"Allocation vs Markets" - an ancient struggle with strange modern implications

The ancient mythology of "economic allocation" takes on strange modern camouflage... as a defense of "free market wisdom"

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Warning! This is a long ‘un! (Perhaps making up for the long hiatus to follow, while I go hermit for a while... Though I am sure you'll all keep things lively in comments!) So fetch a snack. Settle down. Gird yourself for a very long and very intricate exercise in re-appraising everything that you ever believed about economics and politics! (Is Brin arrogant, or what? ;-)
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As most of you know, I have long inveighed against the hoary and almost-meaningless so-called "left-right political axis," a metaphor to which (absurdly) countless millions of people still cling, 250 years after the French (of all people) thought it up -- a "spectrum" that mindlessly narrows and channels all political debate. A tidy model that halves every political IQ, forcing sophisticated, 21st Century minds into enmity with folk who may share many values, and compels you into alliance with others who want a world very different than you do.

(See a Questionaire that pokes away and explores underlying assumptions of ideology, at: http://www.davidbrin.com/questionnaire.html)

I have made tidy sums, over the years, wagering that no two (unwarned) individuals in a group (of almost any size) will write down definitions of "left" or "right" that much resemble each other, let alone offer cogent description of the complex quandaries that we face in modern times. In frustration, I have occasionally tried to serve up alternative metaphorsthat might better reflect real, contemporary problems, issues and divisions -- or at least divide up the political landscape more sensibly.

(The word "arrogant" isn't strong enough!)

To view a few examples of these audacious re-appraisals, see:

* The earliest, from a talk given in 1987; this model, based on a meme-psychology metaphor, predicted the fall of the USSR and an era of conflict with “macho” cultures. Spot on forecasts. In fact, just about the ONLY spot-on forecast.

* This one attempted to trace underlying motives of some of today’s players in a viciously artificial "culture war."

* An alternative political “map” breaks away from standard cliches and especially the flaw of tendentiousness. Some insights about the dangers of aristocratism. Aimed at a specialized audience, I'm afraid. But it does expose the pitfalls of all political "mapmaking."

* "Horizon Theory" sorts people out according to how readily they allow themselves to notice when improved safety and prosperity call for an expansion of horizons. This natural trend seems to occur everywhere that humans have established societies -- allowing lower fear levels to translate into farther perspectives in worry, time, and inclusion. But some people and cultures are better at this than others. (Far better at explaining "red-blue differences" than cliches of left or right.)


In every case, the effort was not so much to be right -- proposing some Grand New All-Encompassing Theory -- as much as to try on new ways of viewing familiar things. Groping at the elephant from different angles (to put it allegorically.)

The essential truth is that metaphors can only illustrate and offer insights! The map is NOT the territory. If we should have learned anything from the calamities of Marx and Freud -- from communism to every other kind of 'ism -- the lesson is that human beings are far too complex to describe in pat words, even as individuals, let alone in vast societies.

That doesn't mean we should stop creating models. We are the model making animal.

It does mean that we should learn the maturity to view each model as... well... a model.

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ANOTHER FOOLISH ATTEMPT TO MAKE SENSE OF STUFF

Now I am provoked to do it yet again. Because this damnfool left-right thing has yet another aspect that I haven't addressed before. Yet another part of a dismal dichotomy that badly needs debunking, at long last.

I am talking about the struggle between those preaching “prudent sustainability” and those who claim that market forces will solve all looming crises of poverty, pollution, energy depletion and so on.

We’ve all grown familiar with these apparently rigid “sides”, and so let me avow something from the start. If I am forced to choose between them, you can bet that I will side with the New Puritans of the sustainability crowd! They, at least, want somemodernist attention paid to assertive problem-solving, instead of preaching an indolent, pollyanna faith that some grand and superior external force will come to our rescue, averting calamity in the nick of time.

(Did it, ever, in the past? I repeat that challenge. Did such a thing happen? Ever?)

But that’s the point. I will not choose sides between the extreme poles of yet another absurd "devil's dichotomy." As I say here: http://www.davidbrin.com/collapse.html and here: http://www.signonsandiego.com/uniontrib/20050911/news_lz1v11science.html
... we don’t have to pick between two perfectly opposite positions! In fact, that kind of inflexibility is the surest way to guarantee our failure as a civilization.


So let’s pull back from our immediate troubles, once again, and ponder how these two viewpoints may reflect assumptions that are far older and more similar than any of the adversaries think, reflecting habits of thought going back thousands of years.

