The Blonde Beast in the Boardroom
Source Dave Anderson
Date 13/05/12/10:03

The Blonde Beast in the Boardroom

A FAMILIAR LEFT-WING critique of libertarianism and the wider school
of classical liberalism is that it defends only formal not actual
freedom. Everyone is formally free to accumulate property because the
law protects everyone’s property rights in whatever they have acquired
legally. In practice this means some end up with much more property
than others, leaving most people economically dependent on the wealthy
few. In fact, a person’s formal freedom to own things is consistent
with him not actually owning anything at all. The defense of formal
freedom is therefore a particular way of concealing and reproducing
radically inequality, in the name of equal freedom itself. There are
endless refinements and variations of this argument, but it is the
basic and long-standing left-wing critique, and it continues to have
strong appeal today as an argument against the current distribution of
wealth and income.

This week, Corey Robin published a remarkable and decidedly different
take on the inegalitarian features of modern libertarianism and its
marginalist origins. On Robin’s view, there is nothing concealed or
even mysterious about this intellectual tradition. It is explicitly
and self-consciously inegalitarian. In a passage worth quoting at
length, Robin unpacks the aristocratic seeds of Hayek’s worldview

In fact, Hayek continues, it is not really my freedom that I should be
concerned about; nor is it the freedom of my friends and neighbors. It
is the freedom of that unknown and untapped figure of invention to
whose imagination and ingenuity my friends and I will later owe our
greater happiness and flourishing: “What is important is not what
freedom I personally would like to exercise but what freedom some
person may need in order to do things beneficial to society. This
freedom we can assure to the unknown person only by giving it to all.”

Deep inside Hayek’s understanding of freedom, then, is the notion that
the freedom of some is worth more than the freedom of others: “The
freedom that will be used by only one man in a million may be more
important to society and more beneficial to the majority than any
freedom that we all use.” Hayek cites approvingly this statement of a
nineteenth-century philosopher: “It may be of extreme importance that
some should enjoy liberty…although such liberty may be neither
possible nor desirable for the great majority.” That we don’t grant
freedom only to that individual is due solely to the happenstance of
our ignorance: we cannot know in advance who he might be. “If there
were omniscient men, if we could know not only all that affects the
attainment of our present wishes but also our future wants and
desires, there would be little case for liberty.”

As Robin tells it, this vision of everyone’s freedom only gaining
value through the heroic efforts of the few who use it to create new
values can be traced back to a surprising source: fin-de-siecle
Vienna, and in particular the subterranean cultural and social
philosophical connections between Nietzsche and the marginalist
economic revolution. The article is not easily summarized. It traces
unexpected connections and elective affinities, but the basic point is
that seeing value as subjective, and seeing freedom as an act of
choice that endows goods with value – the basic, boring, seemingly
value-neutral starting point for modern microeconomics – has to be
understood as not just a methodological but a cultural and political
revolution. It became, in the hands of figures like von Mises,
Schumpeter and Hayek an argument for why neither art nor politics but
the market was the real site for the creation of value, in which a few
heroic figures exercised their virtues and reinvented culture, while
the masses made the free choice to be led by the captains of industry.

Moreover, it was a way of turning political questions about human
needs into millions of isolated ethical dramas, played out separately
in the market. Here again, a passage from the article is worth quoting
at length:

For those choices to reveal our ends, our resources must be
finite—unlimited time, for example, would obviate the need for
choice—and our choice of ends unconstrained by external interference.
The best, indeed only, method for guaranteeing such a situation is if
money (or its equivalent in material goods) is the currency of
choice—and not just of economic choice, but of all of our choices. As
Hayek writes in The Road to Serfdom:

So long as we can freely dispose over our income and all our
possessions, economic loss will always deprive us only of what we
regard as the least important of the desires we were able to satisfy.
A “merely” economic loss is thus one whose effect we can still make
fall on our less important needs…. Economic changes, in other words,
usually affect only the fringe, the “margin,” of our needs. There are
many things which are more important than anything which economic
gains or losses are likely to affect, which for us stand high above
the amenities and even above many of the necessities of life which are
affected by the economic ups and downs.

Should the government decide which of our needs are “merely economic,”
we would be deprived of the opportunity to decide whether these are
higher or lower goods, the marginal or mandatory items of our
flourishing. So vast is the gulf between each soul, so separate and
unequal are we, that it is impossible to assume anything universal
about the sources and conditions of human happiness

On Robin’s striking reading, difference and inequality are the essence
of the ideology, not aspects concealed by a formal commitment to the
freedom and equality of all persons. There is much more to say about
the article, but it is worth noting two things in particular. First,
both the left and libertarians often note that the myth of the market
fails to correspond to reality. If anything, libertarians see this
better than the Left, the latter often taking free market ‘neoliberal’
ideology to describe reality – something we were reminded of in recent
Thatcher obituaries. But Robin’s article suggests a different reading.
Practice does match ideology if we stop thinking of this ideology as a
thesis prescribing perfectly free markets, limited regulation, with
low barriers to entry, fully rational actors, and the rest of it.
Robin instead invites us to see the heart of the ideology as an
argument about the market as an sphere of agonistic struggle, in which
the few battle it out in a contest of wits, foresight and pure will,
while Hayek’s “great majority” use their freedom for considerably more
mundane purposes.

Second, the left has often taken issue with the seemingly bourgeois or
rationalistic assumptions of neo-classical economics and its
marginalist forefathers. It has attacked its individualism and its
scientism. But Robin makes us see the passionate cultural and
political side of some of the markets most ardent defenders. Their
intellectual roots lie just as much in a kind of inegalitarian
cultural anxiety, irrationalism, and celebration of the will as they
do in the dull grey-in-grey of the dismal science. Keynes was not the
only one interested in animal spirits, though in this case, the
animating spirit is the blonde beast in the boardroom.

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