Ignorance and Liberty (Routledge Studies in Social and Political Thought)

Ignorance and Liberty Running from antiquity to the present day, there is a single premise uniting all those who belie...

Author: Lorenzo Infantino

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Ignorance and Liberty

Running from antiquity to the present day, there is a single premise uniting all those who believe in an open society: that the demand for liberty rests on the recognition of human ignorance—we need to be free because we are ignorant and fallible. Free social cooperation permits us to mobilize our knowledge and develop methods of discovery through which we can explore the unknown and continually correct our errors. To assent to free cooperation is to accept critical discussion and democracy, and in this way we are able to increase our rationality and further political and economic development. Improvement in the conditions of our lives, therefore, does not come from the omniscience attributed to some enlightened legislator or planner. Ignorance and Liberty examines how the market liberates us from this idea of a privileged source of knowledge, by presenting the market as a place not only where goods are exchanged, but also where different philosophical ideas and religious beliefs must cohabit. In this way, new horizons are opened up and the sense of an absolute that prevails in a closed world is undermined. Topics addressed include: • • • • •

The liberty of the ancients compared with that of the moderns The failure of psychologism and the question of private property Mandeville and the Scottish moralists Austrian marginalism The destruction of liberty

This book will be of interest to the research community and advanced students in the fields of political theory, political philosophy and the history of ideas and social theory. It follows Infantino’s Individualism in Modern Thought (Routledge, 1998). Lorenzo Infantino is Professor of Philosophy and Social Sciences at Libera Università Internationale degli Studi Sociali, Rome.

Routledge Studies in Social and Political Thought

1 Hayek and After Hayekian liberalism as a research programme Jeremy Shearmur 2 Conflicts in Social Science Edited by Anton van Harskamp 3 Political Thought of André Gorz Adrian Little 4 Corruption, Capitalism and Democracy John Girling 5 Freedom and Culture in Western Society Hans Blokland 6 Freedom in Economics New perspectives in normative analysis Edited by Jean-François Laslier, Marc Fleurbaey, Nicolas Gravel and Alain Trannoy 7 Against Politics On government, anarchy and order Anthony de Jasay 8 Max Weber and Michel Foucault Parallel life works Arpad Szakolczai 9 The Political Economy of Civil Society and Human Rights G.B.Madison 10 On Durkheim’s Elementary Forms of Religious Life Edited by W.S.F.Pickering, W.Watts Miller and N.J. Allen 11 Classical Individualism The supreme importance of each human being Tibor R.Machan 12 The Age of Reasons Quixotism, sentimentalism and political economy in eighteenth-century Britain Wendy Motooka 13 Individualism in Modern Thought From Adam Smith to Hayek Lorenzo Infantino 14 Property and Power in Social Theory A study in intellectual rivalry Dick Pels 15 Wittgenstein and the Idea of a Critical Social Theory A Critique of Giddens, Habermas and Bhaskar Nigel Pleasants 16 Marxism and Human Nature Sean Sayers 17 Goffman and Social Organization Studies in a sociological legacy Edited by Greg Smith 18 Situating Hayek Phenomenology and the neo-liberal project Mark J.Smith

19 The Reading of Theoretical Texts Peter Ekegren 20 The Nature of Capital Marx and Foucault Richard Marsden 21 The Age of Chance Gambling in Western Culture Gerda Reith 22 Reflexive Historical Society Arpad Szakolczai 23 Durkheim and Representations Edited by W.S.F.Pickering 24 The Social and Political Thought of Noam Chomsky Alison Edgley 25 Hayek’s Liberalism and Its Origins His idea of Spontaneous Order and the Scottish Enlightenment Christina Petsoulas 26 Metaphor and the Dynamics of Knowledge Sabine Maasen and Peter Weingart 27 Living with Markets Jeremy Shearmur 28 Durkheim’s Suicide A Century of Research and Debate Edited by W.S.F.Pickering and Geoffrey Walford 29 Post-Marxism An intellectual history Stuart Sim 30 The Intellectual as Stranger Studies in spokespersonship Dick Pels 31 Hermeneutic Dialogue and Social Science A critique of Gadamer and Habermas Austin Harrington 32 Methodological Individualism Background, history and meaning Lars Udehn 33 John Stuart Mill and Freedom of Expression The genesis of a theory K.C.O’Rourke 34 The Politics of Atrocity and Reconciliation From terror to trauma Michael Humphrey 35 Marx and Wittgenstein Knowledge, morality, politics Edited by Gavin Kitchmg and Nigel Pleasants 36 The Genesis of Modernity Arpad Szakolczai 37 Ignorance and Liberty Lorenzo Infantino

Ignorance and Liberty

Lorenzo Infantino

Routledge Taylor & Francis Group

LONDON AND NEW YORK

First published 2003 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2003. © 2003 Lorenzo Infantino All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN 0-203-52232-X Master e-book ISBN

ISBN 0-203-54796-9 (Adobe eReader Format) ISBN 0-415-28573-9 (Print Edition)

To my parents

Contents

1

Acknowledgments

ix

Introduction

1

‘True individualism’ and the market 1 The harmful heredity of Platonic philosophy 2 From the state of ignorance to the idea of society as a spontaneous order 4 Spontaneous orders and the birth of social sciences 7 2

The liberty of the ancients compared with that of moderns

8

Aspects of liberty: the market, critical discussion and democracy 8 Pericles: the market and an open society 11 The market in the plays of Aristophanes 13 The habitat of liberty 16 Solon and the ‘struggle for law’ 19 Athens and Sparta: liberty and tribalism 25 Contractual freedom in Athens and Rome 29 3

The gnoseological roots of liberty and tribalism Athens: ignorance and liberty 32 Plato: re-establishment of the ‘privileged point of view on the world’ 37 The socio-economic characteristics of the Platonic city 41 Aristotle: between tribalism and the market 48 Cicero: between liberty and Platonism 56 vii

32

viii

4

Contents

The failure of psychologism and the question of private property Conversion versus critical discussion 62 The doctrine of ‘manifest truth’ 66 Harrington and Bernier: private property and freedom

5

62

69

Mandeville and the Scottish moralists: the discovery of society as a spontaneous order

77

A science of Good and Evil is impossible: moral rules are a product of the social process 77 The question of economic value 82 Ignorance, fallibility and the study of ‘latent functions’ 85 Liberty as the habitat of development 89 The origins of modern capitalism 94 6

Austrian marginalism: the limits of knowledge and society as a spontaneous order

99

Carl Menger and Adam Smith 99 Menger and the subjectivist theory of value 101 Against the German Historical School of Economics 103 The conflict between the ‘Austrian’ and Walrasian approaches 108 Ignorance and disequilibrium 113 Hayek: unification of the Austrian and Scottish traditions 115 Abstract order and mobilization of knowledge 120 Property and freedom 126 7

The intellectualistic hubris and the destruction of liberty There are no ‘privileged’ sources of knowledge 128 Historicism, gnosis and utopia 133 The myth of Sparta and the ‘two French revolutions’ The socialist roots of Nazism 144 Liberty and change 147 Notes References Index

128

137

151 193 206

Acknowledgments

I would like to thank Professor Giovanni Reale, who kindly responded to my request to read the second and third chapters. I would also like to thank Massimo Baldini, who read the entire manuscript. Over the years, I have discussed the basic topics treated here with Dario Antiseri and Luciano Pellicani. My debt to both of them goes far beyond what is indicated in the footnotes. Special thanks are due to Sergio Ricossa, who for me has always been a scientific and moral point of reference. Finally, many thanks to Mrs Gwyneth Weston, who translated my previous book on Individualism in Modern Thought and to Mrs Cora Hahn, who worked with me on this one. As usual, the responsibility for what remains is completely mine.

ix

1

Introduction

‘True individualism’ and the market Very often, when there is a demand for liberty, a high level of knowledge and wisdom is attributed to mankind. And yet the most authentic liberal tradition takes the completely opposite point of view. Liberal institutions are advocated as a defense against human error. Ignorance and fallibility are our anthropologic traits. During the twentieth century, Friedrich A.von Hayek spoke of ‘true individualism’ and ‘false individualism’.1 The former refers to those who believe that mobilization of knowledge and individual energies is a necessity caused by our ignorance. The latter refers to those who attribute to all individuals knowledge of so-called ‘relevant data’ and negate, in this way, the problematic situations that foster the need for liberty: ‘a factual assumption […] which is never satisfied in real life and which, if it were ever true, would make the existence of those bodies of rules which we call morals and law not only superfluous, but unaccountable and contrary to the assumption’.2 The tradition that bases demand for liberty on the limits of human knowledge is much more widespread than is commonly believed. It has extremely profound roots, to which Karl R.Popper vigorously called our attention. In The Open Society and Its Enemies, Popper points out the gnoseological assumptions of liberty and tribalism, by going back to the events in Athens and Sparta. Liberty is nourished with gnoseological fallibilism; the bases of tribalism are absolutistic conceptions of knowledge. Popper entered the field of political philosophy after he elaborated in the Logik der Forschung (The Logic of Scientific Discovery) the idea of fallibility of scientific knowledge. Scientific knowledge increases only 1

2

Introduction

to the extent that its assertions are subjected to criticism. Thus, errors can be detected and new conjectures can be formulated in a process that is continually open. Growth of scientific knowledge cannot occur in a context dominated by the fundamentum inconcussum, the ‘privileged point of view on the world’. This leads to the idea of fallibilism, fostered by critical discussion. Fallibilism is the name for liberty in the field of scientific research. And liberty is the name for fallibilism in the field of politics. Obviously, the crux of the problem is to determine how to become liberated from the ‘privileged point of view on the world’. The tradition of ‘true individualism’ considers the market the source of freedom and liberty, because it is not only the place where goods are exchanged, but also the point of encounter for men with different philosophical ideas and different religious beliefs. In order for the market to function, these different world-views must cohabit on an equal basis. Two factors lead to this end. The first is produced by contact among men, since it opens new horizons and undermines the sense of absolute that prevails in a closed world. The second factor is completely utilitarian: we put our personal faith in the private domain, so we can participate in the market and obtain the means to achieve our goals. The market is like a powerful acid that irreparably erodes the ‘privileged point of view on the world’. It replaces the fundamentum inconcussum with the recognition of our ineradicable ignorance and fallibility and the consequent competitive search for suitable solutions to our problems. This occurs primarily on an economic level. But the logic of competition involves the field of knowledge and branches out to the area of politics to become democracy. The harmful heredity of Platonic philosophy Where there is no market, there can be no gnoseological fallibilism and democracy. This is clearly shown by the events of the Athenian polis, which will be discussed in the following chapters. It is important here to point out that the first and the most complete formulation of the connection among the market, gnoseological fallibilism and democracy can be found in Plato, not because he supported an ‘open society’, but for exactly the opposite reason. Plato’s objective was to re-establish a closed society. He was interested in identifying the conditions that make it possible. This implies that identifying the habitat of a closed world is the same as identifying that of an open one and then rejecting it.