In fact, there are certain ways in which doctrinaire leftists are taking up old-time feudalist positions while today’s neo-feudalists of the right seem, at first, to be standing up for the Enlightenment... only to show their truer, reactionary colors when we dig a little deeper.

It all begins by re-examining the sunny optimism of those who think that everything is gonna be just hunky dory. That we’re all certain to come out of these times in and great shape, simply by trusting to the blind hand of commerce.


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Warning: do not read on unless you feel prepared to curb normal political reflexes. Every single time that you react to a statement by diagnosing it (or me) in terms of left or right, YOU WILL BE WRONG. Sometimes diametrically! It will be a wild ride. Now enjoy.
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BLIND BELIEVERS VS THE NEW PURITANS

Let's start by looking at a book that was touted recently by the legendary economics/investment guru, John Mauldin -- "The Bottomless Well" by Peter Huber and Mark P. Mills, provocatively sub-titled "The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy."

Sayeth Mauldin: “Huber and Mills take a hard look at the way we normally think about energy and turn conventional thinking on its head, offering what they call seven great energy heresies.

1. The cost of energy has less to do with the cost of fuel.... (than) the hardware we use to refine, process and use the fuel.

2. "Waste" is virtuous. We use up most of our energy refining energy itself. Waste lets us do more life-affirming things better, more cleanly, and safely.

3. The more efficient our technology, the more energy we consume. More efficient technology lets more people do more, and faster - and more/more/faster invariably swamps all the efficiency gains.

4. The competitive advantage in manufacturing is swinging back to the U.S.. Steam engines launched the first industrial revolution; internal combustion engines and electric generators kicked off the 2nd. The 3rd, desktop computing, is now propelling American labor productivity far ahead.

5. Human demand for energy is insatiable in the tireless battle against dispersion and decay.

6. Energy supplies are infinite, even if petroleum is not.

7. If energy policies similar to ours can be implemented worldwide, our grandchildren will inhabit a planet with less pollution, a more stable biosphere, and better-balanced carbon books than at any time since the rise of agriculture some five thousand years ago."


Wow! Heretical? Yes. Deliberately provocative? You bet...

...and at the top layer, Huber and Mills are also jibbering what amounts to stark, raving lunacy! None of these statements follow, even from their stated or implicit premises! Nor do they represent the way that prudent people have ever behaved in the past. Ever.

Don't you find it stunning how few bright fools compare their prescriptions to 4,000 years of actual human experience? I could cite dozens of historical examples of eras when imprudent waste, inefiiciency, resource depletion and heedless lack of planning resulted in civilization-wide calamity (see Jared Diamond’s book: Collapse), whereas there is not a single example, in all of the human past, when proposals such as Huber & Mills offer actually resulted in a society’s success.

Not one. Yet, people with high IQs are actually able to speak such absurd nostrums and convince themselves that they are not only true, but self-evident. Moreover, with a straight face they call themselves "conservative."

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(A side question: How did “spendthrift liberals” ever become the ones pushing puritan values of thrift on the grand scale -- from budget-balancing to smaller government to international restraint to "waste-not" efficiency -- while “conservatives” preach against saving anything for a rainy day? More to the point, are we really too obstinate in our cliches to comment or even notice?)
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AND YET...

And yet, if you read these deliberately provocative proposals (by Huber & Mills and others like them) only with reflexive disdain or automatic, dismissive loathing, then you are missing the point at many levels.

First - guys like this thrive on provoking apoplexy. I know. I recognize fellow contrarians... though rigid ones.

Second - bright fools are not only fools. They are also... bright!
. . Hence, even when they are clearly acting as shills for Exxon/Murdoch, is that any reason not to read and listen carefully, seeking value?
. . Dig this. Recent scientific studies have shown that we are at our most distrustworthy and addictively delusional while in the act of dismissing evidence presented by our foes! Our brains secrete reward chemicals every time we skim and shrug and sneer at opponents.
. . In contrast, isn't it a sign of true wisdom to instead sift through your adversary's meanings, in order to separate wheat from chaff?

Consider. Such people are often very clever at lining up both facts and trends that exploit the weakest parts of the argument for prudent efficiency and sustainability. . . . Nu? Don't we want those weakest portions exposed? So that the argument for sustainability can be improved? Again, the principle is CITOKATE. (Criticism is the only known antidote to error.)

Third - and most important - these authors absolutely miss the point of what we are all arguing about. Indeed, I think their opponents miss the key point, as well.

