A Bold Conjecture
I have the germ of an idea that I need to present in three parts today, with an example in the near future. The three parts are An Interpretation, a Reinterpretation, and The Question Begged.
If we look at political economic history, we find that the state, especially the national government of the US, has evolved from a very simple set of rules (the Constitution was a few pages) to a very complex set of interlocking and sometimes contradictory rules, interpretations, agencies, and so on (the CFR is several volumes, best measured in linear inches rather than pages). The growth is due to the fact that at every stage, the rules created conditions for new problems which have to be addressed by new rules. For example, the rules which allowed transnational railroads to prosper led to the industrialization described by Chandler (energy + transportation => scale economy), creating the conditions for labor exploitation and unrest, followed by a new round of rules to constrain the industrialists and protect the workers, creating ... and so on. The explanation provided by the defenders of state intervention is that each of these changes has been largely beneficial, and that the few negative consequences may easily be managed by a new round of regulations that are also largely beneficial. They lay claim to pragmatism and empiricism, setting those in opposition to dogmatism or ideology, noting that they simply want to use the best means for achieving the best ends. We are all better off, so those policies were beneficial.
We could reinterpret this by working backwards. Today, we are better off than a generation ago, and a generation ago was better off than the previous generation, and so on. Thus, in order to get the improvements that we need today, it was good that they enacted those policies a few years ago. In order to get to the preconditions for today's prosperity, the need for previous policy choices are obvious. Thus, we should be grateful for those policies and for the idea of state intervention in general. For example, we need the current transportation system, so it was good that the state built roads. And to get the cars that ply those roads, we needed the railroads, so it was good that national regulations to govern railroads were put in place.
But this begs a question: What do they mean by "need"? In one sense, their argument is circular: in order to have the existing set of social, economic, and political mechanisms that we need to perpetuate the existing system, we had to have made those choices in the past. But why do we need the existing system? Indeed, why did the people in the 19th century need the railroad choices? "Need" means that a person or society can not continue to exist without those things. If anything, the fact that society had existed and evolved for thousand of years to that point without those institutions or policies is proof that those things were not needed in any meaningful sense of the word.
When the word "need" is used or implied, red flags should be raised. Who needs (or needed) it? Why? And is (was) the proposed policy the only way to achieve the need? And what, exactly, is needed? Remember this the next time you encounter one of the world's Polanyist, William Jamesist, pragmatic empiricists, who suddenly seem to have shed their pragmatism in favor of some Platonic ideal toward which their programs are working. Did society "need" the specific policies that were involved in the creation of transnational railroads? The railroad owners would appear to have needed them more than society at large; people wanting to farm profitably further west, further from water routes, markets, and hungry customers needed them; politicians wanting to influence the type of farmer in order to influence the type of state (pro- or anti-slavery) needed them; people wanting to enlarge the market for their manufactured goods and thereby increase profits (McCormick, for example) needed them; but those groups do not come close to comprising a majority of the citizens of the country. And if they had not gotten those policies -- laws regarding incorporation, bankruptcy, interstate regulation, subsidization and land transfers -- they still would have had other options, most of which would simply have been more expensive in the short run, but perhaps less so in the long run. For example, prior to the massive build-out of railroads, private roads and canals were all the rage. Fogel, in his response to Rostow, even noted that a horseless carriage existed in 1830 and that "not only the fundamental internal combustion engine theory, but even that of the diesel engine was published as early as 1824," citing D. C. Field's "Mechanical Road Vehicles" and Orville Charles Cramer's "Internal Combustion Engine" in A History of Technology (Charles Singer, ed., 1958) and Encyclopedia Britannica, (1961), respectively (see also Samuel Morey). As these predated the discovery of oil, they would have led to the creation of a more local, environmentally friendly, efficient (in the sense of having fewer externalities) transportation system and if a national system had evolved, it would have been more organic, i.e. the economies of scale would have driven the system rather than the system driving the economies of scale.