Introduction

3

Plato was hostile to gnoseological fallibilism and democracy. As Jacob Burckhardt maintains, he wanted to achieve ‘complete suppression of the individual’.3 This aim was also clearly expressed in the Laws, which are generally considered a watering-down of the plan set forth in the Republic. Athenian life was ‘polytheistic’. Max Weber describes it as follows: ‘Hellenic man at times sacrificed to Aphrodite and at other times to Apollo and, above all, […] everybody sacrificed to the gods of his city’.4 Polytheism involves that there is no science of good and evil. In Weber’s words, this means that ‘fate, and certainly not “science”, hold sway over these gods and their struggles’.5 Polytheism also involves that, with no science of good and evil, religious beliefs are a private choice. Though there may be an accepted public cult, it does not prevent the expression of individual choices as well. Apropos of the life of the polis, Burckhardt writes: ‘Undoubtedly, the family gods of property, business, and love had much more influence on feelings than the public cult in the temples’. 6 And Burchkardt adds: ‘the family and its gods were the only refuge for the soul when it wanted to retreat from the polis. The polis could not, and in reality did not, want to interfere with the soul of the individual’.7 Plato’s aim was completely different. He wanted to replace fallibilism with gnoseological absolutism. His objective was to establish a science of good and evil, whose decrees made all critical discussion and civil and political freedom impossible. Consequently, it is not surprising that Plato thought all private cults should be repressed: ‘No one shall possess a shrine in his own house: when anyone is moved in spirit to do sacrifice, he shall go to the public places to sacrifice, and he shall hand over his oblation to the priests and priestesses to whom belongs the consecrations thereof; and he himself, together with any associates he may choose, shall join in the prayers’.8 Moreover, Plato added: ‘Shrines of the gods no one must possess in a private house; and if anyone is proved to possess and worship at any shrine other than the public shrines […], he that notices the fact shall inform the Lawwardens […]. And if anyone be proved to have committed an impious act […] the Law-wardens shall judge […], and then shall bring the offenders before the court, and shall impose upon them the due penalty for their impiety’. 9 Therefore, Plato aimed to establish a sort of religious police, based on the delation. It is not by chance that he said: ‘if any magistrate on hearing of the matter fails to do this, he himself shall be liable to a charge of impiety’.10

4

Introduction

Plato’s plan implies ‘complete suppression of the individual’ and the consequent repeal of all forms of critical discussion, and civil and political freedom. The instrument intended to do this was the suppression of private property and the institutions connected with it: a combination that we call ‘market’. Plato saw the market as a dangerous tool that broadened the range of choices, and fostered individual freedom and critical discussion. This is why he wanted to abolish private property. He also wanted the city to be far from the sea, in order to avoid all contact with what was different and, consequently, could threaten the ‘privileged point of view on the world’. Thus, Plato said that a seaside city ‘would need a mighty saviour and divine lawgivers, if, with such a character, it was to avoid having a variety of luxurious and depraved habits’.11 He added that ‘the sea is, in very truth, a right briny and bitter neighbour’, by ‘filling the markets of the city with foreign merchandise and retail trading, and breeding in men’s souls knavish and tricky ways, it renders the city faithless and loveless’.12 Therefore, in free economic activity Plato saw a power that could destroy gnoseological absolutism. And his objective was to annihilate that power. Plato’s hostility to the market could not have been clearer. Since his intention was to prevent an ‘open society’, he fought against private property and the market. This will be dealt with more extensively in the following chapters, where we also see that Aristotle, who defended private property, did not hesitate to consider politics an ‘architectonic’ science of society. Apropos of Aristotle’s position, Werner Jaeger rightly states: ‘It is thoroughly Platonic in identifying the end of the State with the ethical end of the individual; for this is the meaning of the proposition from which the inquiry proceeds, that the best State is that which assures its citizens of the best life […]. In saying this, Aristotle is by no means subordinating the State to the welfare of the individual, as a liberal would do, but is deriving, as Plato does, the categories for judging the value of the State from ethical standards that apply to the soul of individual’.13 From the state of ignorance to the idea of society as a spontaneous order As we shall see later, in ancient Greece there was no lack of men with liberal political ideas. Solon spoke of the man’s ignorance, a state that does not permit any certainty about the outcome of actions. Solon

Introduction

5

rejected all forms of intellectualistic hubris and realized that fate has more effect on human life than knowledge does. In ancient Greece there was also no lack of outstanding supporters of critical discussion. For example, there was Socrates or Pericles. Therefore, it is easy to find in Athens important elements of ‘true individualism’. And it is consequent to see the social model of Athens as diametrically opposite to the social model of Sparta (and Plato). However, we can maintain, as Ortega y Gasset does, that ‘all the Greeks were blind to what today we call society’.14 In other words, Greek culture had no idea that society could be a spontaneous order (cosmos). Society was always considered an intentionally constructed order (taxis). This prevented fertile comprehension of man’s ignorance and fallibility from bearing better fruits. Carried to its logical conclusions, gnoseological fallibilism destroys the myth of the ‘great legislator’. First of all, fallibilism implies that, since rulers are ignorant and fallible as are all men, they should have limited power. It also implies that, since no one knows how to solve all the problems of social life, society cannot have a prescribed order; hence, the idea that society might be constructed intentionally must be rejected. Consequently, a different path must be explored, liberating us from ‘our anthropomorphic habits of thought’, which lead us to believe that everything is ‘due to the design of some thinking mind’.15 And this forces us to no longer see the social order as an external bond, imposed by political power; on the contrary, we have to see it as an internal bond, endogenously produced. Therefore, society is a spontaneous order. This brings to the foreground the theoretical contributions of Mandeville and the Scottish moralists (cf. Chapter 4), who were the first to consider society a spontaneous order. Their ideas had various offspring. For example, their works were preparative for the Austrian School of Economics (cf. Chapter 5). And yet, even before that, their ideas influenced Benjamin Constant, who studied for a time in Edinburgh, and the French post-revolutionary liberals, particularly Alexis de Tocqueville. This explains why Constant strongly emphasized the contrast between the Spartan social model and that of Athens, and saw in the latter the features of modern liberty. It should be mentioned here that, in discussing Filangieri’s Scienza delta legislazione (Science of Legislation), Constant said that Filangieri himself committed the unforgivable error of considering the legislator ‘as a separate being, above other men, and necessarily better and more enlightened than others’. 16 According to Constant, if one accepts

6

Introduction

Filangieri’s statement, one might believe that legislation descends ‘from heavens, pure and infallible, without need for intermediaries, whose errors falsify it, whose personal ambitions distort it, and whose vices misconstrue and override it […]. Legislation is the work of men and the work should not be trusted any more than the men’.17 Since Constant was aware of human ignorance and fallibility, he supported the limitation of power. The ‘abstract recognition of the sovereignty of the people does not in the least increase the amount of liberty given to the individuals’.18 In fact, ‘if we attribute to that sovereignty an amplitude which it must not have, liberty may be lost notwithstanding the principle, or even through it’.19 Constant’s analysis is extremely clear: When you establish that the sovereignty of the people is unlimited, you create and toss at random into human society a degree of power which is too large in itself and which is bound to constitute an evil, in whatever hands it is placed. Entrust it to one man, to several, to all, you will still find that it is equally an evil. You will think that it is the fault of the holders of such power and, according to the circumstances, you will accuse in turn monarchy, aristocracy, democracy, mixed governments or the representative system. You will be wrong: it is in fact the degree of force, not its holders, which must be denounced.20 Limitation of power can only be attained through the rule of law. This is an abstract order, which sets the boundaries among the actions of individuals. Thus, it preserves personal freedom, protects from arbitrariness, and leaves undetermined the concrete order individuals will achieve. Constant arrived at the conclusion: ‘What prevents arbitrary power is the observance of procedures. Procedures are the tutelary deities of societies: procedures alone protect innocence, they are the only means for men to relate to one another. Everything else is obscure: everything is handed over to solitary conscience and vacillating opinion. Procedures alone are fully in evidence; it is to them that the oppressed may appeal’.21 As we shall see, this abstract order is the legal structure of the market society. Seconding Constant, Tocqueville was to say that ‘no people and no individual, however enlightened they may be, can lay claim to infallibility’.22 He recognized that ‘feelings and opinion are recruited, the heart is enlarged, and the human mind is developed by the

Introduction

7

reciprocal influence of men upon one another’.23 And he completely entrusted the formation of the concrete social order to the ‘principle of self-interest’, 24 within the habitat of the rule of law, where all individuals are on the same legal footing and mobilize the knowledge dispersed among them.25 All this agreed perfectly with the analysis that had been made by the Scottish moralists, especially Adam Smith. Spontaneous orders and the birth of social sciences The discovery of ‘structures’ generated unintentionally by human action, i.e. which are not the result of a conscious plan, occured at the same time as the birth of social sciences. This explains why Hayek writes: ‘It would be no exaggeration to say that social theory begins with—and has an object because of—the discovery that there exist orderly structures which are the product of the action of many men but are not the result of human design’.26 We can identify an entire world of unplanned institutions, for example, language, law, family, city, market and many others. And yet we cannot forget that society itself is a spontaneous order. In other words, the bond which unites acting individuals has an internal nature; it is produced unintentionally by individuals themselves. As we already know, this has relevant political consequences. These will be discussed later. Here, the most important point is something else. There is an ‘objective’ world, the world of spontaneous orders, generated by the aggregation of our actions. It does not reflect our intentions. We often look at it as at a surprisingly obscure universe. Hence, the need to explain it. To this end social sciences were born. They help us to understand how actions aimed at a specific goal also produced (and produce) norms and social institutions. In other words, social sciences shed light on the function that norms and social institutions carry out for our benefit. A few pages before dealing with the ‘principle of self-interest’, Tocqueville wrote: ‘the science of association is the mother of science; the progress of all the rest depends upon the progress it has made’.27 Tocqueville added: ‘If men are to remain civilized or to become so, the art of association together must grow and improve in the same ratio in which the equality of conditions is increased’.28

