Edmund Burke once said, “It is the nature of all greatness not to be exact.” There is a certain kind of conversation I often have that brings this point to mind. I often argue that we underestimate the degree to which bottom-up, evolved orders can solve the kinds of public goods or externality problems that some insist can only be solved through top-down coercion. Occasionally, an interlocuter will follow up with what they imagine is a killer question—“Do you have a specific mechanism in mind people will use to solve this particular problem?” But asking this question only shows one has misunderstood the argument.
Innovation occurs when someone comes up with an idea that nobody has thought of before. By their very nature, innovative ideas can’t be identified in advance. If we already knew what they were, they wouldn’t be innovative ideas, they would be established ideas. Similarly, freedom isn’t simply the liberty to stick to established ideas—freedom means giving people the room to deal with the troubles of life in ways that are new and innovative, ways that haven’t been tried before or specified in advance. In advance, I could not have identified the specific mechanisms people would have used to solve common pool resource problems of the kind Elinor Ostrom made a career out of identifying. Nor could I, in advance, have specified the “custom of the orchard” that emerged among beekeepers to handle the externalities associated with beekeeping. I’ve criticized this sort of thinking with the terribly clunky term “the 5-1 error” before—the inability to see solutions to collective action problems that evolve organically because one can only conceive of them as functioning by known mechanisms specified in advance.
There is a certain breed of intellectual who holds their intellect in such high esteem that they fail to grasp how little their own mind can contain about the world around them. Thus, if they cannot see or identify a way for people to solve a problem among themselves, that’s as good as saying no such solution exists. Alternatively, intellectuals of this sort can go a step further, and offer a positive argument for why bottom-up solutions cannot work, thus requiring top-down coercive solutions to be created and imposed by…well, intellectuals such as themselves.
In terms of raw brainpower, few people in history could claim to be at the level of John Stuart Mill. Yet Mill had many curious blind spots. He was very concerned with issues of distribution over production, because he believed the potential for productive growth had basically peaked—so all further improvements in the standard of living would have to come about through ever more efficient and clever distribution instead of increased production. He worried that we would soon run out of music to create, because the range of musical notes we can hear is finite and the number of possible note combinations is also finite. From his armchair, he produced an argument for why lighthouses, as public goods, could not be provided on the private market and thus required public provision.
But Mill was wrong about all of these things. It should be obvious to the reader how Mill failed to predict how our capacity for production would continue to grow, and that musical innovation has only grown as well. But these are only failures of prediction on Mill’s part. His conclusion about lighthouses was not merely a failure of prediction, it was a failure of observation as well. Even as Mill made that argument, as Michael Munger points out, “most—more than three-quarters—of all lighthouses had been built, and were being operated, by private individuals.” Had Mill gotten out of his armchair and gone out to a port to check, he could have seen that his argument was mistaken, and people found private solutions to the public goods problem. But he saw no need to check—he had his argument showing private actors couldn’t solve the public goods problem and state action was needed. He saw no mechanism that he could specify in advance to solve this problem—which was as good as proving no such mechanism existed. J. E. Meade, too, had his argument for why beekeepers could not solve the externality problems related to beekeeping, and he felt no need to bother to actually check to see if he was right. He couldn’t think of a way to specify a solution, so no solution existed as far as he was concerned. He was wrong too.
If people were only granted freedom when its benefits can be identified and specified in advance, freedom and innovation would utterly cease. Too many intellectuals see themselves as fit to set the boundaries on other peoples’ freedoms based on nothing more than the limits of their own understanding. As is often the case, Thomas Sowell said it better than anyone else:
READER COMMENTS
David Seltzer
Jun 8 2023 at 3:55pm
Kevin, well done! If I may quote Hayek; he urged social scientists to recognize their “insuperable limits to his knowledge.” The well known example of bottom up spontaneous order is language which emerged not from apriori planning but the need for interpersonal communication. Unfortunately, we will have to deal with the smartest person(s) in the room.
Richard Fulmer
Jun 11 2023 at 4:00pm
People who have been the smartest person in the room all their lives might easily fall into the trap of thinking that they are better able to make decisions for other people than they are themselves.
David Seltzer
Jun 12 2023 at 9:39am
YUP!!
Mark Brady
Jun 8 2023 at 8:46pm
“[John Stuart Mill] was very concerned with issues of distribution over production, because he believed the potential for productive growth had basically peaked—so all further improvements in the standard of living would have to come about through ever more efficient and clever distribution instead of increased production.”
Where exactly does Mill say this?
Kevin Corcoran
Jun 8 2023 at 10:20pm
In Principles of Political Economy, Book IV, chapter 6, “Of the Stationary State,” with a stationary state being defined as “where productivity and population growth have reached their maximum.” Mill argued that advanced countries (or what counted as advanced in 1848) were already on the cusp on being in such a stationary state, writing “It is only in the backward countries of the world that increased production is still an important object: in those most advanced, what is economically needed is a better distribution, of which one indispensable means is a stricter restraint on population.” Kevin Vallier provides an interesting discussion into this aspect of Mill’s thought here.
Knut P. Heen
Jun 9 2023 at 10:59am
Do you know whether this had anything to do with his relationship to Harriet Taylor? I have heard rumors that he changed some of his positions completely after meeting her. Suddenly being concerned about distribution rather than production and so on.
