Invisible Hands and Incantations: The Mystification of State Power

0:00I've known our next speaker all my life. I first got to know him when I achieved self-consciousness. My paper is called Invisible Hands and Incantations, The Mystification of State Power. I'm not going to read it really, or at least not much of it. I don't have copies to hand out, but if you want a copy, just Google Molinari Society and it's on the site there. The topic of the paper is ways in which the state or government system is held up and maintained by spontaneous order. So like Charles, I'm talking about a malign spontaneous order. I have in mind primarily spontaneous in the sense of unplanned, not actions that maintain a state order without intending to. Though I think to some extent the other two are relevant as well, the polycentric, and even to some extent, the uncoerced, in the familiar sense that a state can't maintain power by violence alone, so there have to be mechanisms by which people gain incentives to maintain the state without intending to.

1:14By the state system, I understand the system of something like what's known as corporatism, A big government, big business partnership, as I interpret, and I'm not going to argue for this here and now, but there's more in the paper and citations. I think that most public government policies that are promoted as anti-big business actually tend to support the big business, big government partnership. Most policies that are promoted as anti-big government do the same. There are some differences. You know, right-wing status and left-wing status have things to disagree about, but it's mostly squabbles over the spoils. But in order for the system to work, in order for people to, you know, be persuaded to support a system of big government, big business partnership against People, where the left-wing and right-wing factions are only doing slightly different variations of the same thing. You can't sell that to the people. So you have to promote it in a way that makes it less obvious. So left-wing status corporatist policies have

2:34to be marketed as protecting ordinary people against big business. The right-wing versions have to be marketed as protecting people against big government and I think that's what we see. But I don't think that it all has to be done consciously. Now I think a lot of it is done consciously. I think there's lots of conscious effort that goes into maintaining the state system. Lots of conscious collusion. In fact, stuff I wouldn't even call conspiracies because a lot of it is done quite openly but nevertheless conscious. However, I think there There are good reasons to expect invisible hand mechanisms to be at work as well. For one thing, a system is going to be more stable to the extent that the people who are running the system can somehow persuade themselves that what they are doing is virtuous. And therefore, it has got to be the case that in order for the system to work stably, there have got to be incentives to move people into thinking of themselves as doing something

3:32And also we have to explain not just what leads the people in the ruling classes to cooperate with each other, but also what leads the ruled to cooperate, since the system doesn't work unless they cooperate as well. So we have to explain how those on power on the one hand, and on the other people who support them, including journalists and educators and so forth, how they can be persuaded to support a big business, big government partnership, Well, not necessarily all of them realizing it. One way that this works is simply the ratchet effect of the need to, the perceived need for government to do something about a crisis. And think about, you know, the current airline security thing where every time there's a new threat, new policies are developed to deal with that threat, then when something else comes along, so oh, so someone tries to set their shoes on fire and so you, you

4:59to Legislate in the Interest of the Corporate Elite. I think it's only to be expected given that things that harm the corporate elite will get noticed, will get attention, and the rich have the ability to lobby government so forth and the poor are more disfused and dispersed and less able to do it. Also, I don't think that we have to assume that the corporations that are lobbying government are all in favor of statism. They might just be in favor of free markets for everyone but themselves, but each one want some special privilege for themselves, and the natural result of that will be statism for everybody. Likewise, I think you don't have to assume the conscious desire to prop up the system in journalists. All you have to assume is that journalists want to get important stories, and the way to get important stories is to get access to the people who produce them.

5:51And if you have a conception of what's important is who is in the command post of your society, is nothing necessarily that you decide, all right, I'm not going to rock the boat because I want access, it's just that the ones who do decide to rock the boat just don't get the access and so the ones who are willing otherwise will get the access. Also a certain conception of objectivity where one of my favorite examples is waterboarding was always referred to as torture in American newspapers until it became a policy of the US government, official policy, Policy, and then at that point they stopped referring to it as torture because at that point it becomes controversial whether it's torture. And if you want to be objective you don't take a stand on things that are controversial. But of course what's determined as controversial is based on these assumptions about whose opinions count. There's also kind of ideological and the mystification going on, where no matter how many special favors liberal politicians