2 The liberty of the ancients compared with that of moderns

Aspects of liberty: the market, critical discussion and democracy Liberty is not merely a political question. The problem can be clarified by comparing the liberty of the ancients with that of the moderns. This shows that, to deal with the question completely, we must examine jointly the economic, cultural and political aspects of the question. Even though it stresses the political aspect of liberty, Benjamin Constant’s classic text substantiates this.1 And Constant’s position is also found in the work of Eduard Meyer, another classic author, who dwells on the economic aspects when comparing ancient and modern times, but points out the ties among economic liberty, political liberty and critical discussion.2 In more recent years, in dealing with ancient and modern concepts of liberty, Karl Popper has dwelt on the problem of critical discussion and the growth of knowledge. And yet this has involved examination of political and economic aspects as well. 3 That is not all. It is moreover important that Constant, Meyer and Popper see economic liberty as the basis of critical discussion and democracy. There are also two authors, Lord Acton and Bruno Leoni, who undoubtedly have compared the liberty of the ancients with that of the moderns to point out the connection among economic development, political development and the growth of knowledge; but their primary aim is to identify the conditions that make possible liberty in the modern sense of the word.4 If by ‘liberty of the moderns’ we mean the possibility to criticize, dissent, compete, ‘falsify’ and innovate, all these authors agree when they maintain that this kind of liberty existed in Athens or Rome. Let us examine first how a strong connection among economic development, political development and an increase in knowledge emerges from the writings of Constant, Meyer and Popper. 8

Liberty of ancients compared with moderns

9

Benjamin Constant Constant asserts that, ‘of all the ancient states, Athens was the one which most resembles the modern ones’.5 Constant himself points out: Athens was of all the Greek republics the most closely engaged in trade: thus it allowed to its citizens an infinitely greater liberty than Sparta or Rome. If I could enter into historical details, I would show you that, among the Athenians, commerce had removed several of the differences which distinguished the ancient from modern peoples. The spirit of the Athenian merchants was similar to that of the merchants of our days.[…]. In their relations with strangers, we shall see them extending the rights of citizenship to whoever would, by moving among them with his family, establish some trade or industry.6 Constant adds that in Athens liberty was the source of a process which increased knowledge, because liberty, ‘by submitting to all citizens, without exception, the care and assessment of their most sacred interests, enlarges their spirit, ennobles their thoughts, and establishes among them a kind of intellectual equality which forms the glory and power of a people’.7 In other words, Constant shows how economic development, political development and growth in knowledge were closely connected in Athens. And he also sees economic liberty as the basis of critical discussion and democracy.

Eduard Meyer Meyer’s well-known essay, Die wirtschaftliche Entwicktung des Altertums, was a strong reply to Karl Rodbertus and Karl Bücher, who had precluded that markets and exchange had ever been at the center of ancient economy. In their view, the ancient economy was organized according to the principle of òikos or self-sufficiency.8 Meyer writes: ‘From the sixth century Athens begins to compete more and more actively and, due to the superiority of its goods and the splendid work of its vase painters, wrests one market after the other from its ancient rivals’.9 And this has profound consequences: ‘With the penetration of money and trade into every state and territory, all social and economic relationships are radically transformed’.10 Previously ‘the City-state was cruder; the city population with the nobility in control

10


held sway over the politically dependent rural population. Now the rural population is emancipated and the concept of citizen is extended to all free inhabitants of the country’.11 ‘The first democracy develops in typical form in Athens, namely, different degrees of political rights based on property and individual contributions are eliminated’.12 Meyer also maintains that Athens was the site of great cultural frenzy and that the ‘uninterrupted foundation of cities’ was the ‘real instrument of civilization and the principal means of spreading it’. Thus, the East was attracted to Hellenic civilization, which was elevated to a ‘world civilization’. 13 This was the beginning of a cosmopolitanism that, according to Meyer, is exemplified by both Athens and Rome.14 Therefore, Meyer does not merely point out the connection among the economic, cultural and political aspects. He maintains that it was economic development that set off political development and the growth in knowledge. Karl R.Popper From the historical point of view, Popper benefited from Meyer’s monumental Geschichte des Altertums, because he accepted its idea that the establishment of the market led to democracy and the growth of knowledge. We shall dwell mainly on the question of the market. Popper writes: colonization led to cultural contacts; and these, in turn, created what was perhaps the worst danger to the closed society—commerce, and a new class engaged in trade and seafaring. By the sixth century B.C., this development had led to the partial dissolution of the old ways of life, and even to a series of political revolutions and reactions. And it had led not only to attempts to retain and to arrest tribalism by force, as in Sparta, but also to that great spiritual revolution, the invention of critical discussion, and, in consequence, of thought that was free from magical obsessions.15 As we can see, Popper associates the birth of critical discussion with the establishment of the market. And that is not all. He ascribes the birth of democracy to economic development:


11

Perhaps the most powerful cause of the breakdown of the closed society was the development of sea-communications and commerce. Close contact with other tribes is liable to undermine the feeling of necessity with which tribal institutions are viewed; and trade commercial initiative appears to be one of the few forms in which individual initiative and independence can assert itself […] the naval policy of Athens was based upon its harbours, especially the Piraeus, the centre of commerce and the stronghold of the democratic party […]. Accordingly, we find that for more than a century the empire, the fleet, the harbour, and the walls were hated by the oligarchic parties of Athens as the symbols of democracy and as the sources of its strength which they hoped one day to destroy.16 Consequently, Popper too stresses the connection among economy, politics and knowledge and considers the establishment of the market the basis for the origin of critical discussion and democracy.17

Pericles: the market and an open society We can now try to trace the three dimensions of liberty, here identified with the help of Constant, Meyer and Popper, back to Pericles. Since these authors consider economic liberty the basis of cultural and political development, let us first examine Pericles’ attitude toward the market. Pericles states: ‘Because of the greatness of our city, the fruits of the whole earth flow in upon us so that we enjoy the goods of other countries as freely as our own’.18 Pericles counts the free importation of goods produced in other countries among the merits of his city. Thus, in Athens, liberty also meant free trade. Could it have been otherwise? Karl Polanyi, an expert in the debate on òikos, poses the question as follows: democracy, in the Greek sense, required material safeguards to prevent the bribing of the public by the rich. As the only effective guarantee, the wealthy were to be prevented from feeding the politically active populace that was engaged in sitting on the jury, voting in the assembly, administering in the Prytany. To the Athenian mind, two seemingly contradictory requirements followed—the distribution of food to be done by the polis itself,

12


yet bureaucracy was not to be permitted to enter. For democracy meant rule of the people by the people, not by their representatives nor by bureaucracy. Both representation and bureaucracy were looked upon as its antithesis […]. But how could this distribution by the state be accomplished without a bureaucracy? In Athens the food market served as an answer.19 In a democracy, where the citizenry was expected to do the administering itself, the distribution of food required the market.20 Therefore, Pericles takes up ‘the humble institution of the market’,21 because it can solve the economic problem and safeguard political democracy. But it is also obvious that the basis for critical discussion and the birth of democracy is the market. Commerce brings new values, new beliefs and new ideas.22 Competition among goods is a cultural encounter. This leads to critical discussion and democracy, which become the way to deal with problems of the collectivity. It was not by chance that Pericles declared: ‘In our opinion action does not suffer from discussion but, rather, from the want of that instruction which is gained by discussion preparatory to the action’.23 Pericles himself underscored the originality of the Athenian experiment: Our institutions do not emulate the laws of the others. We do not copy our neighbors: rather, we are an example to them. Our system is called democracy, for it respects the majority and not the few.24 And he pointed out: the claim of excellence is also recognized; and when a citizen is in any way distinguished, he is generally preferred to the public service, not in rotation, but for merit. Nor again is there any bar in poverty and obscurity of rank to man who can do the state some service.25 Consequently, following Glotz, it can be said that ‘Attica became the classic home of liberty’.26 More extensively, Glotz explains: the Athenians, proud as they were of being free citizens, were perhaps still prouder of being equal citizens. Equality was for


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them the condition of liberty; it was, indeed, because they were all brothers, born of a common mother, that they could be neither the slaves nor the masters of one another. The only words which serve in their language to distinguish the republican regime from all others were isonomia, equality before the law, and isegoria, equal right of speech.27 The fact is that ‘the principle of modern liberalism’ made its appearance in Athens.28 ‘The State was called upon to use its power in the service of the individual’.29 The crucial point is that interference of the state in the life of the citizens becomes unnecessary, because they solve their problems by means of the market and by comparing their individual decisions. All this happened—as Constant stressed—despite the fact that ‘slaves took care of most the work’ and notwithstanding that ‘several of the other circumstances which determined the character of ancient nations existed in Athens’.30 At this point, perhaps, one should accept Popper’s more thorough evaluation: I am far from defending everything that Athens did in building up her empire, and I certainly do not wish to defend wanton attacks (if such have occurred), or acts of brutality; nor do I forget that Athenian democracy was still based on slavery. But it is necessary, I believe, to see that tribalist exclusiveness and self-sufficiency could be superseded only by some form of imperialism. And it must be said that certain of the imperialist measures introduced by Athens were rather liberal.31 Reflection on Popper’s comments will probably lead to the realization that Athens used slaves, because its own population was too small in respect of the large economic activity.32 It follows that, in a context of the free circulation of people—which would be in perfect agreement with Pericles’ statement that ‘Athens is thrown open to the world and we never expel a foreigner’ 33 that phenomenon would not have occured. Slavery is not in the genetic code of liberty.

