0:00:12.6 Marian Tupy: Peter Boettke, welcome to the human progress podcast. It is good to have you here on our third episode, I believe.
0:00:22.2 Peter Boettke: Well, I am thrilled to be here. Thank you very much for having me on.
0:00:26.3 MT: So what I want to talk to you for the next hour or so about is your new book, there it is, The Struggle for a Better World. And for our viewers, Peter is of course, the University Professor of Economics and Philosophy at George Mason University, and Director of the FA Hayek Program for Advanced Study in Philosophy, Politics and Economics at the Mercatus Center at George Mason University in Virginia. So let’s jump straight to the elevator pitch. What is the book about?
0:01:01.8 PB: Well, the book is really about the argument for liberalism and cosmopolitan liberalism in general, but it is made up of essays that I’ve had the chance to write over the last two decades that were for learned societies that I was invited to give talks, serve as an officer in those societies and give the addresses associated with that, and then it’s book-ended by a new introduction and a conclusion which tries to frame the discussion in light of today’s events, and I hope that readers find the argument that is contained in it to be a cohesive set of arguments and compelling on a variety of margins for them to think about how we approach the world and how we can improve the world. And one last thing, the title, The Struggle for a Better World, refers to twin notions of struggle. The first struggle is that I’m primarily an academic economist, a scholar, and I have puzzled and thought about how to understand the world out the window since I was 19 years old, and I’m still trying to be a life-long learner in figuring that out. So I see scholarship as a struggle to understand the human condition, but I hope also that with the knowledge that we glean from our studies, we can, as citizens, help improve the rules of the game under which we operate so that we could minimize human suffering and maximize the chance for human flourishing, and that’s what I hope we can sort of strive to agree with one another to try to pursue.
0:02:55.7 MT: Okay, and so off the bat, we need to say that we are going to be using the word liberalism in a very specific sense, and that is that to you and me, liberalism means something very different from what liberalism means to a lot of people today. So how do you define liberalism and can you draw the distinction between conservatism, liberalism and progressivism.
0:03:21.5 PB: Yes, so that’s a good point. Though I think it’s becoming… You can’t have a criticism of neoliberalism unless you have an idea of what liberalism is. So everyone runs around talking about neoliberalism and criticizing it and whatnot, so they have to have some notion. So historically, liberalism is a striving to have a society that exhibits neither discrimination nor domination. And the idea is that we recognize one another as our dignified equals, and one of the rules of the game that follow from that kind of situation for the way that we interact in our private lives and in our public lives and in our independent social associations as well as in our commercial transactions. And so ultimately liberalism is a system which strives to the absence of any privileges, and by privileges we mean government-sponsored privileges for some at the expense of others. And so it’s striving to be the absence of that privilege system. So what goes on with conservatism? Conservatism tries to conserve the social order that the tradition that it inherited, alright, that’s the idea of what true conservatism is, whether or not that’s the moral order of a previous age or the political structure of an earlier age, or the elite structure of an earlier age. I mean, think about the ideas of strict hierarchies in society and tradition defending those in the church, in society in general, in the state, whatever. Progressivism was the idea that you basically are the architect of your own social structure, so you can design where to go forward without ever having any issues of the past. And so Liberals in fact stand in juxtaposition to these two positions in a political sense, but also in an epistemological sense. So again, I apologize to the audience that isn’t so excited about doing a deep dive into Hayek, but the reality is, is that, Hayek, addressed this issue in two of his essays, one of them is called Why I Am Not a Conservative, and the other one is called The Errors of Constructivism. And I think that it’s important for people to understand Hayek’s position to read both rather than just one or the other. Because if you read, Why I Am Not a Conservative, what Hayek says is that the liberal, the appropriate attitude of a liberal is to be able to challenge all of society’s values at any one time. Just because they’ve evolved doesn’t mean that they should be treated as sacred. We should use our tools of reason to examine and critically examine the way we interact with each other and the way we organize our lives. The Errors of Constructivism is that we can’t do that all at once, we can only do that by treating some as fixed and given and then in some sense, criticizing on the margin. The problem with socialism, what is it, it wanted to criticize root and branch, the whole society, and that leads to the constructivist error. On the other hand, the traditionalist doesn’t question the way things have always been. And so both the socialist and the conservative are gonna end up by adopting various different strategies which undermine the constant evolution and improvement in society, the kind of human progress that you are recording. They’re gonna undermine it by either stultifying it or actually producing rules which undermine the achievement of it, and so you get both of those problems, and so… Yeah, Anyway, I don’t know if that makes sense, but yeah.
0:07:32.5 MT: Well, no, no that’s fine. It makes a lot of sense. But before I try to summarize your views, perhaps for the non-academician, let me just mention that when we talk about Hayek, we’re talking, of course, about the Austrian economist, Friedrich von Hayek, not Salma Hayek, the…
0:07:48.2 PB: Yeah, yeah. Yeah.
0:07:49.8 MT: The American celebrity. But okay, so liberalism really emerges in the 18th century as a critique of the monarchical absolutist structure of the European society, the king, God, blood and soil, kind of conservatism. And it is a theory of human freedom, enlarging human freedom. And the way that classical liberalism gets passed down to us, to modernity, is really one of limited government, free trade, free speech, and things like that. And so conservatism tries to conserve and there is, and as Hayek famously put it, and there is very little space for social evolution. On the other hand, you’ve got the socialists or the progressives who have a definite idea of what the future should be like, the utopian society, and so they are unconstrained as you said by the historical priors, but also by human nature, right? Whereas classical liberals try to work with human nature to implement incremental changes to conservatism, to bring it up to date, to make it more palatable. And that’s a part of the problem why I think that liberalism has less of a emotional appeal, because it lacks that sort of heroic mission for root and branch reform. Would you agree with that?
