There haven't been a lot of posts here lately. The contributors need a rest, for various reasons. But one of the reasons, perhaps the most difficult, lies in a sense that we are not always on, or close enough, to the same page.
But maybe I'm wrong, or maybe we can only know by working things through with some dialogue. To that end, I thought I'd reproduce a comment I just made at Breath of the Beast.
First, just to frame it, I'm wondering if some of the thinking at this blog, for example, may be more libertarian or antagonistic to all forms of shared, collective, authority and the sacred than I would like. Certain epistemologies expressed might, while nominally expressed in the name of freedom, have too much in common with the worldview of the contemporary nihilist left - all truth is reducible to the will to power - for my liking.
Anyway, here, slighlty revised, is what I wrote in respone to Yaacov's post where he discusses the current despair many conservatives in America feel in respect to both political parties and towards their government, and where he also discusses how he was belittled by academics who, in idolizing their own occupational detachment from the marketplace, think it fit to criticize anyone who would suggest that the proper ends of intellectual life are not in the intellectual or political life itself, but are tied to the need to increase value and reciprocity in the marketplace. I agree that increasing human reciprocity in the marketplace is our primary ethical concern. But, on the other hand, I don't think that we can get there by simply belittling all those who value the need for outside-the-market morality. Here's the comment:
Have a look at Virginia Woolf's letter on "middlebrow". You'll see that the (proposed) alliance of the elitist and the plebe against the middle dates from at least the period, in the wake of WWI, where high culture entered into a despair and nihilism and pushed away the middle classes who, if they had not often been at the cutting edge of high culture nonetheless had until then aspired to keep up with it. But in the 1920s, a distinctive "middlebrow" publishing industry and associational culture arose, setting the terrain for highbrow rants against "Babbitry" and the "booboisie". Those graduate students belittling you were just mindlessly recapitulating 1920s sneers.
If we want - and we do need - a class of politicians who can lead with productive moral values, it is not enough, I think, to suggest that they just give us good laws and then get out of the way. They do have a necessary oversight role in watching, measuring, negotiating, regulating our unfolding freedom. It is a mistake to think we grow freedom by diminishing politics and the institutionalizing, in government, of our political negotiations and decisions.
Take, for example, the current financial debacle. Writing loans to people with no income, no jobs, no assets and then repackaging and selling those loans so their real toxicity can't be seen, so that financial players can win big commissions and bonuses while forestalling the inevitable day of reckoning, is either outright fraud or the most bizarre confabulation of magical thinking in the minds of many thousands of financial people. The continued unwillingness of the banks to mark their bad "assets" to market value is also, it seems to me, a form of accounting fraud being played on their investors.
I tend to think it wasn't a mass psychosis of magical thinking, that America has just been witness to a massive fraud, a massive ponzi scheme, that thousands of people involved in the financial industry must have been more or less aware of in its build up. And how many have even been investigated, let alone charged, by the legal-governmental authorities? Zero (charged, I believe). No, "government" has been actively trying to paper up the fraud lest we lose entirely our confidence in the present Wall St.-Washington system and have to go through a massive dislocation in finding ourselves again.
But there is no denying, it seems to me, that the reason this massive fraud was made possible is because the rather "laissez-faire" financial industry (when regulated, poorly regulated by the controlling types in government) proved itself full members of the human race, i.e. immersed in original sin, and corruptible. Somewhere along the way the economic players needed to be accountable to political players, via government. Instead, a mix of laissez-faire ideology and left-liberal cronyism that tied together Wall St. and political interests "ruled".
Laissez-faire cannot be the guiding ideology of real freedom. Real freedom involves having a hand in ruling yourself, and your neighbors' public conduct, in tandem with your fellows in a self-ruling democracy. It does not mean thinking there can ever be a society where the market simply polices itself with no political/public negotiation and regulation outside the market. Just try to imagine a market where you could buy every form of insurance, company information and "credit checking", every necessary piece of contract law, to mitigate against the risk of corruption in those with whom you were in trust relationships (perhaps keeping in mind how the bond rating agencies have just proven themselves readily corruptible by the logic of the marketplace). At some point you would always come to realize that you ultimately rely on a kind of disinterested, potentially self-sacrificing, morality that cannot be articulated in any purely economic logic. And this would entail more than the rule of law (though of course that would be indispensable) because there are always novel situations in which forms of "grey market" immorality are not going to be foreseen by the law. In short, there will always be a need for an economic insider who goes political, who breaks with the economic players and hence his own self-interest to say "look what is going on, this is wrong, WE have to do something about it".