The market in the plays of Aristophanes The presence of the market in Athenian democracy can be confirmed in the plays of Aristophanes and should not be underestimated. Since the

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market itself is the basis of critical discussion and democracy, any possible evidence of its presence must be brought to light. However, we must first answer the question of whether a play can be considered ‘evidence’. Victor Ehrenberg says: It is my belief that nowhere but in comedy are the facts of social and economic life given merely as a background and to create an atmosphere. We must, of course, take into account all possible source of error, such as comic exaggeration and distortion, unreal and impossible events, ‘typical’ persons and topics. Even so, we have in comedy excellent evidence of many real facts, above all of those relating to the general conditions of life which form the background of the comic plot34 because the poet was one of the people, the theatre was an affair of theirs, and there was food for their natural delight in every kind of agon. The theatre was the Polis.35 Thus, if it is correct to use a play to learn how social cooperation occurred, let us see what Ehrenberg manages to draw from Aristophanes. First of all, ‘it is true that Athens received goods from almost every part of the producing world’.36 It ‘never aimed at economic selfsufficiency, and neither in peace nor in war did the idea ever occur to the Athenians of protecting attic production against import from abroad’.37 Moreover, ‘the fact that Athenian silver coinage reached all parts of the world is perhaps indicated by a comic invention when Theseus is said to have changed Charon’s fee into the typically Athenian two obols’.38 The market became the centre of both trade and craftsmanship, and therefore the place where one could hope to find every sort of work. This coordination between production and sale, both of which were types of business on a purely monetary basis, made the market an organized unit, where a widely specialized trade found safe and convenient accommodation.39 That is not all:


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the fact that part of the women’s home-production was sold in the market makes it clear that even in this the most persistent branch of home-industry the days of òikos-economy were past and gone.40 The Athenians were the main protagonists of commercial traffic: ‘The Athenian citizens ruled in ekklesia and trade, and none less in the harbor than in the market, that is to say, none less in emporia than in kapelia’.41 What about the metics? If the metics had been so prominent in economic life as most modern scholars believe, it would be impossible that nearly all the tradesmen and merchants and artisans in comedy are citizens. Having an audience of citizens, or even of citizens and metics together, the poets no doubt usually preferred to present citizens, but they could not regularly depict general conditions which were contrary to the real facts.42 Hence, the conclusion that ‘the modern view that pratically all trade, banking and craftsmanship were in the hands of metics is false’.43 Furthermore: There was no division of labor between citizen and metic, in the sense that service of the State and agriculture were for the citizen, trade and handcrafts for the metic […]. On the other hand, even in vocations where metics formed the majority, they were never so prominent that their position could be considered analogous to that of the citizen in agriculture. It is still more incorrect to speak of a ‘deep social gap’ between citizens and metics, for both, whether rich or poor, were on roughly the same social level, and actually formed one and the same social body. The unity of the bourgeois class must be extended to include the metics.44 Athens was an ‘open society’. ‘It was the large number of foreigners which won the Athenian high praise for their philoxenia’.45 ‘In Athens and even more in the Piraeus, there was a strange mixture of language and dialect, of clothes and ways of life’.46 The picture that emerges from Aristophanes’ plays raises the question of what rules enabled people with different philosophical

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and religious views of the world to live together? To answer this question, we must discover the normative habitat of this type of cohabitation.47 The habitat of liberty Since the market was the economic basis of the Athenian polis, we must establish what rules facilitated it and made critical discussion and political democracy possible. Let us turn immediately to suggestions from Acton and Leoni. Acton considers Solon not only the ‘wisest man to be found in Athens, but the most profound political genius of antiquity’.48 Solon’s great merit was that he understood that concentrating power was not a proper response to political disorder.49 Acton says: The upper class had possessed the right of making and administering the laws, and he [Solon] left them in possession, only transferring to wealth what had been the privilege of birth. To the rich, who alone had the means of sustaining the burden of public service in taxation and war, Solon gave a share of power proportioned to the demands made on their resources. The poorest classes were exempt from direct taxes, but […] Solon gave them a voice in electing magistrates from the classes above them, and the right of calling them into account. This concession, apparently so slender, was the beginning of a mighty change. It introduced the idea that a man ought to have a voice in selecting those to whose rectitude and wisdom he is compelled to trust his fortune, his family and his life. And this idea completely inverted the notion of human authority, for it inaugurated the reign of moral influence where all political power had to depend on moral force. Government by consent superseded government by compulsion, and the pyramid which had stood on a point was made to stand upon its base. By making every citizen the guardian of his own interest Solon admitted the element of Democracy into the state’.50 Solon taught that it is ‘the essence of Democracy […] to obey no master but the law’.51 In reference to Pericles, Acton states that the period in which ‘the Greeks passed from dim fancies of mythology to the fierce light of science was the age of Pericles, […] the grandest movement in the


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profane annals of mankind, for to it we owe […] much of our philosophy and far the better part of the political knowledge we possess’.52 Furthermore: Pericles resolutely struck away all the props that still sustained the artificial preponderance of wealth. For the ancient doctrine that the power goes with land, he introduced the idea that power ought to be so equitably diffused as to afford equal security to all. That one part of the community should govern the whole, or that one class should make laws for another, he declared to be tyrannical. The abolition of privilege would have served only to transfer the supremacy from the rich to the poor, if Pericles had not redressed the balance by restricting the right of citizenship to Athenians of pure descent. By this measure the class which formed what we should call the third estate was brought to 14,000 citizens, and became about equal in number with the higher ranks.53 We come now to the central issue. Acton writes: That none might be excluded by poverty, he caused the poor to be paid for their attendance out of the funds of the state […]. The instrument of his sway was the art of speaking. He governed by persuasion. Everything was decided by argument in open deliberation, and every influence bowed before the ascendency of mind.54 Acton maintains that Solon’s great merit was to have reversed the formula of authority and introduced a government based on consensus. He asserts that Pericles governed by consensus, which was reached by open discussion. This enables us to give a preliminary answer to the question of what conditions foster the liberty of the moderns. The answer is renunciation of a ‘privileged point of view on the world’. In other words, the equality sought by Solon and Pericles excludes the possibility of a pre-determined and sure person we can rely on to solve our problems. Mankind’s greatest need is knowledge, and the way to satisfy it is to discuss openly different solutions. In economy and politics this happens by means of the market and democracy. However, discussion applies to all fields and leads to an increase in rationality.

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Thus, the first necessary condition for liberty is renunciation of the ‘privileged point of view on the world’. This renunciation leads to equality before the law, a legal formula whose ‘manifest function’ fosters the processes we call democracy and the market. In addition, besides this, equality before the law fulfils the ‘latent function’ to foster another and more profound procedure: that of mobilizing knowledge. It does this through the open discussion made possible by the lack of a ‘privileged point of view on the world’ and by the consequent contractual freedom related to the equality before the law. Therefore, Acton is right when he says that the Athenians ‘resolved to govern by concurrence’.55 Consequently, it must be pointed out that liberty is made possible by the renunciation of a ‘privileged point of view on the world’, which in legal terms is expressed by the principle of equality before the law. And one can conclude, as Bruno Leoni does, that ‘freedom is not only an economic or a political concept, but also, and probably above all, a legal concept, as it necessarily involves a whole complex of legal consequences’.56 Moreover, it is possible to add that, ‘while the political approach […] is complementary to the economic one in any attempt to redefine freedom, the legal approach is complementary to both’.57 Leoni realizes that equality before the law is the institutional expression of the renunciation of the ‘privileged point of view on the world’ and of the decision to rely on individualism, on a procedure open to participation of subjects who are now on the same level. The immediate consequence of this is the independence of the law from legislation. The legislator who represents a ‘privileged point of view on the world’ no longer exists: ‘as language and fashion are the products of the convergence of spontaneous actions and decisions on the part of a vast number of individuals, so the law too can, in theory, just as well be a product of a similar convergence in other fields’.58 This is why Leoni stresses the concept of law in Athens and Rome (and also in England), which is a concept hostile to the revival of the grand legislator and to the lack of independence of the law from legislation.59 In reference to Athens, Leoni says: Tysamenes’ reformation of the Athenian constitution at the end of the fifth century offers us an example of a remedy against this inconvenience that could be usefully pondered by contemporary political scientists and politicians. A rigid and complex procedure was then introduced in Athens in order to discipline legislative


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innovations. Every bill proposed by a citizen […] was thoroughly studied by a special committee of magistrates (nomotetai) whose task was precisely that of defending the previous legislation against the new proposal.60 Apropos of Rome, he gets to the heart of the problem more directly: ‘it is said that the Romans had little taste for historical and sociological considerations. But they did have a perfectly clear view’ of the fact that production necessarily involves very many people and implies long periods of time.61 To support this, Leoni recounts what, according to Cicero, was maintained by Cato the Censor: Our own commonwealth was based upon the genius, not of one man, but of many; it was founded, not in one generation, but in a long period of several centuries and many ages of men […] there never has lived a man possessed of so great genius that nothing could escape him, nor could the combined powers of all the men living at one time possibly make all necessary provisions for the future without the aid of actual experience and the test of time.62 Therefore, using the juridical question as a point of departure, Leoni sees the independence of law from legislation as a consequence of the renunciation of a ‘privileged point of view on the world’. This line of reasoning is exactly the opposite to Acton’s. Acton’s analysis starts from political considerations and arrives at the legal aspects; Leoni’s point of departure is the legal question, which then brings to light the political implications. Nevertheless, both of them show that economic development, political development and increase in rationality become institutionalized only in a normative habitat that places individuals on the same formal juridical level and allows them to use all the knowledge they have to pursue their goals. We shall have occasion further on to examine more directly the concept of law in force in Athens and in Rome. Here it is worthwhile to stress how specific references to Solon can corroborate the main theoretical points dealt with in the previous pages.

Solon and the ‘struggle for law’ To understand what Solon accomplished in politics, it is helpful to use Rudolf von Jhering’s idea of the ‘struggle for law’. Jhering says:

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The entire life of the law, embraced in a glance, presents us with the same spectacle of restless striving and working of a whole nation, afforded by its activity in the domain of economic and intellectual production. Every individual, placed in a position in which he is compelled to defend his legal right, takes part in this work of the nation, and contributes his mite toward the realization of the idea of law on earth.63 Solon occupies a very important place in the history of the ‘struggle for law’. The profound economic changes that had occured and were still occuring were forcing a reform of the normative habitat. Werner Jaeger writes: the long succession of Ionian epigrams and poems which extol Justice as the basis of human society runs from the later portions of the Homeric epics through Archilochus and Anaximander down to Heraclitus. As we might imagine, such praise of justice by poets and philosophers did not precede the struggle to realize the ideal, but was plainly a natural repercussion of the political struggles which lasted from the eighth century to the beginning of the fifth. The poets of Greece proper, from Hesiod downwards, spoke of Justice in the same tone, and none more clearly than Solon of Athens.64 What was the reform of the normative habitat supposed to be? Once again, let us follow Jaeger: ‘Homer shows us the earlier situation. He usually describes justice by another word—themis […]. Themis is the epitome of the judicial supremacy of the early kings and nobles’.65 But now the ‘password’ is dike. Dike means the due share which each man can rightly claim; and then, the principle which guarantees that claim, the principle on which one can rely when one is injured by hubris—which originally signifies illegal action. The meaning of themis is confined rather to the authority of justice, to its established position and validity, while dike means the legal enforceability of justice. It is obvious how, during the struggle of a class which had always been compelled to receive justice as themis—that is, as an inevitable authority imposed on it from above—the word dike became the battle-cry. Throughout these centuries, we hear the