0:09:31.4 PB: Yeah, I mean, I think… So let me just start by agreeing with you that the whole point about liberalism is an emancipation project in which the accumulation of individual liberties end up by producing Liberty, so there’s hard-fought little battles all the way, they’re not so little, they’re major, but it’s like… So religious freedom was a major battle to be won, the abolition of slavery was a major battle to be won, the constraining of the crown through a parliamentary government and then eventually constitutional governments was a major battle to be won, and each of those battles is what opens up and allows us to then advance as a society to move beyond a privileged society that was ossifying human beings in the past, and allowed us to experience as Deirdre McCloskey refers to it, right, sort of this great increase in the progress of humanity and the industrial revolution, and that… Getting through that industrial revolution meant that we also got beyond the poverty of the plow, and we also… Remember, Adam Smith in the Wealth of Nations, his target isn’t socialism. His target is mercantilism, the protection of the mercantilist class by the Crown. And so it’s by tearing down those barriers and protections of privilege that we end up by getting this, and so I think that you’re right that there’s a issue… I’m not sure I would put it as emotion, but maybe that’s because I’m an economist, so I have a confused notion of what emotion is, but to me, I think that our moral intuitions are at odds with our moral demands. So our moral intuitions evolve from our evolutionary past as small groups in familiar settings or whatever, and the moral demands of the great society require us to interact with the great multitude of many of whom we’ll never meet, that we don’t get to know, as Adam Smith puts it in the Wealth of Nations, scarce in a lifetime, do we have the opportunity to make but a few close personal friends, but we rely on the behavior of multitudes for our daily survival, so how do we find those rules. And to me… And I’ll end with this, I’m an academic again, so I get paid by the word. So I’ll try to be quicker here, but to me, this is why I think your project on tracing out human progress or any of the stuff. One of the most fascinating passages that I’ve read during the last year, during this COVID thing is from Matt Ridley, and it’s Matt Ridley in his book How Innovation Works, and he says that innovation is the child of freedom, but the parent of prosperity. And I think everyone should like really let that sink in a little bit, what does that mean to have this innovative society, this dynamism. And when we see that, we recognize what Julian Simon was trying to teach us all, which is that the ultimate resource, is the human imagination, it’s the humans and the heroes then are ordinary people. And so to me, going back to the foundations of what liberalism was doing and what true liberals are arguing is that ordinary people can do extraordinary things, if just given the freedom. Whereas I think if you look at the progressives or the conservatives, in many ways, they’re arguing that extraordinary people can do extraordinary things if you just give them the power to do it, right, and so it’s this juxtaposition between that the source of humanity’s greatness is in ordinary people being able to try out things and have the elbow room to live their lives and innovate on the margins that they see that are relevant for them, and then create things for the rest of us, which benefit all of us, versus the idea that it’s only gonna be those who are born in a certain bloodline or those who are educated at certain institutions, are gonna be able to bring us salvation, instead, the average person when freed up will give us this. And this is, you know, if you go back to Julian Simon’s, The Ultimate Resource 2, he has that quote in there about the various different Einsteins and Mozarts and whatnot that aren’t being allowed to be born because of various different aspects or the who, what, we miss out on those, and that’s what we have to think about, that’s why we don’t worry about population growth or any of this stuff. Because again, the ultimate resource is the human imagination, and I think that that’s a major part of what liberalism is all about. We’re escaping Malthusian thinking, and we’re embracing Smithian thinking, and we’re moving beyond all of that.
0:14:30.5 MT: So I want to backtrack just a little bit, and twice so far you have mentioned the word privilege, and I just want to nail this down a little bit. It’s one of my pet peeves that today in America, everybody is talking about privilege without really knowing what privilege means. So privilege gets eliminated during the French Revolution, and the concept is that there are classes of people in France who enjoy different legal status from others. So the nobility for example, is exempted from taxation, so is the church, and they have all sorts of other privileges, privileges properly understood. And that essentially is the notion that whilst humans have had rule of law since the dawn of time, equality before law is something that is very recent, and so we shouldn’t confuse privileged status enforced by the government, such as, for example, a slaveholder versus a slave or somebody who’s exempted from taxation, or somebody who isn’t, or somebody who has a monopoly on import and export and somebody who has to obey the normal rules of the market. We have to distinguish that from the modern understanding of privilege, which is, for example, that you are born into a family, which may be financially well-endowed, you may be born into a family with two parents rather than one, a family that appreciates education and has a house filled with books, or privilege in terms of your intelligence or looks or speed on the tennis court and that sort of thing, and I think it’s very important to distinguish between those two. How does a liberal deal with these two ideas or these two concepts? If I remember correctly, Hayek addressed that at some point in Law, Legislation and Liberty, where he talks about equality before the law as being absolutely crucial to a liberal society, but liberal society also understands that people will come to the world with different endowments and also luck will play a lot of role. So how do we address that? How do you address that?