In fact, everybody does.


MORE LAYERS THAT LIE (AND LIE) UNDERNEATH THE LEFT-RIGHT AXIS

Unfortunately, the surface issues that Huber and Wills and their fellow cornucopians raise -- (e.g. whether certain technological advances may or may not rescue sustainable growth) -- distract from a layer that is much more meaningful... and far less explored. This is one more case where the underlying psychology and personal agenda are vastly more interesting than specific details of argument.

See my article on "Singularities and Nightmares," http://www.amazon.com/gp/product/B000EOU4RQ
There I try to put in perspective the psychological phenomenon called “techno transcendentalism.” Here's an excerpt:

Depending on whatever decade you happen to live in, techno-transcendentalism has shifted from one fad to another, pinning fervent hopes upon the scientific flavor of the week. For example, a hundred years ago, Marxists and Freudians wove compelling models of human society — or mind — predicting that rational application of these models and rules would result in far higher levels of general happiness. Subsequently, with popular news about advances in agriculture and evolutionary biology, some groups grew captivated by eugenics — the allure of improving the human animal. On occasion, misguided and even horrendous undertakings prompted widespread revulsion. Yet, this recurring dream has lately revived in new forms, with the promise of genetic engineering and neurotechnology.

Enthusiasts for nuclear power in the 1950's promised energy too cheap to meter. Some of the same passion was seen in a widespread enthusiasm for space colonies, in the 1970' s and 80's, and in today's ongoing cyber-transcendentalism, which promises ultimate freedom and privacy for everyone, if only we just start encrypting every Internet message, using anonymity online to perfectly mask the frail beings who are typing at a real keyboard. Over the long run, some hold out hope that human minds will be able to download into computers or the vast new frontier of mid-21st Century cyberspace, freeing individuals of any remaining slavery to our crude and fallible organic bodies.

This long tradition — of bright people pouring faith and enthusiasm into transcendental dreams — eerily resembling the way previous generations clasped salvation tales that were more religious or magical. This recurring theme tells us a lot about one aspect of our nature, a trait that crosses all cultures and all centuries. Are techno-transcendentalists really all that different, deep-down, than Saint Francis or Buddha - or kabbalist rabbis - vesting what amounts to sacred devotion upon unproved assumptions, almost as articles of trascendant faith?


Let’s be clear. I am not saying that any... or even all... of these fields of social or physical science did not contribute to our growing edifice of understanding, or, ultimately, to future great expansions of human power and maturation. No, what I want to point to is the psychological qualities of quasi-religious EXCLUSIVITY and PURITY true believers would routinely invest in one area, calling their chosen path central. That “this is it.”

Reiterating; might all of this be less a matter of technology than of personality?


GUIDED ALLOCATION VS FAITH IN BLIND MARKETS

Returning closer to the topic at hand, how does any of this apply to the cornucopian mythology of Huber and Mills? Of Julian Symon and Bjorn Lomberg? The supreme rationalization of those in the elite who do not want governments, legislatures, universities or other publicly accountable institutions to deliberate or plan strategies for dealing with onrushing change.

Let’s step back. Consider what these authors (and their benefactor/patrons) are preaching. The deliberately provocative title “Bottomless Well” forecasts a coming feast of both energy and human empowerment -- a predicted perfect storm of human problem-solving creativity -- arising from a combination of mass education, freedom and fecund market forces. It is, deep down, yet another expression of what’s recently been called the Copenhagen Doctrine or, more generally, the precept of Faith in Blind Markets (FIBM)

Now first let me put aside any notion that I’m an adherent of the opposite principle -- the general notion called Guided Allocation of Resources (GAR). As you will see below, I most definitely am not!

What I will show is that this dispute goes back a long way. It is an ancient dichotomy... and one that’s deeply misunderstood.


WHAT IS 'GUIDED ALLOCATION’?

Before we appraise the modern fetishism called Faith in Blind Markets (FIBM), it is essential that we cover the older fallacy of GAR, or guided allocation. This notion contends that society’s best, brightest and wisest should decide how capital will be invested, which goods will be produced, and who will work at what tasks.

To those who were raised in the 20th Century, this description surely sounds like socialism. But that is a narrow and parochial view of GAR. A glaring logical and historical fallacy. An absurdity, in fact. (As a test of your own flexibility and sagacity, stop here and ponder for a moment why I call this reflex association preposterous. Why do I say that socialism is NOT the foremost or exclusive exemplar of guided allocation? Think "history" and stretch your assumptions a bit, before reading on.)


