outcome, and often even negative effects, unless the attempt is successful. Whether or not one tried is irrelevant -- one succeeds or one does not.
The Medieval feudal mindset grew out of a Christian/Pagan past, but the New Feudalism has grown out of the Enlightenment. The old codes of behavior had mostly to do with recognizing the sanctity or holiness of a thing or a situation and acknowledgment of conquest or status. The new code contains a somewhat nauseating, somewhat quaint recognition of the 'newly holy' -- the politically correct, self-esteem, equality, etc. -- plus a mixture of local, mostly unexamined sentiments. These sentiments will probably find their way into law – as they obviously already have in many cases.
Many people wonder about the possibility of national breakup. A major problem for national unity is the tendency to attempt to legally codify behavior according to such sentiments and impose it on large scale. These sentiments are naturally localized -- they are local habits of thought, and life in different places produces different habits. People from one locality find the sentiments and habits of other locales grating.
The so-called nation-state is largely an Enlightenment phenomenon. Things weren't always so. It may be that it is only Enlightened cultures that can produce sprawling nations held together by minimal legal structures, where there is less of a felt need to impose any particular order or to sustain an extensive social stratification. Feudal codification of behavior and the strength of the codifying sentiment may not permit such sprawling structures.
I am not certain of that, though. I know that in its latter stages, Rome's social structure began to resemble the feudal hierarchies that followed when it fell. In many ways, Rome's fall was not really a fall, it was a transition to a new way of life that grew out of he old order but would not sustain it. It has been argued, convincingly to me, anyway, that the 'fall' of Rome was actually beneficial to much of the lower social strata, as it removed the upper layers of corruption that had built up and to that point were thoroughly sapping wealth away from those who labored to produce it.
Perhaps ours will be like that as well. Latter Rome produced a quasi-feudal stratification that was not sustainable on the scale of the Roman Empire. For the social order to continue on as it had been developing, it was forced to decentralize, lopping off the expensive and unproductive uppermost layers of stratification. Perhaps what is needed for our own present social structure to sustain itself and continue on in the vein it has been developing is for the upper layers to be lopped off as well.
But whether or not that happens isn't all that material. It is clear that there will be a decentralization. Whether the national and state layers are removed or remain in a vastly weakened condition will not make much material difference to the social order or the lives of individuals -- the possibility of warfare excepted, of course.
I will return to the topic of decentralization later.
God and Public School
I think most of these attitudes stem, again, from public schooling. Possibly, it is the other way around – that public schooling reflects these attitude.
In any event, even outside of these attitudes, the authoritarian hierarchical structure of early life has definitely had an enormous impact on people's perception of 'how life works.' One goes to school, one 'gets a job,' one raises a family, retires, and then one dies. Life is 'planned.' That's just the way it is. Serious travel, entrepreneurship, other real initiative-taking activities are not really on most people's radar screen of realistic possibilities. We are no longer a nation of pioneers. There seems to be little curiosity about the 'big picture' or how things work, merely the necessity of participating in it however it does and trying to enjoy a little of life on the side. 'Someone else,' those people who seem to know everything, take care of the details. Everybody else just does what they say and tries to enjoy the bread and circuses.
Mostly, life comes 'pre-packaged,' like a TV dinner, and if one does what he is supposed to do -- stay in school, don't do drugs, go to college, 'work hard' -- things are supposed to turn out. The fact that they often don't doesn't seem to faze the mindset in the slightest. They are supposed to, and when they don't, it isn't fair and 'somebody' is to blame. 'They,' that elusive cadre of geniuses who are supposed to make everything work, need to do something about it.
I think that this tepid authoritarian streak is reflected in most people's theology as well, to the extent that they have one. Many people seem to have a sort of quasi-Calvinistic idea of God as an ever-present benevolent micro-manager, 'in control of everything,' or if not, then something fairly close to that. Whenever this square meets the circle of free-will, which is admittedly rare in the minds of most people, the circle seems to be the one squared more often than the other way around. This translates to the real world as an expectation that authority ought naturally to be centralized and to intervene as necessary to 'make things turn out' or 'to set things in proper order,' -- even among conservatives. Hence the attention to national government and national news as compared to disinterest or disdain for the local variety, and the implicit attitude that lower levels of authority derive their legitimacy (when they are acknowledged to have it) from higher and ought to submit to it. There are fewer and fewer areas that are off-limits to the higher orders of political organization.