0:16:58.5 PB: Yeah, so just let me make a quick footnote about Hayek. Hayek goes as far as to challenge the Horatio Alger defense of capitalism, basically that any child, if they work hard enough, will end up by having the multitudes of rewards come to them, right? And he argues that you could work your butt off and you could put yourself in all kind of situations that would be potentially desirable and then fortune may shine poorly on you, and that’s just like the reality of things. I’ll come back to the issue about luck in a minute, ’cause I think it’s one of the real challenges to liberals at the moment, but if I can just say real quickly about… So a lot of what I do in these essays is I’m trying to excavate the kind of liberal tradition from Adam Smith to Hayek and put that on the table for modern discussions in Public Economics basically, and political economy and social philosophy. That’s what I’m doing in all of the different invitations that I’ve been given over the years. And so a lot of what I have to say isn’t original to me, it’s really sort of restating what Hayek or Buchanan or other thinkers get across, but what you raised is the fundamental distinction between a society based on connections and a society based on contract. And so if the only way that I can get ahead is by having connections, then that’s gonna be embedded privilege in our society. If instead what we have is a society based on contract that is voluntary interactions with people in which we will voluntarily reward people for the services that they provide for us or the goods, or we recognize the talents that they have, and we reward them for that, that’s gonna be a different kind of legal system, and we will have differences in outcomes, but we still are treating people as one another’s dignified equals under the law versus the idea that we privilege the law to favor some at the expense of others. And so this is one of the real problems that we have in trying to redress inequities through the power of the state, because what that does is it cannot grant a privilege to one without discriminating against others, right? The state is putting its thumb on the scale and pushing it down. So the only way we can really eradicate the imperfections and injustices in the world is to push for a set of rules, not a set of… So you mentioned the rule of law. I think it’s important to distinguish rule of law versus rule of man and then also, rule of law versus law by rules, right? [chuckle] Because we can have way too many rules, but the rule of law just means is that the people who are responsible for enforcing and instituting the law are held to the same standards of law as the people who are subject to the law. And so you have, there’s no one standing outside of the law; we all have that. Now, just to… I hope that that makes sense, but to come back to your point about the current debate, in the 20 years that I’m writing these essays, the world is shifting radically in terms of the intellectual zeitgeist. In fact, I don’t really, I don’t mention it as clearly in the book as I should, but I’ll mention it here. I used a head quote in the beginning of the book, which is from Hayek about tacit presuppositions of political economy. And those are the given attitudes that intellectuals have about the world. And my own view is that what happened after 1989 was that too many people that were influenced by liberalism, as I understand it, thought that they had won the battle of ideas. And they gave up on the world of ideas and seeded that ground to others, and they thought it was all about politics. But politics is never a clean business. It’s all about minimum winning coalitions and these kind of strategic interactions and stuff. And they forgot that politics is downstream from culture. And so what happened was they focused all their energies in politics and very little resources in culture. And in that 20 years that I’m writing these essays, the cultural zeitgeist shifted tremendously. One of them is luck egalitarianism. Basically, the idea that the only reason why anyone has anything is because of luck, or what you’re talking about like the luck of being born into a household that has parents that love you, rather than parents that treat you poorly or something. Or that it’s just luck because you just happened to be in the right place at the right time. And so as a result, none of your earnings are justified. And so therefore, if they’re unearned, I can confiscate them and give them back to the other people. At the same time, we also have seen, over the 20 years, an increasing amount of rent-seeking in our society. So there is an aspect of a injustice to the whole thing. So how do you weigh those two different arguments and sort it out empirically? Because we’ve gummed up labor markets, we’ve gummed up capital markets. We’ve made it be that certain big institutions benefit from the state in a way that they previously didn’t; they would have been subject to market forces. I kid around sometimes after the financial crisis to my students and I say, this is to undergraduate students, and I’ll say, “Hey, I’m gonna take you to Vegas this weekend.” And I said, you know, “What I promise you is the following thing: I am going to… You get to keep all your profits, but I’m gonna cover all your losses. If you make a loss, I got it covered, but you get all the profits, you know, you go there.” And then I ask them, “Are you gonna be at the slot machines or are you gonna be at the roulette wheel?” None of the students ever say they’re gonna be at the slot machine with grandma. They’re gonna be over at the roulette wheel betting the farm, highly leveraged. And I said, “Oh, I didn’t know your name was Goldman Sachs. It’s nice to meet you.” Right? ‘Cause it’s not like Goldman Sachs did something irrational. What they did was they leveraged because the rules of the game privatized their profits, but socialized their losses. So what are they gonna do? They’re gonna be highly-leveraged. Well, there you have 2008, 2009 and the financial crisis. And so, not, I’m not, I don’t mean that that sums it all up, by the way, but I’m just sort of laying that out as an idea. We have Microsoft 20 years ago had no lobbying presence. Now, it has a major lobbying presence. That matters, right? What we’re doing with labor markets and the idea… You’ll see these big studies like Chetty or whatever, these great economists. And one of the things they identify is that we’ve slow down the mobility between the quintiles. Who slowed that down? ‘It’s not the nature of capitalism to slow it down. It was that we’ve gummed up the markets. We’ve made our society more society about connections than it is about contracts. Now, we’re still getting ahead, and I can maybe describe that in following up on another question, but I think that we have to address these fundamental injustices because the state has gotten involved and ossified aspects of the economic process by giving privileges to certain groups.
0:24:58.1 MT: Right, right. And those privileges could be monopolies, those privileges could be… And then the counter of a monopoly is that you require people to go through all sorts of licensing and admitting processes and so forth. And of course, that is a result of the growth of the bureaucratic state and the power of the state at all levels in government, of government in the United States and elsewhere to regulate private behavior. So as the power of the state increased, so has difficulty with which people can progress through the ranks of society and so forth.