In fact, GAR has been the fundamental principle of governance and economics in nearly all human societies -- not just socialistic ones -- ever since the discovery of agriculture! Take the cabals of kings, nobles, and clerics that ruled over most of them. Those oligarchs felt just as sure of their superior ability to manage and allocate resources -- including human labor -- as the Soviet nomenklatura commissars were. Perhaps more so!

(In fact, the parallels between these two groups -- between commissars and feudalists -- are far greater than their differences! This should come as no surprise, since both groups were power-grabbers and both groups were human. Duh.)

Think. Isn’t this the obvious way that most human societies will tend to become organized? Whichever sub-group is already powerful, that group will USE their power to get MORE power! It’s simple Darwinism, borne out by the fact that this process of collusive authority-grabbing normally led to greater reproductive success. Success for the rulers, that is. (Recent evidence shows that fully 8% of modern Chinese are descended from the harem of Ghengiz Khan! Ponder that a bit. And he was just one among thousands of kings. Face it. We are ALL descended from guys like that.)

Seriously, can anybody plausibly argue that this was not the recurring pattern from continent to continent, in nearly all complex human societies? Of course, organized religion often played a vital role. Clerics all-too often strove to justify this power-gathering, to chant and rationalize and convince peasants that allocation by the mighty was best for all. (Do not take this as an anti-religious rant. Justification of hierarchy was a priestly role quite independent of the more honorable, pastoral and religious tasks performed by sincere holy men and women. Alas, lamentably, these separate roles tended to get bunched together in many cultures.)

Hence, GAR (guided allocation of resources) was not unique to socialism -- not a matter of "left versus right." Rather, it appears to be the principal pattern of historical economies around the world. A pattern that spanned at least 40 centuries, during which real markets seldom lasted very long without profound and relentless interference, favoritism and meddling “from above.”

(This, indeed, was the greatest complaint of Adam Smith and the biggest reason why the patron saint of capitalism was a "liberal.")

Tragically, one effect seemed nearly always to result from this pattern. That which benefits the leadership class seldom correlates with good statecraft. When given a choice between progress for everybody and enrichment of the oligarchy, which policy do you think was implemented in ancient Egypt, Babylon, Mycennae, Chin, Kamakura, Rome, Zimbabwe, Tahiti, Russia, Great Britain...?

Again, I do not have to prove any of this. All I have to do is put forward a challenge. Find exceptions! Across twenty years of making this one point, in public and in print far and wide, I have only heard mentioned THREE potential exceptions -- brief and minor ones -- to this relentless pattern, across the entire human historical record. And a sad story it is.


GUIDED ALLOCATION - TOO TEMPTING TO RESIST?

I should point out that collusive cheating is only the first of several flaws, inherent in the notion of guided allocation.

The second flaw was almost as great -- imperfect human knowledge of complex systems. Even when ruling elites tried to govern judiciously, for the the good of all, generation after generation of wise guys fell for the same alluring trap... the same delusion... believing that they understood society, morality, physical law, and economics well enough to allocate effectively.

But history shows they were all mistaken. Every last one of them. Complexity and imperfect knowledge are the gremlins that haunted kings, even when societies were far simpler than they are now.


Of course, I am not the first to point this out. Nobel-winning economist F.A. Hayek dealt decisively with the problem of imperfect knowledge, offering a convincing line of explanation for why reliable command over any economy always wriggles and slips out of our grasp.

This lesson applies not only to ancient Greece and China... or to the calamities of Soviet-style state planning... but even to sophisticated modern managers. Take the recent history of “Japan Inc.” Back in their heyday, the Lords of MITI pursued that ancient dream of top-down allocation with a vengeance. Moreover, it sure seemed successful for a while! Using techniques far more sophisticated than the Politburo and incorporating many capitalist tools, they assumed that their economic models, and especially thoughtful allocation of bottomless lines of credit to favored industries, would succeed far better than “random” open markets. Indeed, those sophisticated models and plans worked... for a while.

Till complexity and imperfect knowledge wreaked inevitable vengeance. (I was among the few, in the 1980s, to predict this.)

Here is a sad sermon taught by the ages:
GAR may be a natural way for societies to organize. But GAR does not deal well with surprise.

Still, the ancient dream of guided allocation will not die. The neo-confucian leaders of China are following it today, attempting to rise above the mistakes made earlier by feudal, communist and MITI allocating castes. Indeed, let us all admit that they are achieving respectable wonders, so far. Impressive stuff.

