Right Reason

Laws Are the Products of Convention

 

From Antiphon’s On Truth as quoted in the introduction of Thucydides’ The War of the Peloponnesians and the Athenians (edited by Jeremy Myrott):

Justice, therefore, consists in not violating the customary laws of the city in which one is a citizen. So a person takes most advantage for himself from ‘justice’ if he respects the important of the laws when witnesses are present, but follows nature in their absence. For the requirements of the law are discretionary but the requirements of nature are necessary; and the requirements of the law are by agreement and not natural, whereas the requirements of nature are natural and not by agreement. 

 

From Edmund Burke’s Reflections on the Revolution in France:

If civil society be the offspring of convention, that convention must be its law. That convention must limit and modify all the descriptions of constitution which are formed under it. Every sort of legislative, judicial, or executory power are its creatures. They can have no being in any other state of things; and how can any man claim, under the conventions of civil society, rights which do not so much suppose its existence? Rights which are absolutely repugnant to it?

 

The greatest political superstition of the modern era is the belief that laws are the creations of reason rather than of, as G.K. Chesterton called it, the democracy of the dead. Just as the creationist needs to postulate the existence of a creator transcendent to the world in order to make sense of its creative processes, so too does the modernist need to postulate the existence of minds transcendent to society in order to explain law. Both are happy stories about how the world isn’t run by chance or folly, but by intelligent beings able to think through what they’ve created, and both are wrong superstitions. 

 

Just as species are the haphazard creations of natural selection, so too are laws the product of selective forces operating beyond the understanding of the human mind. Furthermore, just like species, laws lack any special τέλος. It is very easy to think that a law against murder as existing to prevent people from murdering one another, but that’s like saying that a large ground finch has a robust beak for cracking nuts. 

It’s a statement which assumes the existence of a teleological goal which isn’t really there. Both statements don’t do much harm at the superficial level; however, as one examines the phenomena closer in depth, the assumption of teleology will be misleading. Just like the large ground finch’s beak, laws against killing have come about because they provide selective benefits to the societies that harbor those laws, which brings us to a very important point about law: that it’s focal.

 

Edmund Burke recognizes that when he talks about the conventional nature of society. The conventions are the focal standards of behavior which people observe, and their observation of those conventions creates a specific type of society depending on the constitution of that given convention. Laws are then the most sacred of those conventions which have worked their way into the very fabric of a society through generations facing the particular problems they are faced with, hence the democracy of the dead part. There is a democracy to tradition; unlike voting for representatives, though, tradition’s democracy demands much more of its voters than simply arriving to the booths, it demands people to vote for traditions by adopting ways of life. 

Those ways of life eventually become focal for people coordinating their behavior with one another. In essence, laws are nothing but long-standing customs. They are not, as the moderns would have us believe, the product of a spiritual force - reason, little more than a ghost in the machine - otherwise unconnected to the particular historical circumstances each society is faced with. 

 

Appreciating Edmund Burke

 

All men that are ruined, are ruined on the side of their natural propensity. 

-Edmund Burke, Letters on a Regicide Peace

 

In a recent episode of EconTalk, “Yuval Levin on Burke, Paine, and the Great Debate,” Russ Roberts talks to Levin on how the debate between Burke and Paine is a useful perspective to look at the left/right divide in politics. Whereas Paine emphasized the possibilities of human achievement if man were to be liberated from the political and cultural constraints around him, Burke emphasized how those political and cultural constraints made the human achievements worth celebrating possible. 

Paine’s optimistic portrayal of man’s ability to make a world for himself was echoed in Common Sense when he wrote: “We have every opportunity and every encouragement before us, to form the noblest purest constitution on the face of the earth. We have it in our power to begin the world over again.” Burke’s attitude is summarized in the following passage from Reflections on the Revolution in France: “I cannot conceive how any man can have brought himself to that pitch of presumption, to consider his country as nothing but carte blanche, upon which he may scribble whatever he pleases… but a good patriot, and a true politician, always considers how to make the most of the existing material of his country.” The two could be almost no more opposed about how they think about how the constraints upon human beings have influenced human prosperity.