0:25:38.5 PB: I’ll give you an example. My son… So it’s awesome. I mean he’s gonna become a doctor in physical therapy. And he’s going to the number one school in the country, University of Pittsburgh, for that field. But 20 years ago, he wouldn’t have to get a doctorate to be a physical therapist. And even probably before that, he wouldn’t have even had to go and get a Master’s degree. He could have just apprenticed as a physical therapist and learn it. And he’s a physical therapist. My son’s very smart, he did great in all of the anatomy courses, pharmacology, all that stuff like that, that he takes. But the actual technical aspects of physical therapy is like being a really, really good car mechanic, but about the human body. That’s what you’re learning. You’re learning about the functionality of the different muscular and skeletal system. It’s just like the way a car mechanic has to learn. How does a car mechanic learn? Car mechanic learns by putting his hands on a car, not by going to school forever and getting licenses. And then not only that, my son gets done, he is a doctor from the number one school, he’s gonna also now have to take state-certified board tests, not just one test across the board, right? And across. And his wife is a nurse and she does the same thing, she has to take…
0:26:53.8 MT: It’s astonishing.
0:26:55.6 PB: And what we should be having is like, okay, so they… You know, why do we have such a credential-oriented society? This isn’t, again, it’s not in the book, but it’s a project that I led for many years, which was a project in response to Katrina. And one of the things that was amazing about that was the role that occupational licensure played in slowing down the process of rebuilding. You really, I just invite your readers to look into it, the difference between occupational licensing regulations in Florida versus occupational licensing in Louisiana. And look at the nature of business prior to a storm in Louisiana, the cost of doing business, versus the cost of doing business elsewhere. So if the costs of doing business are really high, and then all of a sudden, you hit it with an exogenous shock, don’t be surprised that the world doesn’t adapt so fast. And in Florida, you get hit with hurricane Andrew, and every pipefitter and plumber and electrician from New Jersey is going down to Florida for a few months to make some money during the winter months as they rebuild. That didn’t happen in New Orleans. And you should scratch your head and think, “Why? You know, why? I mean, the guys in the North, the weather’s bad right now so they’re not working. Why the hell aren’t they going down to the South to make the kind of money that they could make?” And it’s because of the occupational licensure restrictions that were there.
0:28:22.7 MT: Yeah.
0:28:23.0 PB: So I, yeah.
0:28:24.6 MT: More recently, of course, in the COVID pandemic. I think it was Maryland, I could be wrong, but I think it was Maryland that was running out of nurses. And so the governor, in his infinite generosity, decided to suspend laws governing nurses’ qualifications in, or rather, nurses’… What’s the word I’m looking for? Board certification in Maryland. In other words, nurses from other parts of the country could now go to Maryland and practice, which would have been impossible without further exams and further bureaucracy before the COVID pandemic. And sometimes, you just need the shock, something terrible to happen to show people just how absurd the situation has gotten over the decades of government growth. I sometimes ask my progressive friends what would happen to the number of lobbyists in Washington, DC if the state suddenly shrank by half. Would we have more lobbyists, or fewer lobbyists? Now, most of my progressive friends are very smart, and as all intelligent people, they will come up with reasons why the obvious wouldn’t happen, which is that lobbying would, of course, decline. It’s an idea, but I would love to give it a try.
0:29:44.3 PB: Yeah, yeah. My colleague, Tyler Cowen, has been very strong in this notion of what he calls state capacity libertarianism as a response to the COVID-19. And he makes some pretty good arguments and you just need to pay attention and wrestle with what he has to say. But I saw him the other day and I said to him, “Hey, you know, Tyler, there’s actually another side of this, too, which is that we’ve now identified all the regulations that have slowed down the ability of us to respond as quickly as we could have.” So the kind of the way the FDA handled the approval of therapeutics, as well as ultimately, the vaccines. We’ve learned so much. What you just talked about, occupational licensing and the difficulties of that. So we’ve learned a ton from the COVID experience that also shows the gumming up of economic life by the state that needs to be restricted so that we’re more adaptable to any kind of crisis that hits us.
0:30:48.7 MT: It is commonly thought that liberalism, the way you and I understand it, it’s primarily about freedom. But you’ve made a compelling case in the book and also, in today’s podcast, about that it is, fundamentally, an egalitarian idea. A idea about dignity of individuals, that every human being on Earth is endowed with equal dignity. You cannot torture a person. You cannot dismember them. You cannot put them in slavery and all sorts of things. So I get that. And maybe one of the ways in which liberalism can have a greater appeal is by also emphasizing the egalitarian aspects of liberalism. But then, we come to a problem. So let me outline, try to outline the problem, and tell me where I’m going wrong. So there are some things in life that sort of people recognize as generally good. Equality has a good sort of sound to it. Compassion and that sort of thing. But too much equality or too much compassion can also result in very negative social consequences. So for example, equality before the law is different from the notion of equality of opportunity, which is something that Hayek would have said was impossible. I actually believe that. No matter how hard I train, I will never have the backhand of Roger Federer, just it’s not gonna happen. And then of course, you get today to people talking about equality of outcome, which is what the equity agenda is about. And even compassion. We all want an element of compassion, but if there are no negative consequences for wrong or bad social behavior, then bad social behavior can mushroom to a point where the whole society will suffer. So I guess what I’m asking is, has liberalism gone wrong? Has equality… Think about it maybe as a bell curve. When you don’t have any equality, it’s very bad. Then you reach a certain socially-optimizing high point for the optimum amount of equality, and then the more equality you have, the less social benefit you get. And similar with compassion, maybe many other values. So is it, should we blame liberalism for where the egalitarian and compassionate business in the country has gotten to?