Still, are they human?

Then it seems all-but certain that complexity and surprise will play their old tricks at some point,
yanking the rug out from under even the cleverest allocators, once again.



THE MARKET ALTERNATIVE

In contrast to guided allocation, genuinely liberated markets have a very short history.

Yes, great Pericles spoke in their favor, and not only of economic markets, but also markets of knowledge, ideas, policy and law (e.g. democracy.) Alas, the notion was new and difficult to implement in lasting ways. It was also deeply unpopular among tyrants and oligarchs, who unleashed every weapon against that fragile, early experiment. Moreover, once the pericleans were quashed, aristocrats in every subsequent culture relentlessly subsidized and promulgated Plato and his followers, who made it their business to defend top-down hierarchy with utter tenacity, for close to 2500 years.

Guided allocation remained king - literally - during all that time. A long and daunting epoch of failure and pain.

That is, until Adam Smith and John Locke began drawing our eyes once again toward the Periclean dream. Toward what we moderns might call the “wisdom of empowered crowds.”

Their core notion? That human beings -- all of us -- are inherently delusional self-deceivers, rationalizers and cheaters. (Duh!) Hence, no elite group can be trusted to allocate resources fairly, or to rule wisely with unbalanced or unaccountable monopolies of power. No, not even the elites YOU happen to admire. Not even them. Not even you. Not even me.

Rather, Smith, Locke, Franklin and their enlightenment peers offered a radical notion. If you empower the masses to act individually, as fully knowledgeable citizens, each person transacting on his or her own behalf, then their differences may add up to strength. The strength and creative power of reciprocal accountability (RA) -- applied en masse -- to detect and counter a great many foolish errors. Unwise and immature individuals can be be much wiser in aggregate, especially when a dollop of mutual suspicion lets them cancel out each others' worst tendencies -- the malignant, predatory devils of human nature -- leaving the angels of fair competition and cooperation to thrive. The guiding concept? To escape the era of kingly delusion, replacing it with an open give-and-take. Above all, letting no one escape criticism.

(Pause: Which is more "naive"... the idealization I just described? Or an obstinate refusal to recognize that this plan worked? Not perfectly. But far, far better than every other kingly, priestly or ritual-laden prescription since humanity lived in trees?)

Not only is this innovation the wellspring of “suspicion of authority” -- a central foundation of the US Constitution. (And a lot of mass media!) It is also the the basic wisdom underlying modern markets. Instead of a single, coherent economic plan, declared top-down by fallible leaders, a market deals with the problems of complexity by unleashing a tool that is... well... complex! A whole society of sovereign individuals.

(For a rather intense look at how "truth" is determined in science, democracy, courts and markets, see the lead article in the American Bar Association's Journal Aug. 2000, "Disputation Arenas: Harnessing Conflict and Competition for Society's Benefit." or at: http://www.davidbrin.com/disputationarticle1.html)

This is the core premise underpinning our pragmatic or "liberal" wing of the Enlightenment. A suspicion toward hierarchy and belief in dispersed authority that has proved its effectiveness during a narrow, 200 year window when -- coincidentally? -- humanity has managed to multiply its knowledge, wealth, health, prosperity and happiness by orders of magnitude beyond what had been achieved by all the kings and priests and command allocators of old.

Putting aside deluded romantic-nostalgia about the "wisdom of ancient tribes," there can be no rational doubt that the notions of Pericles and Smith and Locke and Hayek are proved.


Well? Are you confused yet? One moment I seem to be veering left, then right! I may seem fickle and inconsistent...

...but that is an illusion. There is a very consistent story here. Hang in there... and shrug off the cliches.

So Brin rejects the "guided allocation" practiced by kings and commissars. Does that mean we should all pray instead to the inherent wisdom of blind markets? Have I picked sides in the furious modern debate between FIBM and GAR, choosing Huber and Mills and Simon and Lomberg?

Gah! Fie upon dichotomies!

I refuse to be pigeonholed. Especially when the dichotomy is a trick. When it is a trap


IS IT REALLY A MATTER OF WISE MARKETS VS FOOLISH ALLOCATORS?

All right, then. Let's take a closer look at this great dichotomy. One that (we're told) maps neatly upon the hoary old “left-right political axis”. A dichotomy between the standard human modus operandi - guided allocation - and the newcomer - faith in blind markets.

My claim? That we have been distracted, far too long, by a failure to parse this great debate properly. So let me try to offer a set of encsapsulated key points. And then I’ll kick over the chessboard, pointing out that it was never a dichotomy at all!