Note that this does not necessarily follow from a Calvinistic outlook -- there is no reflexive reason that political theory should of necessity mimic theology, or that government must 'be like God' to have legitimacy. God may micromanage everything, but He might specifically command people not to. Nevertheless, due regard for nuance and peccadillo are not known to be strong points of revolutionary movements. Most people most of the time seek 'consistency,' even if their ideas of consistency are fairly shallow and its pursuit leads them straight into a ditch.
Decentralization
Juxtaposed to these attitudes produced by a centralized way of life is an imminent and severe decentralization across the West. Without question, the EU will be pulled apart. Pushing up the division of labor with inflation will not work when currencies are failing. Governments and particularly public school systems are presently under intense financial pressure, with vastly more in the pipeline. They won't be able to hold it together. How 'modern feudal' attitudes adjust to the new, decentralized situation will be interesting to see.
My guess is that the new order will be asked to accommodate the attitudes bred in the old, but will not have the means to do so on a national scale. As discussed above, it will be like the fall of Rome, or the Middle Ages running in reverse -- larger feudal 'tell me what to do because I don't know' arrangements devolving into smaller and smaller. Large corporations will be bankrupted and broken up, local government overtaking the higher levels in influence. Meanwhile, the very institutions that encouraged and sustained these attitudes will have disappeared, or at best the stripped-down survivors will have little influence. Without them, attitudes could change rapidly within only a generation or two, precipitating further changes.
Those would naturally be more difficult to predict -- I have no idea what new attitudes will be produced, and only a vague idea that the new system will be decentralized and marked by a weak, naïve authoritarianism, obviously an odd and unsustainable combination. Will younger generations look on their dependent, directionless parents as pathetic and weak, and rebel against their attitudes in a new Enlightenment? South Korea provides such an example, as the US-allied conservative old-guard, which lived hand-to-mouth under the threat of aggression by their communist neighbor, gave rise to a new generation born in relative security and prosperity, which saw little sense in its parents' superstitious fears and turned sharply liberal.
Let's just deal with one change at a time, and acknowledge that whatever emerges may not last all that long.
Local Interactions
One very positive thing to say about American cultural attitudes is that on the whole they are quite intolerant of illegitimate attempts at power-mongering, coercion, and corruption -- when they recognize it. It's that judgmentalism thing again. Wave an American flag or flash an official-looking badge, and you can rob them blind. Try to do it brazenly on your own muscle and wits and unless you are exceedingly clever you are likely to be summarily shot. Well-known local exceptions that shall go unnamed are duly noted, but they were never really all that influential anyway, were they?
I do not think that gangsterism and corruption will become a big problem. It might for six months or a year, but hard times tend to produce hard attitudes, and with the long arm of the law safely bled dry, individuals are unlikely to put up with as much as government has in the recent past. Nor will they be held back as effectually by government, either. Streets in most places may actually become safer.
Modern American corruption has typically been an institutional, large-scale phenomenon. On an individual level, things are mostly on the up-and-up. Mostly. That is one of the positive things about a rule-mongering, quiescent culture, and I don't expect that to change soon. It is usually Americans trying (unsuccessfully) to hold big government to account, not the other way around.With big government gone, the level of corruption may actually go down -- again, with duly noted local exceptions.
I would imagine that the emergent social order will be hungry for local leadership. Possibly some of the recently deposed pecuniary class will fill this role, but again I doubt there will be much patience for the same kind of legal posturing that created the situation in the first place. But maybe I'm being naively optimistic. I would expect appeals to the mechanical side of things to be more likely to succeed -- 'here's how we can get things moving,' in other words.
So, I would expect to see local politics take over in a sort of odd fashion, with many localized quirks and sentiments forming the basis of custom and the legal structure. Probably many of the procedural details -- like how trials are conducted, will be retained. Many of our own go clear back to the Medieval period. What could be more logical to a mechanical mind than 'if it ain't broke, don't fix it'?
The Law
Now that I've got a basic outline of the dominant habits of thought of our time, at least in the eyes of yours truly, it is time to look at how they clash with the legal order to see how things will probably change.
One of the most glaring discrepancies are the attitudes towards economic arrangements central to average people's lives -- like employment, and important purchases such as homes and education -- and freedom of contract. Americans do not believe in absolute freedom of contract in these cases -- they believe in fair treatment and right conduct, whatever that means. If free contract can be accommodated in that framework, so much the better. But right conduct clearly comes first.