Freedom requires some kind of partial closure to the economic free market through a political marketplace. Unless we take up this claim seriously, and see where it takes us in conceiving a truly ethical, if not "moral" economy, for the years ahead, the left will always have a great political advantage over those of us who truly want not to control (as does the left) but to find rulers who help maximize our freedom. Shouting at tea parties is not enough. The forces of freedom must become full players in politics and government. And that can only start with building up the narratives that give people the reason and desire to so involve themselves.
17 comments:
The only freedoms we keep are those we earn and deserve with accountability and responsibility.
Our shared model is the simple truth.
Governments need only criminalize lying to attack all forms of corruption at once.
It can be done. Advancements in communication technology allow the recording of most if not all dialogue to ensure that the courts are not swamped with frivolous hearsay.
How could criminalizing lying adversely affect anyone who values truth?
Glad to see you posting again. While rarely in full agreement with you -and that is the fun of it- your posts are always very thoughtfully written.
That the contributors to this site, or the common marketplace, aren't on the same page -that it is difficult- does not prove in either case the need for a disinterested governor of either. I do note that you did not draw such a parrallel, but I think it important to point out that this blog, though of divergent contributions, has a recognized value that is more than the some of its parts. The same is true of the market, which people tend to speak of in a disconnected way. The market forces that overly creative and incurious business people did respond to was of our own making. And the involement of a supposed better moral judgement did only serve to distort to disasterous ends our communal decisions. This current fiasco would not have occured without Government involvement in the sub-prime industry. In the long standing competion between the shared desire of low-income borrowers to own a home and lenders to profit upon such loan did stand the desire of bank shareholders to protect their principal from undue risk. Breaking that stalemate, was not the action of a government that chose to govern least. It was the action of Fannie Mae and Freddie Mac, for supposed elightened moral reasons.
Rob,
One of the things I am suggesting is that there will always be people who want to game the system and we need to find ways to watch for this but that no system will be fool proof and without the need for extraordinary interventions of various kinds. Recording "all dialogue" strikes me as a radical proposal that would raise all kinds of problems related to conversations that have legitimate reasons to remain private (who would control the recordings?). But let's just say we found a way to record conversations in order to catch people plotting how to game the system. What would stop them from inventing counter-measures, like people in Cold War movies who operated knowing their buildings were bugged? It seems to me we remain with the need not for a "perfect" system that attempts to control evil but rather we need ways to positively encourage appropriate interventions in the market, e.g. to value and protect whistle blowers, to force transparency when questions are raised, and we need to penalize wrongdoing more rigorously.
As for "our shared model is the simple truth", well if it were simple it would be well-known by now. Human truth is paradoxical at base. For example, it is one thing to criminalize fraud and deliberate deceit; but if you had a puritanical attitude towards criminalizing lying, you would encounter many situations where you couldn't really know if someone was engaging in deliberate falsehood or wishful thinking/self-deception. Criminal law must judge intent.
The loopholes in our criminal justice sytem aren't technical, they are procedural.
We keep trying to fix procedural problems with more procedure succeptible to the same corruption.
We do need a simple fix. The KISS principle is valid (Keep It Simple Stupid).
Corruption is based on lies - so criminalize them.
Start simple and prosecute the obvious ones and create a new industry to discern intent.
Soon underlings won't lie for the bosses and the cowardly bosses will be exposed.
We have the technology - lets use it.
Maccusgermanis,
Thanks for the encouragement.
And the involement of a supposed better moral judgement did only serve to distort to disasterous ends our communal decisions. This current fiasco would not have occured without Government involvement in the sub-prime industry. In the long standing competion between the shared desire of low-income borrowers to own a home and lenders to profit upon such loan did stand the desire of bank shareholders to protect their principal from undue risk. Breaking that stalemate, was not the action of a government that chose to govern least. It was the action of Fannie Mae and Freddie Mac, for supposed elightened moral reasons.