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call for dike, growing constantly more widespread, more passionate, and more imperative.66 Dike coincides with the need for equal rights before the judge or before the law.67 This need is implicit in Hesiod’s use of dike. As it is known, already in The Theogony, he stresses the necessity of a justice based on ‘true judgements’.68 However, in Works and Days, which attacks ‘our bribe-swallowing lords, who love to judge such a cause as this’,69 he points out that riches acquired by deception and fraud can only last ‘for a little time’.70 He says that, in a city without justice, those who obey the law are penalized: ‘may neither I myself be righteous among men, nor my son—for there it is a bad thing to be righteous— if indeed the unrighteous shall have the greater right’.71 He extols work: ‘work is not a disgrace: it is idleness which is a disgrace. But, if you work, the idle will soon envy you’; 72 and calls for social cooperation.73 At this point, one wants to ask what Solon’s position is in relationship to Hesiod. But this is not the crucial question. One must remember that Hesiod’s ideas were not all his own. Let us follow once again Jaeger: It is impossible to admit that Hesiod, in his Beozia, which was certainly backward compared to the intellectual development of the Ionian cities, was the first to encounter such a need and he could conceive of social pathos completely on his own. He only felt it with particular intensity, in the struggle with that environment, and became its standard-bear.74 This means that the roots of the struggle for law are Ionic as are those in Solon’s struggle. Jaeger explains: Throughout Solon’s life and work it is clear that he was deeply influenced by Ionian civilization. Accordingly, we cannot doubt that these new political ideals also originated in Ionia, the intellectual and critical centre of Greece […]. Solon’s thought is clearly inspired by Ionia. The early origin of the demand for equal right before the judge or before the law would justify the assumption that the ideal of isonomia […] is older than our scanty evidence would prove.75

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In fact, Solon himself described his political activity as an application of the ideal of equality before the law. It is not by chance that, after summarizing his provisions, he added: These things I did by the exercise of my power, blending together force and justice, and I persevered to the end as I promised. I wrote laws for the lower and upper classes alike, providing a straight legal process for each person […] I set up a defense on every side and turned about like a wolf among a pack of dogs.76 In other words, Solon changed what needed to be changed, ‘but not by an arbitrary, personal act of the governor, but by the normative strength of a new system, valid for today, tomorrow, and everybody’.77 Therefore, the problems of the collectivity cannot be solved merely by an arbitrary act. Anyone who thinks they can is blinded by intellectual hubris. Solon’s true profundity was his constant awareness of human limits, which led him to affirm that ‘wisdom’s hidden essence, which alone holds the key to everything, is the most difficult to discern’.78 Hence, his hostility to tyranny. Absolute power was offered to him, but he refused. He considered tyranny as a ‘very fair spot, but it had no way down from it’.79 He rejected the idea of the omniscient legislator so strongly that, ‘where it was well before, he applied no remedy, nor altered anything, for fear lest—“Overthrowing altogether and disordering the state”—he should be too weak to propose a new model and recompose it to a tolerable condition’.80 And he was quick to recognize that, ‘in all actions, there is risk and no one knows, when something starts, how it is going to turn out’.81 Later, when he was asked whether he had formulated the best laws for the Athenians, he replied: ‘the best they could receive’.82 Moreover, having recognized the limits of human knowledge, Solon understood that justice is not a concept than can be defined prescriptively in positive terms. He understood that the only justice possible is the lack of injustice: ‘being asked what city was best modelled. “That”, said he, “where those that are not injured try and punish the unjust as much as those that are”’.83 It was also clear to him that, when juridical principles are continually violated by legislation, the safeguards offered by the law disappear:


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when these laws were enacted, and some came to Solon every day to commend or dispraise them, and to advise, if possible, to leave out or to put in something of such and such passage, he, knowing that to do so it was useless, and not to do it would get him ill-will, and desirous to bring himself out of all straits, and to escape all displeasure and exceptions, it being a hard thing, as himself says—‘In great affairs to satisfy all sides’, as an excuse for travelling, bought a trading vessel, and, having leave for ten years’ absence, departed, hoping that by that time his laws would have become familiar.84 Obviously, Solon fully understood the importance of certainty of the law. And, consequently, he was aware that the continual impossible search for the ‘best’ legal system, one that could ‘satisfy all sides’, negates the legal characteristics essential to a society that wants to avoid constant rivalry among groups to gain privileges and favors. As we already know, ‘where it was well before, he applied no remedy, nor altered anything’ and he promulgated only ‘the best laws’ the Athenians ‘could receive’. We can now go more directly to the significance of Solon’s work. The underlying idea is that ‘neither the noble as such, nor the tyrant, both of them unaware of the complex reality at the basis of the city and the well-being of its citizens, is capable of governing […]. In order to govern, one must appreciate the value of a well developed system of rules, specifically laws, and an honest system of justice’. Absolute knowledge is only divine. No individual or social group is bearer of a ‘privileged point of view on the world’. The citizens themselves […] are willing to destroy a great city, and the mind of the people’s leaders is unjust; they are certain to suffer much pain as a result of their great arrogance. For they do not know how to restrain excess or to conduct in an orderly and peaceful manner the festivities of the banquet that are at hand […] they grow wealthy, yielding to unjust deeds […] sparing neither sacred nor private property, they steal with rapaciousness, one from one source, one from another, and have no regard for the august foundations of Justice [Dike], who bears silent witness to the present and the past and who in time assuredly comes to exact retribution.87

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This is the culmination of Solon’s analysis: Lawlessness [disnomia] brings the city countless ills, but Lawfulness [eunomia] reveals all that is orderly and fitting, and often places fetters round the unjust. She makes the rough smooth, puts a stop to excess, weakens insolence [hubris], dries up the blooming flowers of ruins, straightens out crooked judgements, tames deeds of pride, and puts an end to acts of sedition and to the anger of grievous strife.88 What is ‘eunomia’? Eunomia is ‘a combination of conditions and activities desired and fulfilled by the citizens, only if they are capable […] of understanding the need for them and the possibility to attain them’.89 In other words, Solon saw a solution in a normative habitat that would be conducive to social cooperation, and social cooperation was the main objective of his political action. It is not by chance that he affirmed: If you have suffered grief because of your wrong action, do not lay the blame for this on the Gods. You yourselves increased the power of these men by providing a bodyguard and that is why you have foul slavery. Each one of you follows the fox’s tracks, and collectively you are empty-headed. You look to the tongue and words of a crafty man, but not to what he does.90 And in conclusion: From a cloud comes the force to snow and hail, thunder from a flash of lightning, from powerful men a city’s destruction, and through ignorance the masses fall enslaved to a tyrant. If they raise a man too high, it is not easy to restrain him afterwards.91 Therefore, when power is exclusively given to a person or a particular group, it is not surprising that development of social cooperation is thwarted and the power tends to become unlimited and uncontrollable. The alternative is to discover the conditions that prevent hubris, which, as has been mentioned before, originally ‘signifies illegal action’92 and make free social cooperation possible. Such conditions must be the habitat of individual action: the abolition of slavery for debt, protection of private property, encouragement to learn a trade, and liberty to make a will are a few measures Solon took to achieve


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equality before the law and define the conditions conducive to social development. Solon himself described his work in these terms: I brought back to Athens, to their homeland founded by Gods, many who had been sold […] and those who had fled under necessity’s constraint, no longer speaking the attic tongue, as wanderers far and wide are inclined to do. And those who suffered shameful slavery right here, trembling before the whims of their masters, I set free.93 Hence, Solon opened the city or, as Felix Jacoby rightly claims, transformed the ‘clan State’ into the ‘citizen State’,94 by renouncing a ‘privileged point of view on the world’ and trying to identify the normative habitat for free social cooperation. Athens and Sparta: liberty and tribalism All this can be expressed in the words of Victor Ehrenberg: A man of the middle line and therefore never a complete success, he [Solon] yet ranked among the Seven Sages. He reduced the power of the noble clans and gave even the poorest citizens a share in the state; he laid the foundations of what was to become Athenian democracy. He abolished slavery for debt, and made life at least tolerable for the small peasants and the growing numbers of artisans and traders; thus he opened the way to the economic and cultural greatness of Athens. He produced a new code of law, and made it possible for a society that was in the process of being reshaped to be subjected to the rule of a state based on justice.95 Consequently, Constant is right when he identifies Athens as the first experiment in liberty in the modern sense. He maintains that ‘individual independence is the first need of moderns’ and that we can consider ourselves ‘modern men’, when ‘we wish each to enjoy our own rights, each to develop our own faculties as we like best, without harming anyone’.96 This coincides with a normative habitat that makes freedom of choice—‘one of the most precious’ rights97—possible for each individual. For the ancients, there was no freedom of choice. Personal freedom

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consisted in exercising collectively […] several parts of the complete sovereignty [and of admitting] as compatible with this collective freedom the complete subjection of the individual to the authority of the community […]. All private actions were submitted to a severe surveillance. No importance was given to individual independence, neither in relations to opinions, nor to labour, nor—above all—to religion. The right to choose one’s own religious affiliation, a right which we regard as one of the most precious, would have seemed to the ancients a crime and a sacrilege’.98 Constant adds: In the domains which seem to us the most useful, the authority of the social body interposed itself and obstructed the will of the individual. Among the Spartans, Therpandrus could not add a string to his lyre without causing offence to the ephors. In the most domestic of relations the public authority again intervened. The young Lacedaemonian could not visit his new bride freely […]. The laws regulated customs, and as customs touch on everything, there was hardly anything that the laws did not regulate’.99 Thus, the individual is ‘a slave in all his private relations’: ‘as a citizen he decided on peace and war; as a private individual, he was constrained, watched and repressed in all his movements’,100 and also in his emotions. Fustel de Coulanges writes: Sparta had just suffered a defeat at Leuctra, and many of its citizens had perished. On the receipt of this news, the relatives of the dead had to show themselves in public with gay countenances. The mother, who learned that her son had escaped, and that she should see him again, appeared afflicted and wept. Another, who knew that she should never again see her son, appeared Joyous, and went round to the temple to thank the gods. What, then, was the power of the state that could thus order the reversal of the natural sentiments, and be obeyed?101 Citing Constant once again, we can say that ‘the aim of the ancients was the sharing of social power among the citizens of the same fatherland: this was what they called liberty’.102 And yet permanent,


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obligatory participation is the way to alter the individual,103 to keep him constantly outside himself in order to prevent the development of critical thought and to block any challenge to the status quo. Before declaring any dissent or ‘falsification’ inadmissible, this situation tends to wither individualism, which is the source of criticism and innovation. Under these circumstances, the ‘army is simply the mobilized society and the society is the quiescent army’.104 And, if there is any dissent, the person responsible is immediately considered a foreign enemy, a conspirator driven by his individualism to plot against the ‘social whole’.105 This kind of life is like a ‘permanent military camp’.106 And so it was when compared to life in Athens. As is known, Lycurgus was responsible for the rules in Sparta, which we shall discuss in more detail in the next chapter. However, at this point, it is necessary to recall that Lycurgus was supposed to have journeyed to Crete and to what was then called Asia and Egypt. He ‘first arrived at Crete, where, having considered their several forms of government and got acquaintance with the principal men among them, some of their laws he very much approved of, and resolved to make use of them in his own country’.107 Later he went to ‘Asia’. Plutarch says: ‘From Crete he sailed to Asia, with design, as is said, to examine the difference betwixt the manners and the rules of life of the Cretans, which were very sober and temperate, and those of lonians, a people of sumptuous and delicate habits, and so to form a judgment; just as physicians do by comparing healthy and diseased bodies’.108 ‘The Egyptians say that he took a voyage into Egypt, and that, being much taken with their way of separating the soldiery from the rest of the nation, he transferred it from them to Sparta’.109 And yet Lycurgus would not have been able to pursue his goals, if he had not presented his legislative initiatives as the will of the gods and ‘justified’ them by recourse to a ‘privileged point of view on the world’,110 and if he had not associated the harsh social discrimination with respect for the conditions that foster it: the abolition of private ownership of land and the division of it into lots to be distributed according to state regulations.111 To clarify the situation further, it is worthwhile to refer to the writings of Rostovtzev: The peculiarity of Sparta was […] the creation of an absolutely unique organization, intended to increase the military strength of the country. All social and economic relations were based on