Point #1. Reiterating: the approach called Guided Allocation of Resources (GAR) is not specifically socialistic. Rather, it is essentially oligarchic. In principle, communist commissars were no better - or worse - than any other narrow conspiratorial elite of power grabbing cheaters.


Point #2. The fallacy is just as severe in the opposite direction! Any true historian of both economics and politics will tell you that open markets and liberated citizen accountability are the greatest liberal inventions. They were radical, revolutionary, anti-monarchy, anti-oligarchic and reformist. In other words, we are all better off dropping the "left-right" nonsense, when comparing guided allocation to faith in markets. It is simply a poison to clear thinking.


Point #3. Thus, when "market promoters" rightly point out the great flaws of GAR, aren't they hypocrites to wag their fingers in just one direction? They should shine that critical light on all economy-controlling cabals. Are collusive, price-fixing monopolists more inherently wise and trustworthy than commissars, or feudal lords, or other narrow groups of would-be “allocators”? Aren’t all types more similar to each other than radicals of left or right would ever choose to admit?


Point #4. Even more generally, are not large corporations, in themselves, examples of top-down allocation hierarchies, replicating in-miniature, the rigidity, poor modeling and frequent self-interested cheating that were displayed by kings and commisars? Picture an imperious CEO as royalty! Isn't the parallel creepy and also... well... rather banal? Even unsurprising?

Yes, competition between major corporations should keep these allocation-centers lean, mean and efficient, while markets supply the essential element of wisdom via supply and demand. (Historians believe that competition between fractious and divided European nations had the same effect during and after the Renaissance, leading to their rapid technological innovation and subsequent conquest of the world. Still, that did not make them internally open. Or intrinsically wise.)

Anyway, note the word “should.” No matter how well-motivated a company is, driven by external competition, a dilemma remains: if corporations utilize command hierarchies similar to kingdoms, won’t they -- don't they -- emulate some of the same faults? From leader-egomania and leader conflict-of-interest to relying on a single mind (or small group of minds) to deal with ineffable complexity?


Point #5. Those who (correctly) see the flaws and faults of guided allocation can easily fall into a logical trap -- positing that the wise opposite of GAR is Faith in Blind Markets (FIBM).

Indeed, some take the notion of market "blindness" quite seriously, propounding that societies should never meddle in the free interaction of market players (corporations and individuals). Any attempt at "guidance" -- by (for example) government regulation -- must automatically be rejected, as a matter of basic principle.

In other words, because we have learned that GAR (all capital letters) stinks as a general system, that means we must flee as far as we can, to extremes in the diametric direction! We should reject any use of "gar" (lower case) tools to help markets work better. In extremum, this teaching calls upon us to reject the entire suite of problem-solving methodologies that involve political deliberation, prioritizing and allocating a certain fraction of social resources toward the accomplishment of thoroughly considered and democratically-chosen consensus goals.

Not only is blindness good -- (goes this hyper-libertarian concept) -- but any attempt by society to "see" -- and to act upon that foresight -- is automatically dismissed as bad.

Um, has anyone else pondered the unbelievable reductio meaning of this cult incantation? That an ideal human society should make little or no use of our great facility for planing and foresight?

Individuals may peer ahead. Corporations are allowed to do so. Aristocrats may do so in small collusive groups and in secret. But en-masse we must spurn our hard-won propensity for gedankenexperiment and precautionary action!

Astonishingly, those who seek a fetishistic opposite to GAR seem to be declaring faith and fealty to a new godhead. A non-promethean deity who demands quiet from humanity's collective prefrontal lobes. In blithe and devout expectation of externally-delivered salvation, they pray to an idol of mass-social unsapience.


Point #6. True, what I just described is an extreme version of FIBM. Even Huber and Mills would call for some government-led allocation, I presume. Space telescopes and medical research. Certainly public assumption of countless liabilities so that profits can be privatized.

Still, the devil is not in the details. He lurks in the passion and extreme attitudes of these partisans... and in their cryptic loyalties. As I alluded earlier, when I spoke of techno-transcendentalists who pledge faith in simplistic models, there is clearly something going on here at the level of personality. A desperate need for some all-encompassing magical and simplistic formula.

Take the popular libertarian slogan: “market laws are natural laws.” Alas, like most slogans, it is poorly supported in the light of history or human nature. When challenged, supporters can cite few examples of thriving markets that existed in the past, free of oligarchic GAR. Market laws are natural laws? One might imagine that something so natural would have actually happened at least once, during those long dark ages before the Enlightenment.