-I certainly have to acknowledge that there are dangerous forms of government intervention in the market. But I would like to take the discussion away from the established polemics of government regulation vs, free market, because I can't imagine an absolutely free market that doesn't have to defer, at times, to those who would (with a disinterested morality) protect its freedom: the market itself creates all kinds of interested parties who once successful want to institutionalize their advantage at the expense of market freedom. There are always going to be attempts to restrict or regulate the market, one way or the other. So the question is how do we go about thinking what are the more negative and more liberating forms of intervention. If we are only interested in the dogmas of big government vs laissez-faire, then I have to acknowledge the latter are superior because they champion the humility that comes from deferring to the collected decisions of many market players vs. the arrogance of the chosen government man/expert who thinks he knows best. But let's try to get away from the dogma.
I have no obvious difference with your account of Fanny and Freedy. It must be somehow true that government regulations, not least the assumption of moral hazard by explicit or implicit government guarantees in the credit market has been a dangerous distortion of obligations that is fundamental to the current credit collapse. Through its chosen forms of regulation, government has acted to hide moral hazard or give the appearance of freeing banks from risk.
But as we think about how to respond to this, we need to ask what would maximize light and minimize moral hazard in the future. And why should we assume a laissez-faire dogma will help us here? We need ways of bringing to the fore people's sense of obligation to the various players in the market. The problem with one kind of government regulation is that faith in "the system" gets people thinking in terms of merely conforming to their legal, mandated obligations. This in turn diminishes one's sense that we might be called to regulate our conduct in ways the law does not make explicit, if we are to realize basic moral obligations of maximizing reciprocity in the marketplace.
But how we know and see those obligations, which are not purely economic for they are often to do with protecting the freedom of the market, if there are not ways for them to be articulated through some kind of politics and at times institutionalzed decisions/regulations? This is where disinterested thought and agencies have a role to play if regulation is to protect the market's freedom from forces both internal and external to the market, as opposed to regulation that seeks to control the market (the latter is, as you suggest, not disinterested).
By the way, I am drawing on Adam's blog here though I haven't made it explicit yet because I half a mind to write another post contrasting his argument with another.
Hmm, there is a problem with that link. It is the first post, presently, here
Rob, fraud is currently illegal. The problem is that it is not being recognized often enough, it seems to me. We are deferring to financial "wizardry" as something perhaps too "complex" - and blaming complexity for the financial crisis - but we are not so keen to call it fraud (except at certain blogs - I'm talking about the MSM's attitude.)
Anyway, anyone who misrepresents financial statements is presently criminally liable. What are you suggesting that is different?
The difference is that fraud requires proof that a deception was intended to create gain.
The procedural dance is trying to prove that the gain was derived from the intent to deceive.
Criminalizing lies will require no such criteria. The mere act of deception would yield a guilty verdict.
Much simpler.
So, Rob, you are proposing that all conscious lies in the marketplace be outlawed, even when they cannot be shown to cause harm.
Wouldn't that leave the courts open to endless calls for prosecution based on envy, resentment, arbitrary malice etc.? How do you decide what is a lie absent evident of intent to harm?
Wouldn't some shady behaviours be better addressed by non-criminal means of encouraging morality by shunning, boycotting, etc.?
Your use of the term dogma does confuse me. Is the laissez-faire "dogma" an unassailable truth to be worked from, or a boring artifact, having worked far too well for far too long to remain interesting? It's rather incredible that you would both accede the argument suggesting to rise above it, only to later re-attack said "dogma." It's true that least governance is best. That does not wholly rule out governance, itself being a compromise between utopian anarchy and philosopher kings. Why in the name of freedom, must a compromise toward authority, be further compromised?
Likewise, the supposed distinction between protective regulation and regulation that seeks to control is somehow lost when one considers that regulation is control.
The individual needs to understand their own role in the market, before attempting to accede any control to supposed disinterested parties. The market is not broken any more than is the sun is when it sets. These times will create a more wary lender and borrower that shall regulate the market. Due diligence would have regulated and mitigated the discomforts we now face. As a great pioneer of creative financial regulation once said, "When people learn–as I doubt they will–that they can't get something for nothing, crime will diminish and we shall live in greater harmony."