0:33:32.0 PB: Well, I think that I would… So maybe this is just me being more comfortable. I would say that it’s an inevitable outcome of the way that the progressives try to frame what liberalism is about, rather than what liberalism is about. And so one of my favorite chapters in Hayek, and there’s lots of chapters that I love in Hayek. So my favorite one is actually The Creative Powers of a Free Civilization, which fits right in the theme of human progress. But another one is in The Road to Serfdom, it’s called The End of Truth. And it’s about what totalitarian regimes do that are evident of trying to make sure that they are able to over and control their citizenry. And one of them is to end the idea that there actually is truth. Now, they don’t tell you that they’re ending truth. They lie to you and demand that their truth shifts all the time, and that you have to adopt to changing notions of what is true things. And I think that the progressives became masters of this in many ways, in which they hoisted upon us things where they said, “Look, this is what is dignity,” but it actually isn’t. It’s actually not dignifying, what they’re doing in regard to that. And one of them is, I’ll give you an example, is work. So one of my favorite books that I used to teach when I taught at New York University was a book by William Julius Wilson called When Work Disappears. William Julius Wilson is a sociologist, a man kind of on the left, so he’s not like a right-leaning sociologist. But he examines what happens when we eliminate work opportunities in urban areas, either because of occupational licensure or of minimum wages laws or other kind of things like that. So again, he sounds almost like Walter Williams or Thomas Sowell at some point because if you take away the bottom of the economic ladder, you take away the ladder to be able to climb up the economic ladder as a whole. And so you end up by getting a permanent kind of underclass that can’t actually get out. So what we need to do, I think, is be able to create opportunities, permissionless innovation opportunities, enterprise opportunities to challenge this idea of what’s privileged and who’s privileged. And instead, empower people to have choice in their life, and that to recognize the intimate connection between choices and consequences. Choices and consequences. And that doesn’t mean that you need to be callous to people who have suffered under no fault of their own. But yet, at the same time, you need an intimate connection between choices and consequences for the very reasons that you’re talking about, which is incentivizing people to be able to actually learn from their mistakes, adapt and adjust, and move forward in the way that they interact with one another, and not be a burden on others in their society. So my colleague, Richard Wagner, likes to use the example of what… In wolf societies. So the wolf societies hunt in a pack, and they have very different community responsibility systems. As an economist, you think about these things. But one of the things that makes the wolves work is that it’s in the wolf’s DNA that none of them, when they get hurt, wanna continue to be the wolf that gets taken care of. They wanna try to recover as fast as possible to then become the predator wolf once again. And so what Wagner asked the question is: What happens when, in the wolf society, if all of a sudden, the wolf that gets hurt thinks you know, “Hey, it’s pretty nice to not have to actually work and go out for the hunt and just sit here and be a big, fat happy wolf and have people bring stuff to me”? Well, that society will break down and everything. And so Wagner’s asking us to have a robust liberalism, a liberalism which empowers people to be the architects of their own lives, to take responsibility. And so the phrase that I use in the book all the time is that we wanna live in a society of free and responsible individuals who can prosper by participating in a market economy and live and contribute to caring communities. And so it’s those three things: The individual, the market, but also the community, that liberalism is trying to create a set of environments through which we can live better together than we ever could live in isolation from one another.
0:38:18.0 MT: Yeah, one of the conservative criticisms of liberalism, we already bashed the progressives enough so let’s turn to conservatives. So one of the criticisms of the conservatives made is that we have been focusing so much on the rights and freedom that we have forgotten all about responsibility, and I think that what probably gets the conservative juices flowing is the notion that so much of the pathological behavior in society doesn’t really get punished, for example, through a societal blow-back because progressives had essentially produced this barrier between action and consequences. And so, the conservatives are saying where liberalism has gone wrong is in removing responsibility and with it meaning, meaning in life. One of the common criticisms is that you get meaning in life from participation, community; the conservatives usually mean churches but community at large, then from family and from work, but once you remove these three basic sources of meaning, a conservative would argue. And I think there is something to it. You’ll end up with an aimless and possibly even anxious and depressed individual with nothing to do. What do you think about that?
0:39:52.9 PB: Well, I mean, this criticism isn’t all that new, you can go back and look at Christopher Lasch and thinkers 30, 40 years ago that were trying to talk about this, or in a more recent book by a guy named Bromley, talks about the problem of possessive individualism and let alone Patrick Deneen, or any of these other ones of people, and maybe Washington DC know more about. So it’s kind of an old criticism. I keep on wondering what they mean by irresponsible behavior though. I can agree to some of the issues, but also other ones of what they count. I think one of the real important things to realize is that there’s no great to go back to, because various different people that their behavior was considered irresponsible in the past, actually are human beings that are of course, should be accorded dignity and respect for the choices that they’re making and the pain that they suffer. And so, if you’re a woman in 1920 who has a lot of her choices restricted from her, there’s no great to go back to 1920 to 1970. I doubt any of my students would wanna live the life that my grandmother lived and having to go through that. On the other hand, if you’re a gay man going back to 1950s, not so great, right?
0:41:18.9 MT: No.