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absolute subordination of the individual to the state, and on the conversion of all the dominating class into a standing army, ready at any moment to take the field. Every adult Spartiate was, first of all, a soldier. Though he had a house and family of his own, he did not live there; and his days were not spent in providing for them or in productive labor, but entirely devoted to constant military training.112 Moreover: Morally and socially the position of the Helots was deplorable. They were in absolute slavery to the Spartiates. They were kept under constant supervision; and from time to time the most vigorous among them were murdered. The most wary and intelligent of the young Spartiates were constantly moving about their midst as secret agents of the government, turning up where they were least expected and dispatching undesiderable Helots without trial.113 Rostovtzev adds: The Spartiates […] disapproved of foreign trade, and tried to make home products satisfy their needs. They feared that foreign goods bring with them new demands and new ideas. For the same reason they retained iron coinage as the only recognized medium of exchange, though of course it was not current outside Sparta. The Spartiates kept a watchful eye on foreign visitors and resorted freely to the deportation of undesirable persons from other countries. This spirit tended to isolate Sparta from the rest of the world: she became self-centered—almost exclusively an inland power with strong army but without ships for war or commerce.114 In this situation, ‘changes have the character of religious conversions or revulsions, or the introduction of new magical taboos. They are not based upon a rational attempt to improve social conditions’;115 they are, instead, due to the permanent ‘alteration’ of the individual,116 who no longer has any private ‘refuge in which he might escape from’ to power. 117 Every moment of life is taken up by politics, which incessantly stirs up individuals and becomes omnivorous in keeping them from withdrawing and then ‘reemerging’ with independent


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opinions. In other words, individuals are prevented from withdrawing into their own ‘microcosms’ and from introducing their personal proposals into the social process. Therefore, there is an abyss between Lycurgus and Solon: it separates the Eunomia of Tyrtaeus from the Eunomia of Solon. In the former, which ‘belongs to Sparta’,118 the ‘popular assembly is the muster of the army: it votes yes or no to every proposal advanced by the council, but has no right of proposing measures on its own account’.119 And Sparta becomes the ‘symbol of oligarchic rule and cultural barrenness. Sparta is […] the […] example in history of the fact that authoritarian states may be able to do heroic deeds, but unable to create a lasting culture of their own’.120 The Eunomia of Solon, on the other hand, contains isonomy, an idea of social order based on equality before the law.121 This is the habitat of liberty in the modern sense, which in Athens produced the ‘startling progress, the economic prosperity, the artistic grandeur’.122 Consequently, institutionalizing the conditions that foster economic and political development and the growth of knowledge means protecting the individual and his innovative choices. This is the price, says Popper, we have to pay for ‘being human’.123 We can be authentic human beings if, aware of everyone’s ‘inadequacy’, we renounce the ‘privileged point of view on the world’ and place our trust in that magnificent productive machine which is the social process, open to cooperation from everyone. It is an unending process that receives continual input from individuals. This input is sorted out and added to a level of knowledge that is unattainable by any single human mind.

Contractual freedom in Athens and Rome We have seen, especially in the writings of Bruno Leoni, that liberty, before being an economic concept, it is a juridical one, which presupposes the relinquishment of the ‘privileged point of view on the world’ in a habitat of equality. Let us now examine the question more closely. We must see more clearly what all this means in terms of human action. To do this, it is very useful to dwell on legal equality and the choices available to the actor in an ‘open society’. Certainly, the prerequisite of choice is opulence. And this does not come only from economic development, which of course exists and is a result of liberty. Equality before the law produces greater and more

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direct ‘wealth’: that generated illico et immediate (here and now) because of the abolition of the ‘privileged point of view on the world’ and the prescriptive rules it imposes on every moment in the life of the individual and the group. There is more. If we free ourselves from prescriptive rules we are immediately free to choose; and we must choose. This happens on a personal level. And yet there are also direct consequences on a social level. If there are no longer prescriptive rules and the actors are free to make choices in their lives, who guarantees that the actions are compatible? How is it possible to have social order? The answer to these questions is in the transformation of the rules, which are no longer prescriptive but merely simple instruments to determine the boundaries of actions. Here Palmer’s theory seems very perceptive. He maintains that the term dike postulates the idea of ‘boundaries’ and indicates the portion of the world due to every thing or person.124 This means that, as in Dante’s definition, law becomes ‘homines ad hominem proportio’. The obvious result of the abolition of prescriptive rules is contractual freedom. Indeed, it can be said that the choice, as it is free, coincides ipso facto with contractual freedom. 125 Thus, social cooperation can be seen as a means of attaining ends that have been decided upon individually. This is why Solon did not hesitate to compare general rules of conduct to money.126 And this explains why in Athens a normative discipline was elaborated in the ‘commercial courts […], where the thesmothetes (the magistrates in charge exclusively of commercial affairs) granted legal protection not only to Athenian citizens, but also to metics and to [foreigners] and also where, in consideration of their particular needs, the parties obtained a sentence in the very short time of a month’.127 Therefore, Rudolf von Jhering mentions, with good reason, that Greek law was the source of a group of late-Roman-law institutions, and this origin is revealed in the Greek names which were retained by the Romans (hypotheka, hyperocha, antichresis, emphyteusis, arrha, parapherna, antipherna, proxeneticum, syndicus, etc.).128 Jhering also says: The new era of Roman jurisprudence, which began at the end of the Republic with Quintus Mucius Scaevola, should be attributed to Greek science […]. This was the academic era of Roman jurisprudence. The impulse for it came from Greek rhetoricians and grammarians, who gave courses in Rome.


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Roman jurists took two new ideas from them: the establishment of public schools, which were unknown until then; and the scientific method […], which was a way of thinking. All the advances produced by this new method can be traced back to the fertile influence of the Greek spirit on the Roman spirit […]. Late Roman law would never have become what it became without the contact with Greek science and with the very free views of the Greeks.129 It is easy to follow Jhering’s reasoning. Athens was well aware of its great historical experience and of the challenge it launched against tribalism. Because of its conquests, Rome was instead involved in an unavoidable process it had to accept.130 Cicero did affirm that ‘legum denique idcirco omnes servi sumus, ut liberi esse possimus’131 And, even though this is not his only attitude (as we shall see in the concluding section of the next chapter), it follows that liberty is bestowed by a normative network that marks the boundaries of our actions, indicates what we cannot do and leaves us free choice of how to act. Opening to the world necessarily eliminates the ‘privileged point of view on the world’ and prescription. And, as a result, law can no longer coincide with custom; in other words, there is the birth of law in the strict sense of the word, as norma agendi or abstract procedure valid erga omnes. In Roman law, the Twelve Tables do not replace the mores majorum, whose interpretation is the monopoly of a special collegium; but the institution of the praetor peregrinus and the birth of jus gentium mark the passage to a new phase and are an attempt to respond to general needs of people of different cultures and customs, who yet live together. Consequently, they require general, abstract rules with no content, which only indicate procedures. As Sir Henry Maine has pointed out, it is not by chance that mutual consent contract was originally a juris gentium contract and fulfilled the need to simplify economic exchanges, putting the contracting parties on an equal footing.132 This is the death of status, intended as a set of privileges, and it explains why Maine himself summed up the passage from a closed society to an open one with the expression ‘from status to contract’.133 What remains to be said is that contractual freedom, which is the first step toward full enjoyment of political rights, mobilizes specialized knowledge and skills as well as resources.

3 The gnoseological roots of liberty and tribalism

Athens: ignorance and liberty As we have seen, Solon’s basic thought is that human beings are precluded from ‘wisdom’s hidden essence’. This means that the scarcity typical of our existence is primarily scarcity of knowledge, so much so that, ‘in all actions, there is risk and no one knows, when something starts, how it is going to turn out’.1 ‘Fate brings good and ill to mortals and the gifts of the immortal gods are inescapable’.2 What is to be done then? ‘Neither the noble as such, nor the tyrant, both of them unaware of the complex reality at the basis of the city and the well-being of its citizens, is capable of governing […]. In order to govern, one must appreciate the value of a well developed system of rules, specifically laws, and an honest system of justice’.3 In other words, it is necessary to identify the normative conditions that make the development of social cooperation possible (which helps us compensate for our individual insufficiencies) and at the same time make it impossible for whoever ‘follows the fox’s tracks’ to achieve unlimited power and enslave us. We can and must do this. ‘If you have suffered grief because of your wrong action, do not lay the blame for this on the Gods’.4 It is true that we cannot escape from the divine fate, but we can avoid a series of negative consequences due to our own actions. If the problem is caused by our lack of knowledge, the solution cannot be found by relying on the intellectualist hubris of an individual or a particular group. Awareness of ‘not knowing’ leads to an ‘opening toward the world’ and communication with others on an equal basis, broadens everyone’s horizons, and undermines the feeling that our meager knowledge is absolute. Therefore, it is necessary to eradicate the ‘privileged point of view 32