Is the laissez-faire "dogma" an unassailable truth to be worked from, or a boring artifact, having worked far too well for far too long to remain interesting?
-I'm not sure if you're asking me what I think or what I think those who hold to the "dogma" think, but I don't think it's either unassailable or a boring artifact. It's an attitude that becomes a "dogma" when it attempts to systematize itself, in other words when it tries to explain what has or hasn't worked in a given event, or in events generally, by recourse to language that attempts to appear systematic, notwithstanding that the nature of reality, of the human event, may not be entirely well captured by systematic propositions. Events do not have a systematic logic, as those who attempt to model and predict the stock market inevitably discover, sooner or later.
It's true that least governance is best. That does not wholly rule out governance, itself being a compromise between utopian anarchy and philosopher kings.
-if you admit that some government is necessary, how can you say the least is best? What I think you mean is that the least necessary is best. And I would say, yes, but it seems we have different understandings of the necessity from which our freedom grows.
Why in the name of freedom, must a compromise toward authority, be further compromised?
-if something is necessary, how is it a compromise except in terms of a "dogma"? Anyway, let me suggest that there is a difference between authoritarian government and intelligent rule. We need rulers who can judge conflicts and keep play within bounds; we don't need governments that want to dictate how the players play.
regulation is control.
-ideally, it only controls what it is necessary to control for free play. Again the analogy of a game: you need rules, you need people to keep the rules and sometimes you need interventions to adapt the rules to unforeseen developments in tactics and strategy. THat is what maximizes free play. If we don't have people with authority outside the game, then the "game" will quickly be taken over by a strong player trying to institutionalize and enforce what would otherwise be only a temporary advantage.
The individual needs to understand their own role in the market, before attempting to accede any control to supposed disinterested parties.
-yes, but that will sometimes entail the individual serving as a (dis)interested party, as when someone volunteers to serve on an industry committee seeking some form of industry self-rule. Extending this idea of service - government of the people, for the people - to all forms of necessary rule is what we need to encourage.
These times will create a more wary lender and borrower that shall regulate the market
-for a time people will be more chastened, yes, but there will always be movements in future that distort our obligations to keep the market healthy because of the inevitable distortion that comes from serving self-interest. If we are to have a market that operates by giving people the freedom to serve their interests, don't we need to guarantee that possibility by thinking how to make room for disinterested activities? Doesn't every virtue become a vice if taken too far?
Yes you do understand what I am recommending.
The courts are open to abuse now. But abuse is corrupt and also a lie, so abusers would also be convicted. The novelty of abuse would quickly diminish.
Not all lies would go to court. Criminalizing them would give greater power to those who choose to shun, boycott etc.
You use dogma in a lazy way. Buying in to the relativist belief that nothing no matter how true and how many times proven can be universally true. You presume a failure in my explanation of what did happen without any demonstration of such failure. Of those that attempted to model the stock market, some where more right than others. The sore losers did appeal to a disinterested third party to re-pick winners and losers. The resultant force of individual decisions was correcting mistakes -made in a federally distorted market- when a not least governing third party decided to re-invest in the same poor investments. In freedom the brilliant and the dull are allowed to learn from their own mistakes and hopefully convert hard won wisdom into later sucess. All forms of regulation have some, often unintended and adverse, effect upon this.
Strictly speaking, least government is always best. The least necessary is dictated by the threat of more intrusive forms of government. You may as well ask how I could say illness is always unwanted, while taking innoculations. The compromise is thoughtfully made in each case, fully aware of the inherent risk of injecting a small amount of a neccessary evil, so that greater evils do not befall us. To speak of greater regulation in this time is to misunderstand eniterlly what has occurred and to continue a dangerous deferment of one's own responsibilties. The "game" is consensually made. Any regulation should be only protective of this consent. Such protection does already exist. Intervention of rule changers outside of the game, does only serve to bring in a new altogether too powerfull gamepiece, while removing more naturally evovled and dispersed sources of power. The gamesmen only need shift focus at such point, sending their best and brightest not toward winning the consumers consent, but the rule-makers favor. The consumer did not consent to any bailouts. Washington did.
mg,
In fact, I do believe in universal truths; however I do not think of these as dogmas. A dogma is a way of making sense of universal truths, an attempt to make it seem as if the (human) truth will/must represent itself in the same way every time. That is what I think does not happen.