0:41:21.2 PB: What kind of rights would that be? I have family members, an uncle who was gay, and he died actually of AIDS in the first wave of the HIV and AIDS crisis or whatever, just tragically, but there’s no great to go back to. If you’re an individual who is suffering from anxiety and depression and other kinds of issues and you’re contemplating suicide, like in the Angus Deaton book, on the Deaths of Despair, we now recognize that people need help, they need to be recognized their dignity, not deny them their humanity. And this is why in the introductory chapter of the book, I reproduce Frederick Douglass’s speech on what is the 4th of July to a slave, ’cause he identifies… What’s fascinating about that is two things from a libertarian point of view, is that Douglass was highly influenced by Lysander Spooner. So people should recognize that that’s an old libertarian connection intellectually to Douglass. Second of all, Douglass doesn’t say that the American system is fundamentally bankrupt, what he argues is that practitioners of the American system have been fundamentally hypocritical, and so therefore he’s calling on their hypocrisy, not that the project was… Even if it was fulfilled, would be bad. In fact, if the project was fulfilled, it would be this great delivery of individuals for freedom and respect. It’s because of the hypocrisy that he wants to expose the people at this 4th of July ceremony and make them think about it. That’s the power of his talk, and I think that talk is generalizable to women and other minorities, immigrants, anything we can apply that same kind of idea to understand what it would like to really live in a society where we treat one another by the fact that they are human beings as one another’s dignified equals, and it doesn’t matter where they come from, who they love, whatever, we need to respect them for the decisions that they’re making. But you are right, they have to be responsible for the consequences of their decisions. That’s why the economist is important part of this conversation. I’m gonna sound like a little jerk now. Economics is important because, as Saul points out, there are no solutions, there’s only trade-offs, and we live in a world of constraints, and constraints require us… We’re gonna make choices, and in those choices, we’re gonna have these trade-offs that we face, and if we subsidize decisions, we get more of ’em; and if we tax ’em, we get less of ’em. And so if we subsidize unproductive activity, we’re gonna get more of it, and if we tax productive activity, we’ll get less of it. It’s not rocket science. This is just basic idea, so again, if people try to tell you differently, they’re doing some kind of mental gymnastics to pull that off. Yeah.
0:44:49.5 MT: Oh, I encounter those mental gymnastics all the time. I ask my progressive friends again… I live in Washington, DC so it’s not difficult to come across a progressive, I ask them. When you tax a pack of cigarettes, you expect that people are going to buy fewer packs of cigarettes because the price has gone up. Well, what happens if you tax work? If you put an income tax on work, are people going to work more or less? No, no, no. That has no impact. In other words, it’s very difficult to talk to some people when the same rules or the same… Where they don’t acknowledge that the same kind of behavior will result in the same kind of outcomes, basically, that’s my…
0:45:39.3 PB: Look, I think that this is not the place to go into a big long discussion about this, but I read a book a few years ago by a guy named Bernard Yack, and it’s called Longing for Total Revolution, and it’s about the left and he identifies in Rousseau, Marx, and Nietzsche. It’s a really good book, and the key issue is that they are non-Enlightenment thinkers, and so they are painting an aesthetic, they are not painting a scientific project, and as a result when you confront data and logic to them, they’re not gonna be persuaded because what matters is the aesthetic that you’ve painted, and what that picture looks like of their ideal just world. In that world, what you have is ideas always equal results. So intentions always equal results. But when you come along as an economist, and you point out that social science really only begins when intentions don’t equal results, because otherwise it’s just good people do good things, bad people do bad things. That’s like kindergarten. You don’t need a theory, you don’t need elaborate social theory. It’s only when individuals pursuing their self-interest generate a public interest, which none of them intended but nevertheless achieves, or the path to hell is paved with good intentions. Do you need a theory to explain the disjoint? Otherwise, Good King Wenceslas does good things, Hitler does bad things, and we just want to identify Good King versus Hitler and… Okay, so that’s kindergarten theorizing. But that’s very attractive, it goes back to your earlier point about our moral intuitions. That is our moral intuition, good people do good things, bad people do bad things. Our social, scientific, our enlightenment thinking is to be able to pierce and have scientific evidence. So I was mentioning to you before we started even recording that I’m writing this paper on Julian Simon at the moment, and again, think about that, you know this better than anyone in the world. Why is it that people aren’t persuaded by the bet and then doing the bet over and then over again? Like, at some point you should say like, “Something’s not right here.” And again, we should have some checkpoints in our brains about, “Oh, the world’s going to hell in a hand basket. The Anthropocene is right upon us,” but yet the people who are advocating that the Anthropocene is right upon us are buying beach front property. That doesn’t make any sense, right? And so, if we look at the Julian Simon idea, and again, we look at these commodities or baskets of commodities, and we look at what happens to real prices over time, and it’s because of substitution and it’s because of innovation, it’s because we human beings have the ability to adapt and adjust and move in all these different places. So, I don’t know. I think that it’s just hard and we need to keep taking lessons on how to communicate and try, again, recognizing communication is a two-way street, which means you have to begin where your audience is rather than where you think they should be, and I’m not saying I’m a master at this, but I think we need to constantly learn how to try to get the message and learning. And I think the most important thing for liberals is to not become off as cock sure that they have all the answers to everything, but instead to recognize that liberalism is life-long learning, it’s a commitment to constantly processing new information, adaption, adjustment and seeing the beauty in the undesigned order that emerges that solve these problems or attempt to solve and whatnot. And so stepping back and seeing that, I think is a very big part of what we need to do.
0:49:40.5 MT: Of course, the big insight that Simon had was that you could get around scarcities through innovation, through human ingenuity. That’s why humans are central. And innovation is at the root of this view of economics, of economic growth called the Schumpeterian growth. Now, I want to talk to you briefly before we end about Schumpeterian versus Smithian growth, because one of the arguments I’ve recently seen of liberalism and liberal commitment specifically to free trade is the following: If growth is indeed driven by innovation, if it is Schumpeterian growth that we want, why do we need free trade of the Smithian kind, where you’re simply adding more people and more capital and more resources into the global economy in order to make it hum. If innovations is all you need, then just permit people to think and they will come up with sources of growth that do not necessitate the kind of economic dislocation that free markets provide. So why do we still need Smithian growth and free trade? Why can’t we just have Schumpeterian growth?
