Tuesday, September 14, 2010

Change - or more of the same?

Boyes writes of current administration tax policy as an example of the expansion of the state in society. Over the weekend I listened again to Vernon Smith on EconTalk discussing Rationality in Economics. Smith described the familiar dichotomy between two views or perspectives of the world - he calls these constructivism and ecological rationality. I tend to prefer Bill Easterly's description of planners v searchers but the analysis of perspective is, I think very important. As Sowell points out in A Conflict of Vision, underlying these 2 perspectives is a different set of assumptions about the world. Constructivists and planners have an unconstrained view of the world - that is with proper planning and thinking they can solve problems. Ecologial rationalists or searchers have a constrained vision of the world, that is they recognize scarcity.

Clearly these are fundamentally opposing views of the world and, as Vernon Smith points out, lead to radically different views of the state, individuals, freedom and responsibility.

Near the end of the podcast with Russ Roberts the following took place *(these are Roberts' notes)

Long trend in Western Civilization, especially among the intellectual elite, to argue that commercial activity is degrading, bad for the soul.

Are markets, or even the study of economics, degrading?

Do they destroy virtue?

Commercial enterprise in the human career has been just as important and valuable as the art and poetry enterprises. All reflect who we are and what we are as humans. Commercial enterprise is an engine of wealth creation that enables people to do art and music and all these intellectual activities. All remarkable examples of human ingenuity. Can't take one part away and say humans are better off.

Vernon Smith ends with, what is for me the most powerful argument in favor of ecological rationality, searching, emergent evolution or spontaneous order - freedom and liberty. Smith says it is this liberty and freedom that is the precious and essential ingredient in the human condition. As Boyes and I have observed, there is a tension or threat to this freedom from expansion of the state. Tax policy, regulation, and elite propoganda notwithstanding we see a greater threat to our freedoms from what Bob Higgs calls regime uncertainty. In yesterday's blog I referenced his recent comments about the threat posed by constructivists, planners, statists and the elite.

I am becoming convinced that it is this regime uncertainty that poses the greatest challenge to those who see liberty as the ultimate value.

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