For example, an employer feels a need to give a reason why an employee is to be let go, even though in most cases he legally he has no obligation to do so, or even to have a reason. He feels the need out of his own personal relationship to the employee, but also because he implicitly believes the employee justified in wanting to know the reason for such a wrenching change to his life, whether that reason is 'you deserved it' or 'I don't have the money.' That is just the way people feel and act. There is no law requiring such consideration, people just do it.
Another example -- lawsuits. Much as I may understand the logic of tort reform, and might even agree with it, does it make any sense to, as Burke might say, create law counter to the sentiments and prejudices of the people? Clearly, if this is a 'big problem,' there must be a great number of people who are of a mind that it doesn't matter -- fair is fair, right is right, and the practical consequences can go play in traffic. What happened to 'the consent of the governed'? What is a government that tries to hem in large fractions of its own people with laws that they find repulsive?
Many other such tensions are evident today -- the Drug War, environmental laws and other regulations, illegal immigration, tax evasion -- that testify to the fact that America's laws do not reflect the sentiments of goodly fractions of her people. Yet this does not stop groups from attempting to impose even more. One of the visible outcomes of this tension is the tendency towards mass imprisonment -- the US has one of the largest fractions of its population imprisoned in the world. Another is the polarization and acrimony that characterizes modern political discourse.
And yet in all these cases, one observes often flagrant disregard for written law as a matter of day to day behavior. The de facto case has become divorced from the de jure, and people go about their lives just the same. Which means that, if these are generalizable examples, in many cases things probably won't actually change all that much. Tomorrow is already here. And in my opinion, they probably are generalizable examples.
The de facto standards that people live by already appear to be in force, regardless of what the law says. That was one of the main points of most of this discussion -- medievalism had set in before Rome fell, capitalism was already in operation before Adam Smith wrote about it, etc. To see what the world will be like the day after tomorrow, take a look around today, then subtract out the centralization. That is probably a good approximation, and to me, doesn't look all that bad.
I acknowledge that the wrenching economic changes in the immediate term will be painful and possibly life-threatening for many, and that a physical moving about will be necessary. Likely America simply won't attract many immigrants in the near future, and many may leave. Likely urbanization will both intensify and reverse, as cities become both denser and smaller. Other such changes are probably coming. But America as a society has already likely become what it will be. It just remains either to be codified into law, or left to common law.
To me, I don't think this is all so bad. I may lament the 'demise' of free-markets, but let's face it -- they were 'demised' a long time ago. I also look back with some fondness at the very human elements of the medieval order and its ennobling spirit. We have lived under a fairly soulless New Feudalism like the cold stratification that prevailed in latter Rome, cruelly enforcing established structures on a society that largely rejected them and had moved past them, but the New New Feudalism will likely be more personal and reflect a local spirit, like latter medievalism. I may not like a lot of that spirit, but at least it beats the posing and pretense of the pecuniary sorts who maintain the validity of abhorrent practices by dint of legal and contractual prowess. They'll have to fetch their own water because they'll be stripped of their wringing machines.
What might this legal order look like in practice? Perhaps a more practical common law as described by Burke is a reasonable guess. Maybe, for example, there will still be practical freedom of contract, but under a common law it will include recourse to proceedings to adjudicate 'fairness' in the event of conflict. Practically, that is what we have now, it is only that juries feel intimidated into enforcing laws they don't always agree with or understand due to the standing legal order. Under a common law tradition, they will be free to decide on the merits. Such an order would hopefully better secure contracts that both parties really are happy with and that really does result in mutually beneficial exchange -- if we can behave ourselves, and resist the temptation to fall back into legalistic rule-mongering. In other words, one will be able to have freedom of contract, so long as his trading partners don't complain.
I don't really like the idea of my affairs being perpetually subject to the opinion of every Tom, Dick, and Harry on the street, but on the other hand, I don't like being legalistically rule-mongered and placed over a barrel at every opportunity, either. I certainly trust an average, local Tom, Dick and Harry to give me a fairer shake than the present powers that be.
Will it be perfect? Obviously not. A lot of it will likely be very troublesome and annoying. But the slavery of Rome wasn't perfect either, and something better grew out of it. The medieval order wasn't perfect, but it produced something better. The Enlightenment has proven far from perfect, but perhaps it is leading into something better. And there were things to admire in all of these orders.
