The other day, I found a list of interesting questions sparked by an IHS seminar, and I wanted to comment on it, but things got long enough that I decided to turn it into a post here.  Here are answers interspersed with the questions, reposted to make things easier:

1. do intellectuals have power?

Yes, within certain constraints.  Intellectuals come up with plenty of ideas, but they need to be “acceptable” in order to gain traction.  The acceptability of an idea will hinge upon a number of factors, such as culture, recent experiences, political rules, and charisma.  The last factor can be a kick in the ribs for your average intellectual, considering that we are (as a group) almost entirely without charisma.  There is a good argument that the ideas of John Maynard Keynes gained traction in England in large part because his main opposition—FA Hayek—was relatively humorless and without charisma.  There was also the fact that the Great Depression had dragged on longer than a Hayekian analysis predicted, and this did cause a London School of Economics crisis of faith, but Keynes was able to get himself into the public and political spheres more on charm than on the correctness of his ideas.

Speaking of Hayek (which I’ll do a lot of in this post, though not really on purpose), he can fit into this answer as well.  His Road To Serfdom, in the United States at least, sparked a major post-war debate on the nature of government, and I would argue that his book—as republished in Reader’s Digest—played a strong role in the dismantling of war socialism in the US.  It also had secondary effects in the UK and Eastern Europe, influencing members of Margaret Thatcher’s cabinet as well as Vaclav Klaus personally.

As for most of our intellectuals, we generally put them into places where they can hold the least power and do the least harm:  academia.

2. why are intellectuals statist?

I would say that it is because intellectuals are fundamentally rationalists.  Our biggest asset is the ability to abstract away from particulars, form models, and determine chains of causal logic.  We instinctively hate chaos (or what we see as chaos) and love plans because we can think through plans and determine which are best.  I should note that I use the term “we” because I readily admit that I struggle against being a rationalist outside of appropriate spheres.

At any rate, it is a fairly simple step to go from rationalist to statist.  Once you have the obvious plan for improving society, you quickly get frustrated at your inability to effect change in your prescribed manner—or at its inability to work precisely as you planned (having forgotten some of the unintended and unforeseen consequences of your naturally brilliant scheme).  Once that occurs, you want to step in and force people to behave in ways which allow you to enact your plan, and because the average intellectual isn’t charismatic (as noted above), it’s easier to work through coercion than persuasion.  This, I would say, causes most intellectuals to become statists.

The intellectuals who are not statists generally have one or more of:  a healthy appreciation of the notion of spontaneous order, a curmudgeonly or individualist streak, an understanding of the Law of Unintended Consequences, and cynicism.

3. how do we change the world?

Very slowly, with great trepidation, and in ways which leave us with as many degrees of freedom as possible to give us (individually and politically) the opportunity to react when things don’t go as planned.  Work on small levels, allow for different plans whenever possible, and tinker at the margins.

Or, if you prefer to take the Estonian route, take everything the Russians do and codify the exact opposite in your constitution.

I personally prefer the first route, especially for the basically-functional portion of the world.  Occasionally, a political opportunity may occur for a major change, but I consider it a feature of Madisonian government that no political group can wrest total control and that even things which you may consider good come watered-down through tough negotiation.  I chalk this up to my belief in Prospect Theory as well as a strong belief that things can be much, much worse.

4. what can be considered an intellectual idea?

As opposed to what?  From question 5, I’d guess as opposed to “popular” ideas.  But there’s a lot of overlap between the two.  Take “Coin” Harvey, for example.  Harvey was an intellectual type, having practiced law and taught, and he wrote a fictional book entitled Coin’s Financial School, about a young fellow named Coin who (oddly enough) set up a financial school in Chicago.  This book was, after the Bible, the second book you would find on pretty much every farmer’s bookshelf, so are his ideas of free silver intellectual or popular?

5. if ideas change the world, is it the intellectual type or the popular type?

I’m not sure that there’s really a big difference between the two, but this might be because I oversimplify intellectual ideas into two camps:  outlandishly nutty, and stuff somebody’s grandmother knew as obvious (noting that this may not necessarily be _correct_, just that it’s _obvious_) and probably comes with a witty Yiddish aphorism.  I would personally consider the differences in ideas more as a matter of rigor and completeness than a fundamental difference.  So the way that I would interpret this question is more of, “When intellectuals and the general public disagree on ideas, who wins and what is the net effect?”  The answer here is that it depends on a lot of factors, including the ones I listed in the response to the first question.  Institutions will shape a lot of human interaction, and it is important to realize that when trying to look at historical examples.  To over-simplify things and hedge my bets, there are a few major setups to describe.  A Madisonian system will have groups of intellectuals and the general public’s power wax and wane, kind of like a tug of war.  A bureaucratic system (think the EU or a royal court) will see “court intellectuals” with more power than the general public and this will remain fairly stable.  Generally, as the government gains more responsibility, these “court intellectuals” gain more power, as they give politicians intellectual respectability.

6. does power trump ideas in reality?

In general, yes.  But the thing with ideas is that they form an interesting boundary on actions so long as these ideas approximate reality.  For example, most economists agree that subsidizing a good will cause a surplus of that good, whereas subsidizing the use of that good will cause a shortage (and the economists who disagree are either looking at very particular cases or don’t know what they’re talking about).  Both of these results are sub-optimal.  Despite this, subsidies remain popular for politicians, even those who know better.  Most farm state Congressmen know that we waste a lot of money subsidizing ethanol and I’d imagine that at least some of the more conservative farm state Congressmen would admit in private that they would rather there not be any subsidies across the board, but as long as [insert other region] gets [insert other subsidy type], they have to vote for ethanol subsidies or they’d be replaced.  This is a prisoner’s dilemma that James Buchanan focused a good number of talks and papers on (many of which can be found in Post-Socialist Political Economy).

That’s a lot of writing and a lot of hesitating without as many conclusive answers as I’d like, honestly, but this is what happens with good, open-ended questions.  I’m just glad that I’m not getting graded on them…

Because the inspirational post ended with a Bastiat note, I’m compelled to end with one as well…  I got my copy of The Law the other day.  I’m a much bigger fan of Economic Sophisms, but I decided that my bookshelves were distinctly lacking in Bastiat-related goodness.  I’m thinking about getting the big Bastiat collection one of these days as well.  I’ve read most of it (though not Economic Harmonies), but it’s rare to find such a great wit balanced with sheer intellectual power.


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