6:57hand out to big business, they continue to be perceived as anti-big business. No matter how much government grows under conservative politicians, they continue to be perceived as anti-big government. What is it that maintains this strange kind of illusion in power? Well, in Thomas Kuhn's Structure of Scientific Revolutions, he describes experiments where people had a hard time seeing things that clashed with their existing categories. Here are examples of flashing very quickly playing cards of people where they'd be anomalous, it would be a red Ace of Spades or a black Three of Hearts or whatever. And if you flash them very quickly, people just automatically identify it as one of the familiar ones. We show them a black three of hearts and they'll either say it's a three of spades or it's a red hearts or whatever.

7:47And even when you do it more slowly, often they have a really hard time seeing, even when they go and say something's amiss, they can't tell what. Kuhn also gives the example of how Aristotelians and Galileans both saw pendulums but they disagreed about what essentially was going on. To the Aristotelians, it looked like what the main thing is going on is the rock is trying The Galileans saw it as something that's trying to go back and forth, I mean don't take the teleological language literally there, but the essential thing is the extent to which it goes back and forth and the fact that it eventually slows down is a friction phenomenon. So if you have a certain view that something is essential, then other things will be dismissed as not essential, not part of it.

8:34How does it come about, though? What makes it possible for people to think that conservatives are pro-free market, for example? Well, it's because I think there's a certain layer of primary regulations that are in place that both liberals and conservatives tend to favor. And then there's another layer of secondary regulations on top of those, to some extent are designed to go against the first ones, or at least to give the appearance of doing so and liberals tend to favor those and conservatives don't and so conservatives will be seen as anti-regulation because they favor, you know, so they favor giving a special privilege to some corporation but then not restricting how it eases the privilege and that's not really a free market thing. Whereas the basic primary regulations, those just become part of the background to become invisible.

9:31Also, I think there's a sense in which there's a tendency for people not to see government decisions as violent. They see it as somehow they often think of doing something through government as an alternative to doing it through violence. They'll say, well, we don't want to go through violence. It's through this peaceful process of legislation as though there's some sort of incantation to produce the result without any violence. And I think There are reasons for the kind of cognitive dissonance that gets into that. One reason is people are reluctant to recognize as, against their moral principles, something to think of as necessary. So if you think that government is necessary, but you also think that you believe in general moral principles, you shouldn't go around imposing your will on others, then you're going to be reluctant to see governments doing that. And so you're going to try and interpret the government as somehow doing something different. But that pushes it back.

10:30What leads to people seeing government as necessary, and I've suggested several reasons here toward the end. One is when Hayek identifies constructivist rationalism. One of the cues whereby we recognize the presence of intention is order. When we see order, we expect some order or some kind of intention there. And so therefore, if we want social order, it's natural for us to think in terms of Another reason is that smarter organisms have longer childhoods because they don't have as much pre-built into them by instinct, because they have to have room on their disk to learn stuff, as it were. That's great, but it means that we spend a long time being cultured to being children and having parents taking care of us, and so we develop a kind of need for that.

11:19Another one is Bastiat's whole idea of the distinction between the seen and the unseen. The Theory of Money and Credit

11:53The Good News is, Kuhn says, if you want to change the world, you have to change the world. But I also suggest, at the end, that given that spontaneous order, that is to say, unplanned spontaneous mechanisms play such a large role in maintaining the state and power, that means you don't necessarily have to seize control of the state to get rid of these problems. He said you have to work with these spontaneous orders, work through educating people to direct their attention to these things. The good news is, Kuhn says, if you draw the person's attention to the playing card enough, they'll finally recognize that it's a red three of spades or whatever, and so I think a lot of libertarian propaganda should be to do that.

12:38So that's all for me. We actually have three commentators because David Gordon, although he has not sent himself in the flesh, he has sent some comments and I went through my paper Charles Johnson has two principal goals in his excellent paper. First, I mean by first what is conceptually prior in the paper, rather than what is first discussed there. Once he endeavors to clarify the concept of spontaneous order, once he's cleared up the ambiguities in the concept, he applies it to Susan Brown-Miller's account of rape, which in her view plays a crucial role in bringing about the domination and exploitation of women by men.