Cleaning Up
As I gauge it, I have left out two topics that some readers probably would like addressed -- what about the machine process, and what about those solutions to the capitalist order it looked like I was going to take a stab at.
The machine process is unpredictable. I predict it will continue to be unpredictable. It is a wild card. It could produce some wonders that completely change the economy and life in a way nobody can possibly imagine. Perhaps the engineers will produce an artificial super-intelligence that solves all our problems, or robots that eliminate labor as a factor of production. Perhaps the geneticists and biologists will give us superhuman intelligence and abilities, and we'll solve all our problems ourselves. Or invent some really big new ones. Maybe the new super-intelligences will use their abilities to form a new overclass and enslave the rest of us. Who knows?
Two things the machine process seems to be doing and will continue to do merely by being what it is -- decentralizing the economy by eroding the value of existing capital at a faster and faster rate, and forcing people to cooperate if they wish to partake in the benefits that technology confers. Veblen's centralizing effect of economic complexification ran its course long ago, I think. The intensity of concatenation and interdependence is already so far into the stratosphere that it ceases to be relevant to the discussion. It has gone from being a dynamic factor to a given. The question is as it has been -- how to deal with it. The new order is working out a way to deal with it by jettisoning the present overclass and searching for newer, equitable social arrangements. That is a good thing. As the social order breaks down into localized systems, there will be a great deal of further experimentation, the positive results of which will hopefully spread from one to another.
Which leads to the second question. I posed the very general problem of the free-market generating too many avenues to obtain 'something-for-nothing' as its basic dilemma. But every order has had this problem. Slavery was almost by definition something-for-nothing from top to bottom. Medievalism had a hefty share of it, too. Capitalism eventually became riddled with it, but for a good while it fared pretty well.
I can suggest some band aids. What led to 'something-for-nothing' was the discrepancy between custom and law on the one hand and material reality on the other. Custom and law, though, were derived from habits of thought. The solution, then, it seems to me, is to best match thought with material reality.
But isn't that what philosophers have been attempting for millenia?
Finally, I see that the thing boils down to an impossibility. I have learned my lesson. Capitalism is not to be hated and berated. It tried. Neither is medievalism -- it did, too. So did Rome. Neither are any of them to be held up as the epitome of perfection. That was my mistake. There is no perfection this side of the grave. What comes next is not likely to be all that bad but it won't be perfection, either.
But practically speaking -- here's my two cents on the economy.
First, gold and silver money have survived and functioned under every one of these economic orders. They worked. They will always work. They work because as a custom and habit of thought they best match the reality of their function in the economy -- the physical exchange of a value for a value. There is nothing I can imagine that will ever come closer than that, certainly not magically dynamic accounting entries or scraps of paper managed by a bureaucrat. These systems are designed to be gamed and they always will be. Something-for-nothing will always come part and parcel with them. Gold and/or silver should be money, and nothing else.
Second, financial transactions must accurately reflect the manifest reality they were designed to represent. Maybe that statement is somewhere between too vague and too obvious. Maybe an analogy is in order.
Think of markets as some kind of mathematical system of algebra or calculus. The prototypical 'math problem' takes a three part form. First, there is the statement of problem. This might represent something as simple as a business proposition, accurately 'translated' into the language of markets in terms of prices, volumes, etc., or it could be the entire economy.
Second comes a series of 'mathematical transactions,' in which the statement of problem is repeatedly manipulated according to the appropriate mathematical 'laws and customs' in an attempt to tease out the information one desires -- the statement of solution, the final part.
For the most part, practitioners of the mathematical arts learn the operations and mathematical strategies, and then once they are understood, use them rather unthinkingly like a meat-grinder to churn out the answers they want. Once the skills are honed, unless it is a very difficult problem, not much thought is given to the actual algebra or calculus, especially in the age of the computer. The thought goes into setting up the problem and evaluating the answer.
But, at least in a theoretical sense, every statement in the transaction portion of the math problem is also a reflection of the real situation set up in the statement of problem. If the transactions are performed correctly, and the statement of problem is true, then every statement is also true clear down to the statement of solution. All the statements are actually statements of solution, they just don't appear so to our eyes.
