The False Dilemma

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Current, conventional thinking about social, political and economic subjects typically narrows the options available to a set of policies advocated by two, may be three political parties or scarcely dissimilar ideologies. Consequently any genuine radical or lateral thinking about these topics is abandoned and it is assumed and accepted that the fundamental questions of the state, the government, and of tackling the biggest societal problems of the day are already settled. Seldom are alternatives to these entrenched matters – such as whether the state should have any positive role at all in anything – given the light of day, let alone the opportunity of being debated. This phenomenon, which presents a distinct challenge to libertarians, is known as the “false dilemma” – the illusion that the only choice is between a very constricted range of possible options, preserving the status quo in favour of the state and its cronies while at the same time bestowing the illusion of control on a gullible electorate.

In the UK the “false dilemma” is playing itself out in such a way as to completely obliterate one of the basic truths (understood by Austro-Libertarians) that all humans can flourish and co-exist peacefully. Those on the ideological right such as supporters of the Conservative Party believe that business should be helped in order to boost economic growth, while cuts should be made to welfare and to public services in order reduce the government “deficit” (a much overused term given that the overall debt and not the deficit is the real problem) and to slim down the cash cow that the benefits system has become to the allegedly lazy and unproductive. Those of the ideological left believe that a strong welfare state, heavy taxes on the wealthy and increased government spending are needed to end the scourge of poverty. Both of these ideologies contain kernels of truth and genuine, honourable concerns that make their particular preoccupations seem plausible. It is true, for instance, that business needs to flourish if there is to be any economic progress at all, and that government needs to reduce its profligate borrowing, taxing and wasting with all due haste. On the other hand, it does not seem fair that a society should allegedly produce vast wealth for a few while leaving others to languish in stagnating poverty, nor is it necessarily true that wealth creation is “top-down”. The continuing result of this for UK politics seems to be that political action is becoming a choice, or a very false dilemma, between two broadly defined groups of people in society – a choice between those who are “rich” and those who are “poor”.

This impression is exacerbated by the fact that the political parties whose rhetoric represents these ideologies never achieve their aims, or never really carry them out. “Austerity” is proving not to boost economic growth nor help the plight of the poor simply because government spending is not, in fact, decreasing. Bank bailouts and cartelisation of businesses will not do the same either as they simply perpetuate malinvestment and economic waste. They do, however, save the politically connected rich from the consequences of their actions while leaving everyone else to foot the bill. On the other side, increased government spending and a burgeoning welfare state only siphon funds from the productive sector to be consumed and wasted by government. Both sides, therefore, in failing to ever be able to achieve their stated aims provide plenty of ammunition for the opposition, ammunition that is fuelling this apparent basic choice between “rich” and “poor”.

If we are ever to have any hope of recovery from the current economic malaise we must seek for a repudiation of this false choice and a restoration of the understanding that both economically and ethically the rich and poor can prosper side by side. At the heart of the problem, the false axiom accepted by each ideology, is the notion that government must help somebody in order to create a better society. There is curious mixture of economic and ethical arguments that are used in order for each side to select whom government should help and to whom it should deny the same. Take, for example, the supporters of big business. They will say that it is right to use taxpayers’ money to bail out the banks in order to avoid a complete financial meltdown. Conveniently “their chums” in the city will reap fat rewards from doing so. But they then deny this very same method – the diversion of taxpayers’ money – to welfare programmes to help the poor because people should work for what they earn without leeching from the productive and the so-called “benefits scroungers” should get off their backsides and find a job. In other words they are using primarily economic arguments to justify bank bailouts while using ethical ones to deny welfare spending. Their “lefty” opponents will argue that throwing cash at the rich who made mistakes is unjust and that they should be left to foot the bill for their own mistakes. Yet they then state that welfare spending is needed to eliminate poverty and fuel growth from the “bottom up”. So they too, deny the flowing of taxpayer’s cash to certain groups based on ethical grounds but then promote it to others based on economic grounds. Each side, will of course, pepper their ethical arguments with economic ones and vice versa – the right, for example, will, as we have said, argue that welfare spending needs to be cut in order to reduce government outlays, and the left will argue that alleviating poverty is a just and noble cause. But the main thrust of each side’s opinion cannot be denied.

If we unscramble all of this and look at the ethical and economic arguments separately we will find that there are no grounds whatsoever for any state involvement. If it is unjust to violently confiscate tax revenue from innocent citizens to fund the lifestyle of bamboozling bankers then it is equally unjust to do the same to fund the lifestyles of those who are poorer. The difference is one of degree rather than of kind. Nobody, whether he is a prince or a pauper, a saint or a sadist, or a capitalist or a labourer has the right to wrestle away the property of other people for his own benefit. And from the economic side, bailing out bad business will simply perpetuate the moral hazards and malinvestments that need to be eliminated, while continuously funding the poor through welfare spending will only exacerbate poverty as it makes being poor relatively more attractive, reducing any incentive for people to do more to lift themselves out of that position, while squeezing the role of benevolence and charity for the genuinely needy. Furthermore, government would do a lot more for the poor if it stopped interfering in wealth creation in the first place with all of its burdensome laws and regulations that make the exercise impossible but for a few large and politically connected corporate favourites.