The gnoseological roots of liberty and tribalism

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on the world’ and establish a ‘kind of intellectual equality’,5 based on recognizing our common ignorance. In terms of rules, this means equality before the law. As we have already pointed out, it is not by chance that Pericles stated: ‘In our opinion action does not suffer from discussion but, rather, from the want of that instruction which is gained by discussion preparatory to the action’,6 and added that there is no ‘bar in poverty and obscurity of rank to man who can do the state some service’.7 Protagoras—‘a theorist of the open society’8 and friend of Pericles, who commissioned him to draw up a constitution for the colony of Thurii—dwelt on the origins of civilization or, to put it better, the origins of human society. He resorted to the myth of Prometheus, which also inspired Hesiod and Aeschylus. According to that myth, after they had created the mortals, the gods delegated to Prometheus and Epimetheus the ‘task of equipping them and allotting suitable powers to each kind’.9 Epimetheus asked Prometheus to let him have the job of distribution, and he did the job assigning to ‘some creatures strength without speed […] being careful […] that no species should be destroyed’.10 Epimetheus also ‘equipped‘ the animals. And yet, since he ‘was not a particularly clever person’, he did not realize that he had left the human race ‘unprovided for’.11 When Prometheus ‘came to inspect the work, and found the other animals well off for everything, but man naked, unshod, unbedded and unarmed’, he stole technology from the gods and gave it to man.12 But this was not enough. Human beings tried to ‘save themselves by coming together and founding fortified cities but, when they gathered in communities they injured one another for want of political skill, and so scattered again and continued to be devoured. Therefore, fearing the total destruction of our race, Zeus sent Hermes to impart to men the qualities of respect for others and a sense of justice, so as to bring order into our cities’.13 According to Protagoras, men are condemned to cooperate, because individually they are insufficient. But it is impossible to have cooperation without justice. That is not all. In fact, for Protagoras, ‘man is the measure of all things’14 and this, interpreted correctly, allows for a multitude of evaluations, since everyone has different knowledge and different needs. (Moreover, as his knowledge is limited, man cannot say what form the divinity takes or whether or not it actually exists.)15 In the dialogue that Plato dedicated to him, Protagoras enters the scene as protagonist and ends as a mere ‘listener’ to Socrates. 16

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Socrates reevaluates, or to be exact, Plato has Socrates teach Protagoras a lesson. Clearly, we have here the old question of knowing to what extent Plato’s Socrates corresponds to the historical Socrates. We shall deal first with the confutatory part of his work.17 Apropos of this part, Popper asserts that Socrates made ‘the greatest contribution’ to faith in the open society and he died for his faith.18 In particular, Popper points out: Socrates was not a leader of Athenian democracy, like Pericles, or a theorist of the open society, like Protagoras. He was, rather, a critic of Athens and of her democratic institutions, and in this he may have borne a superficial resemblance to some of the leaders of the reaction against the open society. But there is no need for a man who criticizes democracy and democratic institutions to be their enemy, although the democrats he criticizes, and the totalitarians who hope to profit from any disunion in the democratic camp, are likely to brand him as such. There is a fundamental difference between a democratic and a totalitarian criticism of democracy. Socrates’ criticism was a democratic one, and indeed of the kind that is the very life of democracy.19 Is what Popper says legitimate? Yes, because Socratic ‘not knowing’ is the basis of his ‘egalitarian theory of human reason’.20 The consequence is that, owing to our ignorance, ‘to let no day pass without discussing goodness and all the other subjects about which you hear me talking and examining both myself and others is really the very best thing that a man can do’;21 and ‘life without this sort of examination is not worth living’.22 In the dialogue with ‘politicians’, ‘poets’, and ‘artisans’, Socrates reprimands them for their ‘pretence of knowledge’.23 This is an idea that, when referring to poets, he states in the following terms: I soon made up my mind about the poets too. I decided that it was not wisdom that enabled them to write their poetry, but a kind of instinct or inspiration, such as you find in seers and prophets, who deliver all their sublime messages without knowing in the least what they mean. It seemed clear to me that the poets were in much the same case, and I also observed that the very fact that they were poets made them think that they


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had a perfect understanding of all other subjects, of which they were totally ignorant. So left that line of inquiry too with the same sense of advantage that I had felt in the case of the politicians.24 Socrates complains that members of the various social categories think they are the smartest, even in matters where they know nothing. Nevertheless, ‘the wisest of you men is he who has realized […] that in respect of wisdom he is really worthless’.25 And, as a result of this, we must systematically challenge all believed knowledge. As we know, Socrates was accused of wanting to make ‘the weaker argument defeat the stronger, and teaches others to follow his example’.26 And yet, citing Popper, we can say that the Socratic rationalist ‘is simply someone for whom it is more important to learn than to be proved right; someone who is willing to learn from others— not by simply taking over another’s opinions, but gladly allowing others to criticize his ideas and by gladly criticizing the ideas of others’.27 Thus, it becomes imperative to resist any attempt to impose a ‘privileged point of view on the world’, because no class or social group can claim to be a privileged source of knowledge. In other words, ‘not knowing’, which is a common feature of all of us, prevents anyone from claiming power on the basis of a presumed superior knowledge. However, the question is: what norms prevent affirmation of the ‘privileged point of view of the world’? In the previous chapter, we have stressed the legal aspects of liberty. Let us now follow Socrates. He maintained that ‘the jury does not sit to dispense as a favor, but to decide where justice lies, and the oath which they have sworn is not to show favor at their own discretion, but to return a just and lawful verdict’;28 and asserted that ‘goodness and integrity, institutions and laws, are the most precious possessions of mankind’.29 This explains why Socrates rejected the chance to avoid death and preferred to die rather than violate the law.30 At this point, one must ask what laws and justice can be derived from Socratic ‘not knowing’. The logical answer is that laws should not dictate an obligatory existential content: they should simply define the boundaries among various actions and function as limits not to be overstepped. Consequently, justice is a concept that must be formulated in negative rather than positive terms. Everything that is not prohibited is just. In fact, Socrates says: ‘Please do not be offended if I tell you the truth. No man on earth, who conscientiously

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opposes either you or any other organized democracy, and flatly prevents a great many wrongs and illegalities from taking place in the state to which he belongs, can possibly escape with his life’.31 Socrates does not try to determine what is just in positive terms, he proposes instead to investigate what is not just. For him, this is the only possible goal, it is the obligatory landing-place for anyone who starts out with the idea of ‘not knowing’ and denies the possibility of the ‘privileged point of view on the world’. Socrates is a critic of what exists, whatever that happens to be. Therefore, the method he adopted was that of democracy. If so, can we attribute entirely to Socrates the ‘exhortative’ part of his work, the part that Plato culminates in the ‘science of Good’ and the union of knowledge, ethics and politics?32 If this part were true, there would be an obvious paradox. One would start from ‘not knowing’ and make it the impossible basis for omniscience or, in any case, for the establishment of the ‘privileged point of view on the world’. Moreover, if Socrates had been an enemy rather than a critic of democracy, his death would not have been such a great tragedy. The intolerant Socrates would have been nothing more than a victim of intolerance. Instead, there is a fatal misunderstanding in his sentence. As Xenophon says: ‘Socrates spent his life in lavishing his gift and rendering the greatest services to all who cared to receive them. For he always made his associates better men before he parted with them’.33 And, after further illustrating Socrates‘ merits, Xenophon asks: ‘By this conduct, did he not deserve high honour from the state?’.34 Nevertheless, despite his service to the collectivity, or more precisely, because of it, Socrates was condemned to death. Herein lies the tragedy. In order to throw more light on this, let us see how Max Scheler explains the ‘phenomenon of the tragic’. He writes: The fact that it was his very courage and boldness that led him to that ‘glorious action’ of exposing himself to the mortal danger which would annihilate him. It was a danger that a person with even a mediocre intelligence could have easily avoided […]. The fact that an attitude, full of ideals and values and dedicated to spiritual good, can become, under certain circumstances, the very cause of the disaster—and necessarily— of a man amid the miseries of life […]. All this is ‘tragic’ in the highest sense.35


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Therefore, Socrates is a tragic figure, since he is ‘annihilated’ because of his own ‘glorious action’. If there had been a betrayal or an act of cowardice, he would not have become the symbol of moral tragedy.

Plato: re-establishment of the ‘privileged point of view on the world’ Democracy intensifies and multiplies social interaction. It produces an increase in life […]. One lives in a very large world […]. Man discovers that life does not consist only of what he possesses […], that it is not defined exclusively by necessity, but that, in addition to this and overcoming it, offers very many possibilities[…]. Ipso facto, the individual discovers that living is a completely different problem from what it was in the archaic times, when it was limited to what one possessed […]. But now the problem is almost the opposite: one must choose from many possibilities. Life is symbolized by the cornucopia. One must choose!.36 Yet, the possibility of choice may be seen as liberty or as radical disorder, chaos. Pericles was the champion of the possibility of choice. His oration is not only a defense of democracy, but is probably also an attack on those who in Athens were planning to re-establish a blocked society and revive tribalism as the only possible alternative to the ‘chaos’ of democracy.37 These people were afraid of the choice offered by liberty. Eduard Meyer says: ‘political theories sprout like mushrooms. Even though they bring exceptional new proposals, everyone agrees that they seek their ideal in the past, in the antique aristocratic constitution, in the governments of Crete and Sparta, even in monarchy; and they decidedly and disdainfully move away from Athenian democracy’.38 Meyer adds: ‘This reactionary theory has […] crudely formulated and adopted the concept […] that the citizen with full rights must be materially independent, that manual labor is to be discredited, and that money transactions and mortgages with interest are uncivil and should be forbidden’.39 In other words, ‘reactionary theory’ was directed towards suppressing the ‘open society’. To do this, one must first re-establish the ‘privileged point of view on the world’, because it eradicates personal freedom of choice and casts everyone’s life in the rigid mold of indisputable prescriptions.

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Plato’s Socrates goes in this direction. He faces the crucial question of choice and asks himself: if our welfare lay in the choice […], in knowing when the greater number must rightly be chosen and when the less, whether each sort in relation to itself or one in relation to the other, and whether they are near or distant? What would assure us a good life then? Surely knowledge, and specifically a science of measurement, since the required skill lies in the estimation of excess and defect.40 And immediately afterwards, Socrates (or rather Plato) declares: ‘you have agreed that when people make a wrong choice of pleasures and pains—that is, of good and evil—the cause of their mistake is lack in knowledge’.41 Therefore, a science of good and evil is possible and must be taught. Obviously, the idea of phronesis, which can distinguish good from evil, is rejected by Protagoras. 42 But Plato, who is the prompter, immediately assigns the teaching of this science to the state; and he sees in Socrates, who is his champion for this task, the ‘bravest’ man ‘of all those whom we knew in our time […] and also the wisest and most upright man’.43 Nevertheless, what has to be done to accomplish phronesis and reestablish the ‘privileged point of view on the world’? An ‘open society’, which is based on the recognition of everyone’s ignorance, solves its problems by comparison and critical discussion, which is a public process. Plato’s theory of knowledge adopts an arbitrary psychologism, so that rationality does not increase by trying in all possible ways to disprove our cognitive hypotheses, but by looking exclusively within our soul and searching. This sort of theory is based on a series of beliefs. First of all, one must admit the existence of the soul. But it is not enough to say Socratically that everyone has a soul in the sense that everyone is individually capable of judgment, 44 which is developed through personal autonomy made possible by the open society. If this were all, the Platonic problem of choice would remain unsolved, since we could not achieve the ‘privileged point of view on the world’. Something different is needed. An uncontrollable metaphysical theory is required. Therefore, ‘the soul of man is immortal. At one time it comes to an end—which is called death—and at another is born again, but is never finally exterminated’.45 Moreover, it is not only our soul that exists


