Archive | February 4, 2010

Rand Unbound, Part 8

Over at Cato Unbound, the Rand symposium has wrapped up with posts from Neera, Doug, me, and a final one from Neera.

Pyramid of the Capitalist System

A quick reply to Neera’s last, on the pyramid of ability: I certainly don’t doubt that “in every area of human endeavor a few people stand out above others and benefit others much more than they are benefited by them,” and I agree that it “would be odd if this were not the case in business.” If that’s all that Rand meant by the pyramid of ability, I’d have no objection.

But at least much of the time Rand seems to assume that the pyramid of ability corresponds to the hierarchy of the firm, with the best decision-makers gravitating to the top – as when she says: “The standard of living of [a] blacksmith is all that your muscles are worth; the rest is a gift from Hank Rearden.”

Moreover, Rand seems to assume that this generalisation holds, not just under idealised laissez-faire but, at least approximately, in the state-hampered market we live in. And that in particular is a claim that I think we have much reason to reject, both on the basis of everyday experience of what the business world is like, and on the basis of a theoretical understanding of the likely effects of government intervention.

Rand would never suggest that the government bureaucrats regulating a particular industry are likely to be better decision-makers than the people being regulated; quite the contrary! But to the extent that the market is pervaded by governmental privilege in the ways that Kevin Carson et al. delineate, the likelihood that success within the market must be tracking superior performance likewise goes down.

Pyramid at Giza

While Neera grants that workers know more about their own jobs than the owners do, she insists that “the owners know more about their work than the people they regulate.” I think that, to a large extent, this is not true under conditions of actually-existing corporatist capitalism, for the same reason that it was not true of state-socialist bureaucrats regulating the economy in the Soviet Union.

In order to regulate your work, I may not need to understand it as well as you do, but there’s a certain minimum extent to which I need to understand it if my regulating is to be useful rather than counterproductive; and what I’m claiming is that under both state socialism and corporatist capitalism, there are governmentally-enabled structural mechanisms that both a) interfere with the transmission of information up the hierarchy, thus making it harder for bosses to find out about the work of those they’re regulating, and b) insulate bosses and boss-driven systems from the ordinary negative effects of lacking such information. In short, Kevin is simply applying to corporatist capitalism the same critique that Mises and Hayek applied to state socialism.

On a different point: I notice that in the comments section of a previous post here, Neera objects to my defense of the unity of virtue (where I suggested, following Alexander of Aphrodisias, that if I am cowardly then I cannot be completely just, since justice sometimes requires courage) by noting that I might conceivably be cowardly only in situations where justice is not at stake; but when it is, “it’s not necessary that my cowardice prevail; my justice might trump my cowardice.”


Here, though, Neera seems to be thinking of the unity of virtue as solely a thesis about motivation; but as I see it, it’s at least as much a thesis about the cognitive aspect of virtue (and thus a thesis about practical wisdom, to get back to another issue that Neera has rightly been stressing). (Actually, I think that, even more strongly, it’s a thesis about how the contents of the virtues are determined, in the metaphysical rather than the epistemic sense of “determined”; but I only need the cognitive point for now.)

In order for me to do the courageous thing in just those cases where justice demands it, I have to be able to identify what justice demands; but, I claim, the coward’s ability to do this is necessarily impaired, at least to some extent. As I put it in the piece I linked to:

I do not count as fully courageous unless I can be counted on to do the courageous thing in every situation, which in turn requires that I be a reliable assessor of which risks are worth taking; but which risks are worth taking might sometimes depend on the requirements of prudence, or justice, or loyalty; to the extent that I am imprudent, or unjust, or disloyal, I cannot be counted on to assess those risks properly in such possible or actual situations, and so I will not be fully just.

In other words, the problem is not just that the coward will see what justice requires but won’t be motivated to comply in cases where what’s required is risky, but that the coward’s confidence about even having identified what justice requires is to some extent ill-grounded, since cowardice itself exemplifies an inadequate responsiveness to what’s worth losing to gain what.

One more thing: I agree with Neera that Greek tragedies can offer good examples of cases where doing the right thing entails suffering for the doer, but I’m puzzled by her choice of Agamemnon’s sacrifice of Iphigeneia as an example, since that seems like a monstrously wicked choice rather than a virtuous one. I’d offer Antigone or Philoctetes as more plausible examples.

In addition, back on the pyramid-of-ability issue again, Bryan Caplan has another response to me here; once again I reply in the talkback.

Addendum: This response by Wendell Hoenir was just pointed out to me; I’ll comment on it later. Gotta prepare for class now!

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