The real choice is not between “rich” and “poor”, “left” or “right”, “Conservative” or “Labour” “employer” and “employee”, and whatever other faux selection that the establishment throws at us. The real choice we have to face is, on the one hand, whether we want to continue with a political and economic system that, whomever’s interests the particular delegates of the day purport to promote, will only result in a parasitic existence for the politically connected at the expense of the stagnation of the standard of living for the rest of us. Or, on the other hand, we could choose a system where nobody has the violently enforceable right to live at the expense of everyone else and that everyone is free to trade and produce whatever he wants with his property, a system that will raise the standard of living for everyone and not just a select few. Only by considering radical options and overcoming the assumption and acceptance that the fundamentals of our society are beyond debate can we hope to build a world that is both truly just and economically prosperous.

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Natural Selection, Capitalism and Government Intervention

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The Oxford Libertarian Society, after a brief hiatus, has recently launched its “Hayek Discussion Group”, which seeks to “encourage graduate students and scholars alike to submit abstracts. We are looking for interesting and innovative works which challenge the contemporary thinking about how society should be ordered”. Below is the first submission offered by Justin E Lane, D.Phil. student in the Institute of Cognitive and Evolutionary Anthropology, University of Oxford, followed by some comments.

Topic: “Evolution and governmental policies: How the process of natural selection can serve as a basis for fiscal policy.”

Abstract: Many scientific theories can, and have, been used to inform political thought. I would like to propose that evolution by natural selection can inform the formation of policies in capitalist economies. As the basis for this argument, I would defend that capitalist free markets are the most “well-suited” or “natural” forms of economies as they are operational analogies to natural processes. This knowledge of evolution can be particularly informative in discussions of authority and law, but this discussion will concentrate on its theoretical application to the idea of “the free market” and how, if left alone, it will act in a naturally selective manner not unlike evolutionary processes in the animal kingdoms. I would also like to raise the question, when-or if-, it is appropriate for governmental bodies to ever step in to guide this process in a more controlled selection process. In conclusion, the interplay between fiscal policy –including energy policy and resource allocation- inform national security interests and how a similar foundation can begin to inform these issues as well.

Given that Lane has not had a chance to fully elaborate these thoughts it is appropriate that the initial comments are relatively brief. Unfortunately brevity cannot mask the flaws in this attempt to justify capitalism.

At the foundation of the capitalist economy is the individual human, the being that desires, chooses and acts. He is conscious, thinking, discriminating, preferring, reasoning and the content of all of these aspects in his mind can change from one minute – nay, one second – to the next. Indeed, the processes of production, trade, consumption, saving and investment are all synonymous with progress, that they are entered because the acting individual views the result as a greater or more valuable thing than what existed before.

Natural processes, however, lack all of these features. They are purposeless, occurring and repeating while being empty of any desire or conscious thought behind them. There is no achievement or progress in moving from one stage to the next, and there is no one to say that the latter stages are any “better” than the original. Events may be regular, they may be measurable and they may be predictable or non-random but they are neither valuable nor achieving anything.

Evolution is precisely one of these inherently purposeless processes. It is neither “good” nor “bad” that natural selection occurs; it is merely an unconscious unfolding of events initiated by unmotivated influences. It doesn’t lead to anything “better” or “higher” than what proceeded before – it takes a desiring, choosing, acting human to determine this. Selection in the market economy is therefore entirely unlike natural selection – it is the result of choices motivated by desires, to achieve something that is inherently better than what preceded it.

Any justification, therefore, of a capitalist economy that relies on its alleged process of “natural selection” simply raises the question why should we desire the outcomes of these selections? Why are these outcomes “better” than any other and for whom are they better? In short, the theory presented in this abstract merely restates the very starting point of political discourse – is individual, uncoerced action “better” than action coerced by the state? This is a question that Lane, in his penultimate sentence, appears to introduce as a mere secondary issue when in reality it is the crux of the entirety of political philosophy; indeed, his position is akin to that of an historian who says “Oh I would also like to look at what happened in the past”. As he provides no justifiable answer whatsoever to the all-important issue we are very firmly still at square one.

Lane’s second error lies in the belief that scientific theories may legitimately inform political thought. If it is accepted that theories applicable to unconscious, purposeless matter are also applicable to thinking, desiring, choosing and acting humans then one accepts that other such theories and analogies may, in principle, be valid. Hence, as Lane’s abstract provides us with no reason to accept the contrary, why should they not be tried and tested?

It is the opening of the Pandora’s Box of such positivist methodology that has led to some of the most horrific and overwhelming conquests of the individual by the state. Not only did the Communist experiment in the former USSR take an eye-wateringly drawn out seventy years to be “proven” false at the cost of tens of millions of lives, but we are continuingly plagued by constant testing and tampering by so-called economists who, in their hubristic ignorance of the correct methodology for their science, continually expect the results of their interjections into human behaviour to be qualitatively and quantitatively inline with their hypotheses. And if not then why not just adjust it slightly and try again and again and again until something “works”?

Perhaps Lane is scratching the surface of a natural law justification for private property and free enterprise – that the free market is the only way that an individual can truly flourish according to his nature? May be so, but his way of describing it in the abstract is, at best, confused and, at worst, simply incorrect. If he wishes to proceed with justifying capitalism in the same vein then he should call for a swift denouncement of positivism and any analogising of the market economy to scientific or “natural” processes and turn his attention instead directly to the natural law tradition.

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