Point #7. Yes, fecund markets have happened since the Enlightenment. Not only markets of commerce, but other “accountability arenas” of science, democracy and law have all successfully diverted the incessant human penchant for competition, channeling it away from cheating and predation, instead harnessing it toward the pursuit of factual truth, justice and unprecedented creativity in the delivery of goods and services.

Rather than manifestations of natural law, these four creative arenas far more closely resemble finely tuned machines that have been hand-built by countless sincere men and women, across several centuries. These machines are not "unguided." Rather, they are guided with a new goal in mind -- the empowerment of individual competitive and cooperative opportunity.

A myriad rules and procedures have been enacted, in much the same way that automotive engineers invented valves and cams and pulleys and gears... that are now being replaced in our cars by computer-controlled injectors and actuators. A similar process of fine-tuning and replacement takes place in a modern society as outdated laws and regulations get replaced. Some of these arena rules were (and are) overly-ornate. Some are even deeply stupid. Others are pragmatic, having arisen out of hard experience, with the aim of helping to harness human competitive-cooperative energy better than before.

Oh, it isn't pretty. An excessive plethora of parts. Feedback loops that struggle and shove against each other. Filthy, corruption-ridden contradictions. Parasites abound and oh, the steering mechanism! Don't get me started on the steering mechanism. Anyone who has a sense of style must be regularly shocked and offended by our messy civilization.

Ah, but anybody with awareness of human history or human nature, has to be amazed that the machinery works at all.

No wonder extreme ideologues of both GAR and FIBM have no patience for all this gritty complexity. The former want the engine put under total conscious control. The latter cling to a magical notion that we got our motors of commerce, science and law without any vision or planning at all.

The core point that must emerge -- that the rest of us must deal with, in coming years -- is just how deeply unhelpful both of these extreme world views really are. How fixated, inflexible... and borderline insane.


Point #8. And profoundly, prodigiously dishonest!

Not only do radical preachers of FIBM try desperately to divert attention from history's great fact -- that guided allocation of resources (GAR) is just as relentlessly a fault of aristocratism and capitalism, as it is of socialism. Far worse, Huber and Mills -- along with others like Julian Simon and Bjorn Lomborg -- appear to be either willingly complicit or pathetically unaware that FIBM has become a mantra in service of those who want state authority removed... so that decisions about resource and production allocation can be taken over by other oligarchies.

By other groups that are inherently even less accountable than elected governments. Groups bent on re-creating patterns of hierarchy that are as old as human civilization.

Indeed, it is precisely in the area that most interests Huber and Mills -- energy policy -- that we have lately seen narrow groups of powerful and well-connected men seizing secretive and collusive allocation-authority, free of almost any kind of accountability. Men who decry governmental allocators... then apply every trick of bribery and influence to use government as a tool for power and wealth accumulation. Men who call themselves geniuses, yet have proved themselves to be little better than Louis XVI at guiding civilization on the path of foresight, innovation, error-correction and success.

Men who would read the previous paragraph and instantly hurl cries of "socialist!" in my direction, in order to distract from the paragraph's blatant, obvious - and essentially apolitical - truth. (But you know I'm no socialist.)

This is the central hypocrisy of today's pulpit-thumpers and preachers of Faith in Blind Markets. If they were sincere, they would not only want to lessen government's hand on the economy. They would also be fervent devotees of anti-trust action to disperse every bloated, conspiratorial accumulation of power, knowing that GAR is an enemy of market wisdom, even (especially!) when the hands wielding it are corporate and aristocratic, instead of do-gooder liberal regulators.

Alas, the myopia of FIBM has gone so far that the Cato Institute, supposedly a bastion of pro-market libertarian thought, has turned into the central locus of jesuitical rationalization for a return to feudal aristocratism. There is no market distortion too obscene to support, so long as the beneficiaries are oligarchs, rather than liberal paternalists.


Point #9. And yet, lest I seem unbalanced, let me turn the other way and make clear that the FIBM rightwing has no monopoly on desperately self-serving myopia and oversimplification!

If FIBM is a betrayal of Smith and Locke, what can we say about the would-be world-savers who would ignore every lesson that we have learned about the fallacy of GAR? Many on the left truly are far-socialistic in their inclinations. They see the abuses and feral power-grubbing of aristocratic cheaters and conclude that capitalism itself is at fault... when those cheaters are the very worst enemies of true free enterprise!