0:51:03.5 PB: So first off, I would really encourage people to look up on YouTube or wherever a debate that took place between Robert Gordon and Joel Mokyr on the decline of productivity in America, because Gordon is talking about all the ideas associated with the decline in the rate of innovation, and new discoveries and whatnot, and then Mokyr comes along and he defends the idea that tomorrow will be better than today, and his reason is, is that the tailwinds of progress are pushing harder against the headwinds of the restrictions or the declines. And so while we might not go as fast as we maybe did from 1920 to 1980 or whatever, we’re still going forward, and as long as we go forward, the metaphor I use in the book is a horse race between a Schumpeterian horse, a Smithian horse and a stupid horse. So you understand that it’s… And the stupid horse is government regulations, and I argue that as long as a Smithian and the Schumpeterian horse are outpacing the stupid horse, tomorrow will be better than today. And I could show you this in a kind of total factor productivity diagram or whatever, and just basically show that even if you have deviations against the trend caused by government stupidity, as long as trade and technology are kicking ahead, we’re gonna end up by being on a higher total factor productivity curve, and therefore we can sustain ourselves against the government interventions, so we’re growing in spite of them, not because of them. Now, to address your question, which is an excellent question, there’s two things I wanna say about that.
0:52:53.6 MT: Before you go there, before you go there, but don’t forget what you were about to say. So having the Smithian and the Schumpeterian horses, it’s better than just having a Smithian horse alone or a Schumpeterian horse alone. Let’s take the stupid horse on the side for a moment. The bottom line is that with those two horses, we can go further than just with one of them, and that’s how we should have both. Okay, back to you.
0:53:22.5 PB: And what I was gonna say is, if you look at innovation, it’s intimately linked with immigration, which means the free mobility of labor and capital, which is what trade is really all about. Because look at the number of innovators that are foreign born, and if we didn’t have them coming into the system, those ideas wouldn’t be there. The kind of innovation that Matt Ridley is talking about when he talks about ideas having sex, it doesn’t happen if you close off your borders, and it also doesn’t happen if you close off capital flow. So think about what entrepreneurship is about, is betting on an idea, but it’s also… Note, it’s a bet, so you have to have the financing to bring the bets to life. You can’t just sit there and just think of a thought and then keep in your basement and have it actually come out, it has to actually be what McCloskey refers to as market tested, it has to be a market-tested idea, which means you have to bring it out into the market, you need it. And so what we need is we need immigration, we need migration patterns, we need capital to move to the highest rates of return, and that means goods and services are crossing borders, individuals are crossing borders, and that’s the kind that generates the global cosmopolitan society. And conservatives that wanna conserve, they wanna have the benefits of the tremendous wealth that’s been created, even the ones who are the moral critics of that, markets have cheaper as earning. They don’t wanna go back to living at 1890 standards of living. No one wants to do that ’cause they wanna actually watch Levin on liberty on their cable TV, that’s what they wanna watch. Or they wanna go to Newsmax nowadays, or whatever the hell. Where the hell that come from? It comes from the tremendous amount of innovations and technological engineering that result because of ideas being able to freely interact with each other and then get tested in commercial transactions. So to me, I think that we need to make a full-throated defense of the cosmopolitan liberal order today, rather than a weak defense of it, that is so… In a nutshell, that would be my position. Yeah. Yeah. But, if you wanted to distill it, you could say it is not enough for… Steve Jobs’ father, I think came from Syria or somewhere. And Elon Musk is, of course, South African. It’s not enough if brilliant-eyed people have ideas and they pick up a phone and inform somebody about their brilliant idea across the world. These individuals have to be uprooted from societies that don’t appreciate innovation, that don’t have a high degree of economic freedom, and they have to be transplanted into a society which has all these different capitals, it has the finance to finance their research and their companies. It has to have many other things, maybe the infrastructure and whatever. In other words, their physical presence or their physical ability to cross borders is actually quite important.