13:33In the first of these goals, he seems to be entirely successful. His account of three meanings of spontaneous order, namely consensual, polycentric and emergent, greatly clarifies a confused literature, and as he shows, many famous names, the Chasse and Hayek among them, have tripped up here. I am grateful to learn that in a paper I had long forgotten I called attention to one of these confusions. Charles's full version of the paper is a footnote to David Gordon. Johnson also rightly notes that the distinctions among these kinds of orders are differences of degree with many intermediate shades and borderline cases rather than clean categorical breaks. I would add, if this is not identical to Johnson's point, that the same order may be spontaneous under one description and not under another. People may, for example, establish Johnson also seems to me to be successful in his second goal. He uses the notion of Johnson does not attempt a full-scale defense of Brown-Miller's theory, though it is evident he thinks there is a great deal to be said in its favor. I find myself unable to agree

15:04with him, although my reaction may well stem from insufficient acquaintance with her account and the literature it has generated. To me the theory has little to recommend it, at at least if it is intended as an account of contemporary American society. In setting forward the critical remarks that follow, I may be unfair to Johnson, as I am attacking a point he did not attempt to defend, but I have done so in large part because I would value highly a response to what seems to be an evident weakness in Brown-Willer's theory. Johnson devotes some time to discussing studies that show rape or physical battering is widespread, but he does not present any evidence for a crucial part of Brown-Willer's theory. In her view, women's fear of rape leads them to seek male protection, the price of which is to submit to male dominance. For this mechanism to operate, it must be the case that women fear being raped. But why should we believe this? Obviously, I do not mean to question

15:53that to rape someone is to inflict upon her an unterrible indignity. But it does not follow from this manifest fact that most women live in fear that this calamity will befall them. An analogy may, I hope, clarify this point. It is likely that many of us will at some Roderick Long is also, in his outstanding paper, argued for two main contentions. He He first presents a picture of the form of state system that prevails in modern industrial society. Having done so, he endeavors with characteristic ingenuity to show why most people fail to grasp the nature of the system and in fact have grossly inaccurate views of it. I would like to suggest an additional reason to those so ably canvassed by Long why people fail to adopt Long's account of the true nature of the state system. The reason is that his account is not fully correct. He begins from an undoubted fact which well deserves the emphasis he gives it. He notes that the government and modern industrialized societies

17:15grant special privileges to big business. Many regulations presented to the public as measures to protect consumers serve rather to entrench special privileges. Readers of Rothbard will not be surprised by any of this and Long shows a commanding knowledge of literature I will draw on this topic as a glance at a second footnote will show. Where I differ from him is on the consequence he draws from this point. He views businesses privileged by the state system as part of the state system. The issue at stake here is more than semantic. If all it long means here is that the government grants business privileges and that business interests often dominate the government, there would be little point to saying that I prefer to avoid his choice of words to describe the situation. But I take him to mean much more than this. Under the state system, prices are no longer established through market competition. Rather, we have a situation where powerful corporations control monopolistic or oligopolistic markets.

18:06The wages of labor depend to a large extent on bargaining power. Workers' marginal productivity leaves open vast zones of indeterminacy. Here long parts company with the Austrian economics of Mises and Rothbard. As Mises again and again insisted, there is no third system intermediate between capitalism and socialism. The fact that a business has gotten to its position and through government aid does not by itself change the way it sets prices. Neither is it the case that large firms operate by setting monopolistic or oligopolistic prices rather than competitive ones. Of course, if government regulations set prices or give a business the legal power to set prices, that is another matter altogether. It is also not the case that wage determination rests on bargaining power. As Mises and Rothbard see matters, zones of indeterminacy are mythical. To adduce differences between Long on the one hand and Mises and Rothbard on the other is not to show that Long is mistaken. Yeah, sure. I have wished here only to indicate a

19:00sharp divergence between the left libertarianism that Long supports and the Austrian position in that regard is correct.