Kevin Corcoran
Jun 9 2023 at 11:46am
I can’t say for sure. The last biography of Mill I read was John Stuart Mill: Victorian Firebrand by Richard Reeves, but it’s been many years since I read it. I don’t remember anything in there to corroborate that specific claim, but that may only show the limits of my memory. The book does describe the tremendous influence Taylor had on Mill, so it’s at least plausible she contributed to his concern with distribution over production, but I don’t know enough to be able to say more than it being generally plausible.
Monte
Jun 9 2023 at 1:01pm
That pretentiousness of which Hayek so skillfully articulated in The Fatal Conceit – the intellectual’s inability to recognize and concede to the innate superiority of the extended order. What most of them lack is that quality which makes the most effective leaders exert authority to maximum advantage – humility:
Thomas Hutcheson
Jun 9 2023 at 9:37pm
Well, we have been waiting quite a while for a bottom up solution to increasing CO2 concentration in the atmosphere.
Jon Murphy
Jun 10 2023 at 12:19pm
There have been many. Unfortunately, in many cases, top-down approaches to the same problem got rid of those. See, for example, the battle over catalytic converters.
Richard Fulmer
Jun 11 2023 at 1:06pm
Some of the top-down approaches such as corn-based ethanol subsidies and mandates have made the problem worse. Unfortunately, like many such programs, the politics is such that it can’t be killed.
If climate change truly is an existential crisis, we should strive to understand it before we take actions that make things worse.
suddyan
Jun 12 2023 at 7:31am
Well Mr Hutcheson, I have been waiting for you to stop your incessant moaning about CO2.
I love CO2. It is plant food. Even its slight recent increase has greened the Earth over the last few decades.
And we need MORE of it. Over the eons of Earth’s existence, we are presently at precariously LOW levels of CO2.
Paul
Jun 12 2023 at 8:51am
“Our results show that the percentage of the total CO2 due to the use of fossil fuels from 1750 to 2018 increased from 0% in 1750 to 12% in 2018, much too low to be the cause of global warming.”
https://journals.lww.com/health-physics/Fulltext/2022/02000/World_Atmospheric_CO2,_Its_14C_Specific_Activity,.2.aspx
Michael Dagnan
Jun 10 2023 at 3:13pm
Thanks for this article. How I observe and precieve human dispositions it’s right on. Sometimes we humans don’t see through the fog of our selves.
Don Boudreaux
Jun 11 2023 at 9:49am
Mr. Hutcheson: The correct criterion is not how much CO2 there is in the atmosphere – or by how much the concentration of CO2 in the atmosphere has been changed by top-down or by bottom-up responses. The correct criterion is how well human beings protect their lives and livelihoods given the fact that the production of much of what makes modern life possible involves as a by-product the emission of CO2.
If the best way to deal with CO2 emissions is to pay little or no attention to the emissions as such but, instead, to adjust to the consequences – say, by building higher sea walls, or by creating more reliable air-conditioning – then by hypothesis we should do the latter rather than the former.
Of course, no one can say in the abstract that the “if” that motivates the previous paragraph is in fact true. But no one can say in the abstract that it isn’t. Fact is, no one can say in the abstract what is the best way, or mix of ways, of dealing with CO2 emissions. But what we can say in the abstract – and say correctly – is that it is wrong to posit reductions of concentrations of CO2 in the atmosphere as an ultimate end. If the cost of reducing CO2 emissions by X amount is $Y, then humanity ‘should’ spend $Y to reduce CO2 emissions by X amount if and only if:
(1) the value to us of having CO2 reduced by X amount is worth at least the value to us of what we would otherwise have enjoyed had we not spent $Y to achieve this reduction of CO2 emissions,
and
(2) the improvement in our lives that would be achieved by a reduction of CO2 emissions by X amount cannot be achieved in some alternative way at a cost of less than $Y.
Because of the enormous complexity of the modern world, real-world knowledge of these details is impossible to get. The best we can do is to make educated guesses governed by realism about political processes. When I look at the economic history of the past few centuries, I see that unprecedented and enormous improvements in human health, safety, and comfort – and in living standards generally – have been generated, and continue to be generated, by CO2-emitting industrial activities. There is clearly a benefit side to the cost side of CO2 emissions.
This benefit side is all-but-ignored by mainstream pundits, professors, and politicians. These people simply take for granted that our standard of living will continue to be high with government-engineered reductions in CO2 emissions, or that the benefit to us of government-engineered CO2 reductions will by hypothesis be worth the cost. The fact that so many people who today are hysterical about CO2 emissions do as you do in your comment here – namely, talk and write of reductions in CO2 emissions as if achieving such reductions is an end in itself – gives me no confidence that the loudest voices screaming about climate change are thinking with sufficient clarity and seriousness about the matter.
Monte
Jun 11 2023 at 6:38pm
I have no idea where Messers. Boudreaux and Hutcheson stand on the climate change spectrum of engagement. Speaking for myself, I fall into the cautious camp. However, I have serious reservations about the costs of mitigation as a % of global GDP, particularly as presented in the 2006 Stern Review on the Economics of Climate Change. 17 years hence, its predictions have thus far proven to be grossly exaggerated.
I’m inclined towards Vaclav Smil’s notions of how to manage the future of our expectations regarding climate change in his book, How the World Really Works: The Science Behind How We Got Here and Where We’re Going:
Monte
Jun 12 2023 at 9:27am
Redirect to correct “grossly exaggerated” link.
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