Why are many reformers unable to make this distinction?

Again, I believe it is a matter of personality, far more than fact or evidence. They see a world that is filled with folly and pain. They sincerely believe that this folly and pain can be solved simply by allocating resources, tasks, capital, labor and endeavor in the right ways. I mean, what could be more obvious? Wasn't this obvious to the rulers of every other civilization?

It would take wit, insight and incredible perspective for many of them to pull back and admit: "Wait... I am prescribing the very thing I should hate. What I really ought to want are genuinely liberal markets, in which the state ensures that all players get to know and negotiate and play the great creative game from a level playing field. Yes, that will mean some "allocating" to raise up poor children to be ABLE to compete well. And yes we must allocate to take into account the needs of generations yet to come. But the thing I am devoted to is not allocation, per se! The thing I am dedicated to is giving all people (including those yet to come) a fair chance to play."


point 10. What can we conclude?

It is a pretty rough and devastating denunciation.

THE "WAR" BETWEEN FIBM AND GAR IS A SPAT BETWEEN COUSINS
WHO SHARE THE SAME PERSONALITY FLAW.
THE SAME WRONGHEADED ASSUMPTION.


If you are confused, don't be daunted. We have been trying hard to look at familiar cliches afresh, from unusual points of view. And what we have seen is perplexing, complicated, maybe even a bit scary.

Please. I am not saying that all enterprise capitalists are hypocrites. Nor are all liberal reformers deep-down socialist meddlers. Indeed, a vast majority on both sides are not!

Most of us are trying hard to keep faith with the Enlightenment goal of pragmatic problem solving, using an eclectic mix of "right and left-handed tools" from competitive market innovation to reasonable social cooperation. From the quasi-random, supply-demand stimulation of goods and services to the kind of government regulations that tune markets, so that all reasonable costs are paid by the same generation that reaps the immediate benefits. (Instead of passing those costs on to our descendants.)

Indeed, it is that quiet and earnest majority who I am addressing in this article. Because the radicals of FIBM and GAR will not have lasted up to this point. Because they will have already dismissed this as a rant that evades accepted terminology. This essay proves me to be a "socialist"... or else a libertarian "tool of plutocrats." Or a wishy-washy oscillator, rudderless and without principles.

But, again, you know better.


HERE'S THE CRUX:

Huber and Mills are probably right that the creativity of millions of unleashed human minds will be applied to problem-solving in the years ahead, to an extent that we’ll find unprecedented and dazzling. Perhaps even enough to bring the positive singularity.

On the other hand, history shows that we have absolutely no basis for blindly trusting that creative cornucopia explosion to happen all by itself! The engendering of those creative millions is too serious and important a task to leave to such a simple dogma! Especially to a blithe nostrum, that has no support in the long history of nations.

True, hierarchical guided allocation proved dangerous and stupid countless times in the past. But not when it has been applied toward well-focused tasks that enhance the capability of millions of human beings to become sagacious individual citizens and market participants! Our universities and internets and democracies and civil rights and commercial codes and free education and subsidized roads and nutrition programs and countless other measures that mitigated the tendency of society to slump into a pyramidal hierarchy of inherited privilege. By helping each generation of kids to believe - in some confidence - that they are able to innovate and cooperate and joyfully compete, we created the world's first diamond-shaped society.

And we did it using judicious dollops of carefully considered gar... (lower case)... not GAR.

If the left is never satisfied in pushing for such things, sometimes forgetting what they are for, the right has no claim to be smug. They take all of these things (like civil rights) for granted, glad to accept the benefits, forgetting that conservatives fought against every last one of them, and now resist every new fine-tuning that might help the great cornucopian machine to work better.

Indeed, while I am a passionate believer in the reciprocal accountability principle of Pericles and Smith and Locke - (as evidenced by my book The Transparent Society) - I cannot turn this pragmatic appreciation into cult belief in a quasi religious version, a caricature of what they taught.

Faith in Blind Markets (FIBM) is neither scientific nor steadfast to the essentially pragmatic mindset of the Lockean Enlightenment.

Nor is the recurring notion of socialist allocation a suitable replacement for a dismally predictable oligarchic conspiracy.

All of these are just slightly re-clothed versions of GAR.

They are crutches for weak thinkers... or else manipulative tools exploited by those who want to be our masters.

They are dismal tales that grab and clutch at us out of the past, unsuitable for sophisticated citizens of an agile and complex and fast-moving Third Millennium.

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