As for free markets, there has never been one that is not framed by some kind of political order and this is just why asking into what kind of politics maximizes freedom makes sense.
The sore losers did appeal to a disinterested third party to re-pick winners and losers.
-that's not disinterested (picking winners and losers); the disinterested is like the referee allowing play to decide who wins, or like the judge deciding who is guilty against the system, or like the government man who takes a stand and does what is right/necessary even when it is not politically/career correct, or like the civil disobedient who puts his freedom on the line to demand the law be changed so that it becomes more truly disinterested.
The "game" is consensually made. Any regulation should be only protective of this consent. Such protection does already exist. Intervention of rule changers outside of the game, does only serve to bring in a new altogether too powerfull gamepiece, while removing more naturally evovled and dispersed sources of power.
-here is the crux of it for me; yes, the game is consensually made but i think this consensus is always eroding and being corrupted and needs ways - political events - by which it can be re-presented. As I see it, disinterested government (of the people) has a necessary role - but suely not the only role - in renewing that consensus by recognizing and institutionalizing it in various ways. The idea that any and all political intervention necessarily creates some unwelcome power, or that some silent non-political evolution is all we need, is not convincing to me. How can any consensus ever just "evolve" without periodic political ratification? Wouldn't any meaningful consensus have to be created in an event that broke with some pre-established order in a non-linear way?
As for the bailouts, I am against them too. But that's not to say I think the consumer is beyond reproach as the arbiter of the free market. Consumers can show themselves eminently corruptible too, by offers to game the system, as for example the recent "Cash for clunkers" demonstrates (literally destroying the market in cheap used cars, pulling demand forward in a "ponzi" like attitude towards keeping car companies going, taxing everyone for the benefit of a few, selling "green" political status to certain kinds of consumers). Now in this case, in the US, the corruption is coming with the help of government; in Canada, a similar program is much more the creation of auto dealers and environmental groups.
In any case, my point is simply that the consumer can act in ways that erode market freedom, by seeking interventions to serve some particular interest/rent seeking. Those who would counter this must inevitably put forth appropriate political interventions too. The default position that is always anti-government/ anti-politics is Utopian. Politics is so often corrupt but there can be no freedom without our periodic interventions in a constitution-bound politics. We need to protect the established law but also the spirit of the law that self-interest is always forgetting.
Of course the consumers, sellers, and other facilitators are subject to corruption. They should also be subject to correction. Ideally each participant should worry about their own interests, having them become a part of the corporate goal. Those that pretend to know, without consult, the interests of others can't help but get it wrong. Any appeal to an such a pretending authority does systemize and make rigid what is otherwise daily renewed. The entire process of obtaining raw materials, manufacturing, and distrubution isn't validated until completion of sale. Of course, when you've a supposed benevolent intervenioninst, then crushing products becomes more profitable than selling them.
The framework of freedom is the protection of volition. If guaranteed that each person is free to make their own decisions, what further political intervention is necessary? To act on a presumption, even when correct, to clearly know a better course for an individual is to eclipse that persons freedom. And the odds, are against knowing a persons problems more intimately than they.
The intervention that I put forth is against further interventions. We are already in an advanced state of regressive devolvemnt of personal responsibilty toward supposed benevolent authority.
I have no argument with the need for futher development of personal responsibility. I'm on side. But I guess the basic premise in my argument is that the further exercise of freedom necessarily entails greater, not lesser, conflict of desires; and this has to be mediated in some fashion if that freedom is to continue and not become the scapegoat for the control freaks who take conflict as an excuse to fetter freedom. We have the law, yes; but it cannot foresee all circumstances that the free exercise of individual desire will bring about. Not just the law, but its spirit must be renewed, i.e. the means by which we avoid turning on each other and looking for scapegoats. And that takes not just economic but political freedom, if we are to avoid a return to sacrificial violence as the solution to conflict...
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