 

 Myself, I have great enthusiasm for Burke. Nevertheless, I don’t think that the debate between Burke and Pain, or even just Burke’s critique of Enlightenment thought, is as important as thinking about the proper way to look at classical liberalism. Burke is unfairly branded as a conservative critic of liberalism, but really he is one of its staunchest defenders against the excesses of Enlightenment thought. Burke recognized the important of historical context to the flowering of liberty and we should not brand him as a conservative merely for that fact. Reflections on the Revolution in France was one of the books that converted me away from a Rothbardian perspective on politics. Although Murray Rothbard is excellent in how we sets up his definition of liberty and what follows from that definition, he is much less excellent in describing instances of liberty in the actual world. 

In his Second Speech on Coniliation with the Colonies,” Burke expressed the necessary historical context of liberalism when he wrote that “Abstract liberty, like other mere abstractions, does not exist.  Liberty inheres in some sensible object; and every nation has formed to itself some favourite point, which by way of eminence becomes the criterion of their happiness.” When talking about the colonists’ desire for freedom, he didn’t do it from the point of view of Enlightenment though, as Paine had done in Common Sense; instead, he discussed them as the descendants of Englishmen desiring the freedom which Englishmen had become accustomed for. Burke’s dislike for purely abstract statements is emphasized in the second letter of his Letters on a Regicide Peace, when he wrote about the “hocus-pocus of abstraction.”

 

Burke was careful in positioning himself as an opponent of the arbitrary construction of liberty. He argued that the fulfillment of liberal desires weren’t to be found in destroying what came before and erecting a new nation from the ashes, but in taking what was best from a nation’s past and using that as the basis for the future. 

When comparing the Glorious Revolution of 1688 to the French Revolution then occurring, Burke differentiated the ideals of the Glorious Revolution with that of the French, writing: “The very idea of the fabrication of a new government, is enough to fill us with disgust and horror. We wished at the period of the Revolution, and do now wish, to derive all we possess as an inheritance from our forefathers.” For Burke, the only sustainable liberal civilization was one that had developed liberal traditions over a long period of time. Whereas Burke pointed to Magna Carta, and English common law as evidence for the historical origin of English liberty, he pointed to the excessively metaphysical characteristics of the Rights on Man as evidence that the French Revolution was an exercise in hocus-pocus liberalism. 

Edmund Burke shall always be a challenging figure for some because of how he emphasized that we are all tied to the histories of our nations and how he emphasized that man is a fallen creature who succeeds largely because of the constraints put on his desires by tradition. Whereas other Enlightenment figures, like Thomas Paine, presented an optimistic view of humanity which held that humanity could achieve great things if only the chains of the past were broken asunder, Burke took the line that the great things that humanity has done is because of our history, our traditions and sources of authority, not in spite of them. 

 

Since he was critical of French Enlightenment thought, Burke has been viewed to be a conservative critic of the Enlightenment perspective on politics, but that judgment is faulty because Burke is no conservative. In the Reflections, Burke went as far to say that a nation that couldn’t change had no means of sustaining itself. In both the Reflections and his impeachment speeches, Burke doesn’t look at tradition as something monolithic and as something sacred per se; instead, Burke wrote about how tradition is necessary for the organization of human society and how good traditions can be used to promote good outcomes. The Glorious Revolution, because it built upon what was already good in the English traditions of common law, representative government, and Magna Carta in order to promote liberty whereas the French Revolution tore down the monarch and replaced it with metaphysical hocus pocus. Even though Burke was critical of the Enlightenment, he was still a champion of liberty. Moreover, he was champion of liberty within its proper historical perspective. 