(Assuming that the problem actually has a solution, of course. Let's not get into those kinds of details just yet.)
Even if one accepts that every other statement in the transaction series is also a reflection of physical reality as described in the problem, it is almost always impossible to directly relate any particular statement to physical reality for anything more difficult than a trivial problem. Curious mathematicians may occasionally try to do so, and actually be able to do it on rare occasions, but for the most part it is all done on faith. One usually only understands each statement's relationship to reality via its relationship to the statement of problem, plus faith in the applied mathematical transactions. This is the 'magic' and the power of math -- it lets people indirectly manipulate notions that their minds could not possibly handle directly.
Likewise with markets. Financial transactions are indirect means of manipulating quantities that symbolically represent economic reality, sometimes in a very abstract sense. It is quite nearly impossible to look at any particular price and estimate whether it is 'reasonable' versus reality, or directly evaluate any particular business situation and know whether it is a wealth-producing or a wealth-destroying employment of the factors of production with any degree of precision. Doing so requires all the indirect financial transactions of the market and the information they provide. For this process to work, the initial description of the problem must be accurate, the indirect financial transactions used by the market must be legitimate methods of accounting for economic reality, and those transactions must be capable of handling the situation in question. Otherwise, the information the markets provide will be poor reflections of the real world, and provide economic incentives to do uneconomical things. Nobody expects to get accurate information by using incorrect algebra to solve a problem that requires calculus. Nobody should expect markets to work with financial transactions that don't reflect reality, or business situations that foil the available tools of finance, either.
The problem with the Enlightenment was that its rules governing financial transactions and business situations were limited only by freedom of contract and the absolute right to property. It trusted to human self-interest and intellect not to construct a dysfunctional financial order or to engage in transactions that were nonsensical. For the most part, it worked reasonably well, but obviously that has broken down as described.
It is possible to detect some types of financial transactions that do not make economic sense, such as fractional reserve lending, and it is possible to detect some situations that are going to foil the calculating abilities of the financial process, like market restrictions. But it is not easy for me to imagine a legal order that would prevent all such transactions and situations altogether. Obviously it would need to incorporate some sort of regime of proper and improper usage, such as existed under the medieval order. But naturally, the whole idea of a regime implies inflexibility, while it was liberty which allowed the market to grow as it did. Perhaps it is possible that there is a totally different system of 'financial math' that does not allow such errors. But I wonder if this suggestion is as implausible is a 'different' system of regular mathematics.
On the other hand, perhaps such exercises are illegitimate in and of themselves. Legal orders flow from human ideas, values, customs and habits, and it does not make sense to contemplate foisting something on society that society hasn't itself embraced on its own. Which is to say that it does not matter what ingenious program anyone may come up with, this is not how these matters are decided. I'm sorry I don't have a better answer than that. Maybe discussion was helpful.
Conclusion
The progression from slavery to serfdom to capitalism has provided better and better mechanisms for solving the problem of economy and social order. And as much as one tends to focus on the differences between these social orders, it is also important to note the similarities. The medieval order imparted an intrinsic human value to all people through the Christian faith by granting everyone a defined place in society and a relationship ultimately to God. That was absent from the ancient slavery, where each man's own struggle to negotiate the often fickle and arbitrary temperaments of the gods was his own problem. He was lifted up or destroyed as fate would have it. The Enlightenment had different ideas about social arrangements from medievalism, but did not overturn the basic idea of intrinsic, individual human worth, at least until it began to reach its latter stages in 20th century socialism. I do not expect the next order to do so, either.
History tends to be written from the perspective of 'important people' – kings and queens and generals, and business tycoons. But their lives usually do not reflect the lives of the lesser of us. In large part, I suspect we are already seeing the social order working out its differences with the modern economy, and much of it in a good way. I certainly take heart in the notion of individuals standing up against being commoditized, mulcted and abused, and continuing on with their standards in the face of law that often seems not to respect any. Even if I don't always agree with the rhetoric or the methods, I do agree with the spirit.
Many of the something-for-nothing problems that came with centralization will at least temporarily abate with it, with or without 'solutions.' The division of labor will contract, but so will the ability of the authorities to milk the system. Overall, in the long term I am optimistic. At worst, it sounds like a wash to me.
In the short term, I will try to be prepared. I will look to insulate myself from the contracting division of labor, and I will try to live amongst people whose attitudes I can deal with.
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