Bold enough?
If we look at political economic history, we find that the state, especially the national government of the US, has evolved from a very simple set of rules (the Constitution was a few pages) to a very complex set of interlocking and sometimes contradictory rules, interpretations, agencies, and so on (the CFR is several volumes, best measured in linear inches rather than pages). The growth is due to the fact that at every stage, the rules created conditions for new problems which have to be addressed by new rules. For example, the rules which allowed transnational railroads to prosper led to the industrialization described by Chandler (energy + transportation => scale economy), creating the conditions for labor exploitation and unrest, followed by a new round of rules to constrain the industrialists and protect the workers, creating ... and so on. The explanation provided by the defenders of state intervention is that each of these changes has been largely beneficial, and that the few negative consequences may easily be managed by a new round of regulations that are also largely beneficial. They lay claim to pragmatism and empiricism, setting those in opposition to dogmatism or ideology, noting that they simply want to use the best means for achieving the best ends. We are all better off, so those policies were beneficial.
We could reinterpret this by working backwards. Today, we are better off than a generation ago, and a generation ago was better off than the previous generation, and so on. Thus, in order to get the improvements that we need today, it was good that they enacted those policies a few years ago. In order to get to the preconditions for today's prosperity, the need for previous policy choices are obvious. Thus, we should be grateful for those policies and for the idea of state intervention in general. For example, we need the current transportation system, so it was good that the state built roads. And to get the cars that ply those roads, we needed the railroads, so it was good that national regulations to govern railroads were put in place.
But this begs a question: What do they mean by "need"? In one sense, their argument is circular: in order to have the existing set of social, economic, and political mechanisms that we need to perpetuate the existing system, we had to have made those choices in the past. But why do we need the existing system? Indeed, why did the people in the 19th century need the railroad choices? "Need" means that a person or society can not continue to exist without those things. If anything, the fact that society had existed and evolved for thousand of years to that point without those institutions or policies is proof that those things were not needed in any meaningful sense of the word.
When the word "need" is used or implied, red flags should be raised. Who needs (or needed) it? Why? And is (was) the proposed policy the only way to achieve the need? And what, exactly, is needed? Remember this the next time you encounter one of the world's Polanyist, William Jamesist, pragmatic empiricists, who suddenly seem to have shed their pragmatism in favor of some Platonic ideal toward which their programs are working. Did society "need" the specific policies that were involved in the creation of transnational railroads? The railroad owners would appear to have needed them more than society at large; people wanting to farm profitably further west, further from water routes, markets, and hungry customers needed them; politicians wanting to influence the type of farmer in order to influence the type of state (pro- or anti-slavery) needed them; people wanting to enlarge the market for their manufactured goods and thereby increase profits (McCormick, for example) needed them; but those groups do not come close to comprising a majority of the citizens of the country. And if they had not gotten those policies -- laws regarding incorporation, bankruptcy, interstate regulation, subsidization and land transfers -- they still would have had other options, most of which would simply have been more expensive in the short run, but perhaps less so in the long run. For example, prior to the massive build-out of railroads, private roads and canals were all the rage. Fogel, in his response to Rostow, even noted that a horseless carriage existed in 1830 and that "not only the fundamental internal combustion engine theory, but even that of the diesel engine was published as early as 1824," citing D. C. Field's "Mechanical Road Vehicles" and Orville Charles Cramer's "Internal Combustion Engine" in A History of Technology (Charles Singer, ed., 1958) and Encyclopedia Britannica, (1961), respectively (see also Samuel Morey). As these predated the discovery of oil, they would have led to the creation of a more local, environmentally friendly, efficient (in the sense of having fewer externalities) transportation system and if a national system had evolved, it would have been more organic, i.e. the economies of scale would have driven the system rather than the system driving the economies of scale.
Bold enough?
Labels: centralization, history, philosophy, railroads, state-capitalism, transportation
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