0:56:40.0 PB: It’s extremely important. We just spent a year on Zoom. It has made certain things pretty amazing, lower the cost of interacting. This semester alone, I’m giving talks at Stanford, NYU, and LSE without ever having getting on a plane. But I will tell you, and I’m very grateful for those opportunities that I have to give those talks, but those talks will not be the same as if I was in person and interacting with people after I gave my talk, before I gave my talk, you’re learning from them, the reading the room and the way people interact with you. All kinds of things. I listen to CNBC a lot, sometimes in the background, and one of the things that was really funny is they had a bunch of CEOs on talking about whether or not we’re gonna get back to physical offices again. And all these people were talking about, “No, no, no physical offices, ’cause we don’t have to do it anymore, you can just work at home,” or whatever, and it came to the one guy and he just pushed play on his iPhone or whatever, and it was the song from the musical, Hamilton, that says, “I wanna be in the room where it’s happening,” and he just played a quick line, “I wanna be in the room where it’s happening, in the room where it’s happening.” And then he stopped, he says, “That’s why we’ll go back to offices ’cause people wanna be in the room where it’s happening, and you can’t be in the room where it’s happening in this kind of setting.” And so I think that these are great compliments, but not substitutes. Sometimes we’ll choose. Sometimes we choose to interact and the compliments are gonna be less costly than the other things and therefore not as valuable, but they’re valuable enough on the margin to help us, so we use them. But the idea that you’re gonna somehow get rid of the idea of the importance of industrial clusters, people all come into an area where it matters. It’s the reason why universities were founded in Bologna. People, the students clustered and went there to study, and then there’s something about that interaction. That’s different than a bunch of separate people watching YouTube videos, even though it’s amazing what it exists online. You can educate yourself tremendously online if you know what you’re doing, ’cause there’s… The most brilliant minds in the world are online giving their lectures, you can learn Physics from Richard Feynman, for crying out loud. That’s a hell of a lot better than learning it from Joe Blow at the local university. I’m studying physics with Richard Feynman. But it’s still not the same as being at Caltech and learning physics from him. That’s all I’m trying to say. And so I think that the flow and movement of ideas and the migrations of individuals, this is the great power of the global society, and in order to overcome that, we have to overcome these nativist intuitions that we have, and everything that points to those nativist intuitions, we have to somehow counter with arguments and evidence, learn why they exist, but also push back on ’em. It’s the same thing with militarization. There’s a large push for militarization by a lot of people ’cause they don’t like the other. There is unsavory forces in the world that wanna destroy people or whatever, but having more militarism is not the answer. There’s other things that you need to do.
1:00:21.7 MT: Okay, so the last question, and in some ways, the most difficult one, maybe not. Does a liberal have to be a cosmopolitan? And is there a tension between US patriotism… A lot of classical liberals and libertarians I know are pretty patriotic, they love America, they think that being an American means something, that being say, somebody from Poland or from Mexico doesn’t. Is there at tension between patriotism and cosmopolitanism? Do you have to be a cosmopolitan if you’re a liberal?
1:01:02.6 PB: So I wanna try to separate those two questions, and then see them come together. So I think that when I’m talking about liberalism, I mean the set of rules under which we interact, and I think that we need to have the cosmopolitan liberal rules and attitudes at the highest level, and that various different parochial attitudes can exist underneath of it. But whenever we try to have the parochial attitudes be the meta rules, then we get in trouble. So as long as the meta rule is liberal and cosmopolitan, individuals can be very parochial, they can be conservative Catholics, but they just have to recognize and respect the basic dignity in the Orthodox Jew, or in the Reformist Jew, or in the atheist that’s over here, or in the Amish people or whatever. And so, as long as we can have the meta rule, so if you think about philosophically, this is the meta rules that allow for Nozick’s third part of Anarchy, State and Utopia, or in Chandran Kukathas’s notions in The Liberal Archipelago. So you have the meta rule is the cosmopolitan liberal, the parochialism can exist inside of it, but we should in fact be critical of various different things when the locals or the parochial values are oppressive to their people or whatever, we should be able to not just say, “Oh, no!” But at the same time, we have to respect their freedom of association. So there’s an ongoing dialogue in society.
1:02:36.5 MT: So for example, under a liberal metastructure, you could have a communist commune somewhere in Oregon, and so long as the right of exit is preserved where people can come and go, that commune can exist to its best ability.
1:02:54.0 PB: Yeah, that’s exactly like how Nozick lays it out in the third section of Anarchy, State and Utopia, but it’s also what Chandran Kukathas, as I said, in The Liberal Archipelago, lays out. Steve Macedo in a book called Liberal Virtues, talks about this idea of basically a smorgasbord of life experiments that need to exist. In the last chapter of my book, I bring up this issue having to do with civility and the nature of civility, and what I argue is from Ed Scheels, I argue that we divide government into machine politics, and ideological politics, and then responsible politics. But the problem is, is that if we can have… Responsible politics require very strict rules, otherwise we’re gonna be forced back into ideological politics and machine politics. And in fact, that those ideological politics breeds, in reality, machine politics, ’cause I reward those who agree with me and punish those who don’t, and that’s like the machine, which is the machine is just ideological politics without the ideology. I’m gonna reward my friends and punish my enemies. But if you think about responsible government, that’s when we start thinking about ideas from Buchanan or from the Ostroms about what does it require for a self-governing democratic society, we have turn taking maybe, respect for various things, but the metastructure, the civility has to be at the highest levels of government, and when the highest levels of government become uncivil, then the rest of the society is gonna really be in trouble. And so this is the real problem I think that we face today, is we gotta recapture a notion of civility and dialogue and recognize of democracy as discussion not as debate, and how do we get that back into the core of our belief systems, that’s gonna determine whether or not the United States is gonna go forward as a liberal society or some illiberal system. And I think that democracy is fundamental to the liberal project, but democracy can also pretend to exist in illiberal systems, so illiberal democracies, but they’re not really democracies, they’re just other new systems of privilege, they just have the name democracy associated with them. And so we want real true self-governing democratic principles. We want democracy by discussion. We want the liberal structure to insist on the civility and the respect for one another as dignified equals, and when we get that, then we can open up society to new ideas, all this… For lack of a better word, orgy of innovation that produces modern economic growth and the wonderment of modern civilization.
1:06:03.9 MT: The book is The Struggle for a Better World, and it was an absolute joy and privilege to talk to Peter Boettke from George Mason’s Mercatus Center. It’s a wonderful book full of very interesting information and quotes. Peter, thank you very much.
1:06:22.7 PB: Thank you, I really appreciate it, and I’m very excited to be on this show in particular, and help in the dialogue about the future of humanity and progress. It’s one of the core ideas of the enlightenment is progress, we need to embrace it.
1:06:40.2 MT: Thank you very much.