Current Reading

This blog is primarily for me to blog my responses to books that I'm reading. Sometimes I blog about other stuff too, though.

Word cloud

Word cloud

Monday, July 10, 2017

Hayek, Chapter 9

Having talked about the difficulty in getting people to see emergent order in chapter 8, in chapter 9 he talks about the belief in the superiority of planning over emergent order.  This is definitely a thing, especially among the educated classes.  I find it funny that technocratic liberals also tend to like "natural" food.  It's generally believed that if there is emergent order in an institution then there must be missed opportunities, because resources are not being directed.

On the other hand, I'm not sure how modern this is.  Central authorities have always banged their heads against emergent orders, determined to rule rather than go with the flow.  I doubt that they put it in the same technocratic language as their modern counterparts, but the ability to let go and steer on the margins has never been a strong suit of rulers.

Sadly, this chapter is somewhat jumbled (he took the opposition to planning a bit too literally), and not always well-argued.  Steps and connections are left out.  I did manage to parse out, eventually, what he meant when he talked about people trying to plan the progress of the human mind:  I don't think he was talking about engineering the human mind like geneticists in Orphan Black, but rather plans for scientific discoveries, technological progress, and the progression of ideas in other scholarly endeavors.  The problem is that you can't plan where you will go when you engage with the unknown.  Things almost always turn out to be harder than you planned, and sometimes serendipity happens.  Hayek's point was that if we knew what we could/would discover next then we would have already made the discovery, so there's a logical impossibility.  I just wish he had organized his thoughts more clearly.

After arguing that, Hayek quickly leaps to arguing against the idea that truth is not determined by deduction from observations, but from hidden causes which have determined the thinker's conclusions, and thus truth or falsehood can depend on the social position (race, class, etc.) of the person making the argument. It seems that he's arguing against ideas of implicit bias, but I don't really see how he got there from his previous point, unless he's making a very subtle argument against the idea that all of our knowledge is already in our minds (hence the possibility of planning) but some of it is fake (hence the possibility of bias or distortion).  It's a big leap of the argument.

Also, while I have no doubt that modern political correctness has plenty of antecedents (remember, one of the main themes of this blog is that all of this has happened before and will happen again), I'm mildly surprised that 1952 had substantial numbers of people arguing that implicit bias is a huge thing, or that the privileged cannot know certain things.  I suppose it's possible that the Marxists might have made the second point (I don't know, I'm just speculating) but that's the sort of argument that could easily be wielded by peasants against planners.  (Unless he's arguing against the idea that only the top of the ladder has the proper perspective.)

Near the end of this chapter, Hayek does offer one point that I like very, very much:  It is dangerous when people abandon religion but see no reason to submit to anything that they do not rationally understand. If people respect neither God nor arbitrary moral codes (and ultimately all "ought" statements are rooted in assertions rather than logic, a point that I spent this afternoon making to a colleague) then they could engage in great hubris.  If this comes at the same point in historical evolution as the rise of great technological capabilities (e.g. nuclear weapons) and a belief in the superiority of planning over emergent order then the unguided might create upheavals that lead to disaster.

I think we have the nuclear genie more-or-less controlled (arguably less, right now, with North Korea rattling the saber) but in higher ed I think we have undermined too many principles, leaving only short-term thought about individual selfishness.  Hayek might be greatly sympathetic to the good that can emerge from selfishness in market economies (and I am, as well) but institutions need rules (even for-profit companies require a certain amount of coordinated sacrifice for greater benefit down the road--it's the whole concept of investment in a project that involves more than one person!), and non-profit educational institutions supposedly offer a chance be supported while indulging one's passions via creative pursuits, in exchange for work that benefits students.  However, when the concept of duty collapses, when the quasi-monastic sacrifice inherent in academic work is regarded as an oppressive norm feasible only for men of a certain class and era, when pervasive and unfair bias is seen as driving every decision, then what is left but short-term selfishness?

Hayek, as a man of ideas, is less of a capitalist than he'd ever admit.  He wanted people to submit to duty and purpose without a clear answer to "Why do I have to listen and what is in it for me?"

2 comments:

Neelakantan Krishnaswami said...

Hi Alex, long time no see!

Unfortunately, Hayek was more or less totally wrong about planning.

IMO, a great deal of what is wrong with the modern world arises from the unfortunate fact that central planning is tremendously more efficient than an emergent order. Basically, centralization lets you overcome the prisoner's dilemma, and the systemic gains from cooperation are so large that centralized regimes have the resources to easily overwhelm the commons -- even granting the selfishness, short-sightedness, and greed of the centralizers. (Minus my moralizing, this is dubbed "the price of anarchy" in the game theory literature.)

We see this even in our day to day life on the Internet: eg, blogging has largely been supplanted by things like Facebook and Twitter, which are run as gigantic centralized services. Now, info-feudalism absolutely sucks a lot, since it has facilitated a truly horrible level of corporate and government surveillance, but the economic gravity in its favor is very, very strong.

As a concrete example, Facebook spends vastly less on electricity than a distributed network of individually-owned servers would, since FB can afford to do things like run their system on custom-designed hardware in custom-designed buildings with specialized whole-systems thermal engineering, and put the building right next to a powerplant to minimize transmission losses. (And that degree of power engineering is basically table stakes for the big cloud vendors.)

Alex Small said...

Good to see you, Neel!

Certainly there are efficiency gains from integrating many types of activities together, and gains from scale in certain types of activities. That is demonstrably true in the examples you note, and in the competitive advantages of big corporations. I don't think we should completely discount state favors to corporations, but there are enough examples of it in enough contexts to make it clear that--at least in some cases--there are gains from scale.

That's different from central planning by public authorities, because ultimately the profit and loss signals are still internal to Facebook or whoever. They don't need to go to another authority, who's responding to other types of signals, if a given server farm turns out to not save money like they were hoping. A lot of the efficiency comes from decoupling from the political system. In that sense, central planning is still inefficient.

Unfortunately, the efficiency of activities decoupled from politics is a double-edged sword. You can get your energy efficiency, your lower costs, etc. You also get disregard for other considerations. Which is often a good thing--who wants to only buy furniture made in Congressional districts targeted for development?--but also a bad thing when it runs head-first into privacy and liberty concerns.

Everyone wants to believe in a magic solution. Some want to believe that "the right type of" elected official can protect liberty. Well, maybe by definition that is true, but who said that "the right type of" official will get elected or re-elected? Some want to believe that The Market will protect liberty. Well, sometimes--I'd take America over Venezuelal any day--but disparaities between big and small players are real. Some want to believe that there are Best Practices, and maybe there are, but who says that the guy running the workshop is promoting practices that are _actually_ best? And best for whom?

Finally, where Hayek was completely wrong was in believing that the regulatory state must turn into Eastern Europe. It didn't happen. There are threats to freedom in our mixed economy, but not of the type that he envisioned. They often come from corporate-state entanglements where the corporations retain some real autonomy and agency in the deal.