Burke is and ever shall be one of the most eloquent defenders of a liberal civilization. He challenges us to think about the liberal civilization within the context of human events rather than metaphysical doctrines. Thomas Paine may teach us much about recognizing the form of liberty, but he falls prey victim to what Hayek called constructivist rationalism: An overconfidence is the constructive capabilities of reason based on the delusion that all the necessary facts to construct a new order are available. Pain was wrong about the course that the French Revolution would take. It wasn’t a flowering of American-style liberty in Europe, but rather a movement that would eventually cannibalize itself. 

Burke can help us understand how liberty has evolved, and how the liberal civilization cannot simply be constructed, but must instead be grown. Unlike Paine, he understood that a liberal civilization is grown, not constructed. It is a product of a peculiar historical context rather than a product of the brilliance of the human mind.  

Crony Capitalism: A Problem of the Government's Making

 

We shouldn't be surprised.

 

This is certainly a problem, but its solution is not that the government and its officials need to involve themselves in the economy in order to take down massive companies and vested interests within the economy, the problem is that the government allows them to continue to thrive. The most pertinent example of this is how the United States has saved massive banks on Wall Street from their doom despite the questionable practices and foolish investments the banks made. Most recently it was TARP, but in the 1990s it was the rescue of American creditors when the Clinton Administration granted the Mexican government a $20 bn loan and the rescue of Long-Term Capital Management with a $3.8 bn bail-out from Greenspan's Federal Reserve.

 

Losses and failure are the natural mechanisms that force organizations that no longer serve people's most urgent demands to go out of business. They are the forces that make it possible for new ideas and new ways of going about business to rise to the top for it ensures that those who are doing things right don't have to persuade those who are doing things wrong. Instead, they merely have to wait for those who are doings things wrong to go out of business. Though profits certainly have a more prominent role in the functioning of a free-market economy than losses do in the popular mindset, losses play just as important a role. Just as profits reward those companies that are servicing the demands of consumers and provide incentives for others to imitate the practices of the profit-making firms, so losses punish those that don't and provide others an incentive not to use their practices.

When the government jumps in to prevent firms from taking staggering losses and prevents them from going out of business, they are disrupting the proper workings of the markets just as when they prevent firms from making profits. Companies that are making a loss must go out of business lest the scarce resources within society be committed towards uses that do not produce the goods demanded by consumers. In addition, whereas the failure of those companies would have provided an opportunity for companies with new ideas to take the place of those that failed with an incentive to try new approaches and to allocate their scarce resources in a different fashion than failed companies, the rescue of those companies by the government just serves to bolster business practices that are not in conformance with people's desires. It should come to no surprise to us just how dysfunctional American banking has been over the past decade when we keep in mind that the banks leading those practices have been bail-out whether by the Federal government or by the Federal Reserve. When the stakes are tail I win, heads I loose nothing (and still leave with a lot), there is no reason not to take the bet.

 

Crony capitalism is certainly a problem in the United States as well as the entire world at large. However, it is not a crisis of capitalism; it is the foreseeable consequence of the government interfering with the workings of an organic system that is governed by its own abstract principles. Even the issue of money in politics, often the subject of much tearing of garments by modern progressives, is so obviously a consequence of a businessman's ability to influence the government yielding him profit. When the government does things like diverting funds from TARP in order to benefit Detroit car-makers or when a Federal bureau can prevent Boeing from moving production from one state of the union to another, it pays dividends to have influence within politics. The decried phenomenon of money in politics is then just a natural result of when political decisions can influence the path resources take within the economy.

The answer to all of this is not for the government to take a harder stance against crony capitalists; to the contrary, it is for the government to stop producing the environment in which crony capitalists thrive. The government needs to be an impartial spectator to the day-to-day affairs of the American economy. It needs to allow companies, even companies as important to America's past as General Motors, to fail and it needs to allow those captains of industry that have made bad decisions to harvest their crop of losses. After all, there is another captain waiting to take the wheel, this time with new ideas. Only then will it no longer be profitable for businesses to invest in favor from the government and only then will the problems of crony capitalism within the American economy be mitigated.