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before our birth. ‘All these absolute realities, such as beauty and goodness, which we are always talking about, really exist’.46 And it happens that ‘we must have had some previous knowledge of equality before the time when we first saw equal things and realized that they were striving after equality, but fell short of it’.47 This means that, before our material life, ‘these realities exist’ and our soul exists: ‘it is logically just as certain that our souls exist before our birth as it is that these realities exist’.48 Plato will claim: ‘we speak of a self-beautiful and of a good that is only and merely good, and so, in the case of all the things that we then posited as many, we turn about and posit each a single idea or aspect, assuming it to be a unity and call it that which each really is’.49 Thus, it is clear that, if belief in the pre-existence of the soul falls and, with it, belief in the pre-existence of ideas or essences, what remains is psychologism. This is indefensible on a rational level, but makes Plato’s first objective possible. It lets Plato remove knowledge from the social process (which is the unfortunate site of ‘opinions’). Nevertheless, this is not enough. In fact, if we all know everything, because our soul existed before, we cannot yet disapprove of those who think differently from us. Something must be done to avoid concluding that, as the ‘essences’ and souls exist before our birth, knowledge is everybody’s. Plato had already set the basis for freeing himself from the egalitarian theory of reason in Phaedo, where he says: ‘there are two alternatives. Either we are all born with knowledge of these standards, and retain it throughout our lives, or else, when we speak of people learning, they are simply recollecting what they knew before. In other words, learning is recollections’.50 But this is not yet sufficient. Science (episteme) is related ‘to that which is, to know the condition of that which is’.51 And those who know ‘the reality [of the beautiful] itself’ are ‘philosophers’ and not ‘doxophilists’. 52 Consequently, the philosophers, who are the only ones that know ‘the true being’, have the monopoly of knowledge. To reach this conclusion, Plato uses the well-known ‘myth of the cavern’: Picture men dwelling in a sort of subterranean cavern with a long entrance open to the light on its entire width. Conceive them as having their legs and necks fettered from childhood, so that they remain in the same spot, able to look forward only, and prevented by the fetters from turning their heads. Picture further the light

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from a fire burning higher up and at a distance behind them, and between the fire and the prisoners and above them a road along which a low wall has been built, as the exibitors of puppet shows have partitions before the men themselves, above which they show the puppets.53 Therefore, if men ‘are compelled to hold their heads unmoved through life’,54 they ‘would not have seen anything of themselves or of one another except the shadows cast from the fire on the wall of the cave that faced them’.55 What can be done? ‘The excellence of thought […] never loses its potency’. 56 Thus, it is not cognitive ability that obstructs our knowledge, but the place we occupy in the cave: An eye that could not be converted to the light from the darkness except by turning the whole body. Even so this organ of knowledge must be turned around from the world of becoming together with the entire soul, like the scene-shifting periactus in the theater, until the soul is able to endure the contemplation of essence and the brightest region of being. And this, we say, is the good.57 Hence, there must be a real conversion, which means ‘the wheeling round of the “whole soul” towards the light of the Idea of God, the divine origin of the universe’. 58 And this is possible only if the philosopher assumes the role of great educator. However, for this to happen, there must be a polity ‘worthy of the philosophical nature’.59 ‘If ever it finds the best polity as it itself is the best, then will it be apparent that this was in truth divine and all the other human in their natures and practices’.60 This means that philosophical knowledge is a gift from God and it is ‘the divinity of each one, being that part which […] dwells at the top of the body, and inasmuch as we are a plant not of an earthly but a heavenly growth, raises us from earth to our kindred who are in heaven’.61 Therefore, the philosopher has a share of divine nature. As we have seen, Protagoras said that ‘man is the measure of all things’. But now Plato can say that God is, ‘for you and me, of a truth the measure of all things’,62 because the measure of the divine on this earth is exclusively in the hands of the philosopher, who is consequently entitled to hold power: ‘Unless […] either philosophers become kings in our states or those whom we now call our kings and


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rulers take the pursuit of philosophy seriously and adequately, and there is a conjunction of these two things, political power and philosophical intelligence’.63 Since the philosopher is the only depositary of the ‘measure’ of God, he is the only legitimate holder of power; and, since he is the one who knows the ‘true Being’, he can impose an obligatory existential content on everybody. The social norms should define not only the boundary between various actions; in addition, they should prescribe, because they are shaped by an overall logic,64 the content of everyone’s life and thus solve the ‘problem of choice’. Ethics and politics come together again; the government of the philosophers, which holds the ‘privileged point of view on the world’, assumes the role of educator of the soul and of the state. In reference to this, Werner Jaeger writes: Just at the point where we might expect to find the appearance of such modern ideals as personal conscience and free individual ethics, they are decisively rejected. Instead, we are referred to the authority of objective philosophical truth, which claims to rule the entire life of society, and therefore of the individual.65 More exactly, philosophy makes itself and politics sacred. And Plato becomes the ‘greatest of all classical theologians’.66 All of this should not be surprising. The ‘open society’ had shattered the old belief in the gods, which could no longer act as the principle for legitimizing a revival of tribalism. Those who were nostalgic for the old, closed world had to find another principle; and the doctrine of being served the purpose. There was a felt need for a stable point of reference; and it was postulated that, hidden behind the open social process, which was perceived as chaos, was a ‘stable figure of reality’.67 The deep-seated need for a motionless universe projected that figure on reality. This gave birth to the belief in a being whose ‘identical consistency enables it to be grasped by the identity of the concepts’.68 This is the belief on which Plato, strongly influenced by Parmenides, added further layers of beliefs and reasserted the ‘privileged point of view on the world’. The socio-economic characteristics of the Platonic city Psychologism, therefore, consists of a double movement. It is a turning inward and also a projection on reality of one’s personal

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solutions, which are presented (according to some belief) as something definitive, unchangeable and superior. The social process, which subjects our theoretical hypotheses to controls and resists our attempts to eliminate reality and make it conform to our projections, is suppressed. Plato removes the social process. The philosopher, ‘associating with the divine order, will himself become orderly and divine’:69 ‘he fixes his gaze upon the things of the eternal and unchanging order, and seeing that they neither wrong nor are wronged by one another, but all abide in harmony as reason bids, he will endeavor to imitate them and, as far as may be, to fashion himself in their likeness and assimilate himself to them’.70 And yet the point is: what must be done to create the perfect city? First of all, the philosophers will ‘take the city and the characters of men, as they might a tablet, and […] wipe it clean’.71 They will not be concerned with anything else ‘before they either received a clean slate or themselves made it clean’.72 the following observations should be made. A man who takes in hand a herd of animals, a shepherd, neatherd, horse breeder, or the like, will never dream of trying to tend that herd without first submitting the group to the purgation proper to it. He will separate the sound animals from the sickly, the thoroughbreds from the mongrels, removing the latter to other herds, and exercising his tendance on the former, since he is well aware that unless he thus purges his stock, he will have endless and fruitless trouble with bodies and minds already degenerate by nature or illmanagement, which will further communicate a taint to the sound and unimpaired in body and disposition in the various herds. With the lower animals this does not so much matter—they only call for mention by way of an illustration—but in the case of man it is of the first concern to the legislator to discover and explain the method of procedure appropriate to various cases, in this matter of purgation as well as in all his other dealings with them’.73 More specifically, in reference to the business of social purification, the case stands thus. There are many ways of effecting a purgation, some of them milder, some sharper. Some—the sharpest and best of all—will be at the


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disposal of one who is at once autocrat and legislator, but a legislator who establishes a new society and new laws with less than autocratic power will be well satisfied if he can so much as reach his end of purgation by the mildest of methods. The best method of all, like the most potent medicine, is painful; it is that which effects correction by the combination of justice with vengeance, in the last instance, to the point of death or exile, usually with the result of clearing society of its most dangerous members, great and incurable offenders’.74 We now see that the principle on which the Republic should be founded is: ‘the best city is that whose state is most like that of an individual man’;75 ‘that is the kind of a state […] that, when any one of the citizens suffers ought of good or evil, will be most likely to speak of the part that suffers as its own and will share the pleasure or the pain as a whole’.76 There must be a situation in which ‘the greater number use the expression “mine” and “not mine” of the same things in the same way’.77 This means that the principle on which the Republic must be founded is collectivistic. The soul of the individual must have no autonomy; it must be part of a single, great collective soul, in which the word ‘my’ loses its meaning of individual and acquires that of ‘our’. ‘My’ suffering, extended to indicate the suffering of everyone belonging to the community, is simply and more exactly, our suffering. This leads to communism of property, women and children. The rulers (or philosopher kings) and the guardians (or warriors) have communal refectories and must not possess wealth: In the first place, none must possess any private property save the indispensable. Secondly, none must have any habitation or treasure house which is not open for all to enter at will […]. Gold and silver, we will tell them, they have of the divine quality from the gods always in their souls, and they have no need of the metal of men nor does holiness suffer them to mingle and contaminate that heavenly possession with the acquisition of mortal gold, since many impious deeds have been done about the coin of the multitude, while that which dwells within them is unsullied. But for these only of all the dwellers in the city it is not lawful to handle gold and silver and to touch them nor to come under the same roof with them nor to hang them as ornaments on their

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limbs nor to drink from silver and gold. So living they would save themselves and save their city.78 The Platonic Republic suppresses private property and the market. The class of farmers, artisans and merchants, which is the only class that can handle money, is a completely subordinate service class with no political rights. The family is also suppressed, and so is freedom to choose a spouse, which has as its basis: the best men must cohabit with the best women in as many cases as possible and the worst with the worst in the fewest, and that offspring of the one must be reared and that of the other not, if the flock is to be so perfect as possible. And the way in which all this is brought to pass must be unknown to any but the rulers, if again the herd of guardians is to be as free as possible from dissension.79 In any case, We shall […] ordain certain festivals and sacrifices, in which we shall bring together the brides and the bridegrooms […] the number of the marriages we will leave to the discretion of the rulers, that they may keep the number of the citizens as nearly as may be the same, taking into account wars and diseases and all such considerations.80 And Certain ingenious lots […] must be devised so that the inferior man at each conjugation may blame chance and not the rulers.81 In addition, all youths who have distinguished themselves in war or other enterprises should be awarded honors and other recompenses, above all ‘the opportunity of more frequent intercourse with the women, which will at the same time be a plausible pretext for having them beget as many of the children as possible’.82 At birth, these children will be ‘taken over by the officials appointed for this, men or women or both, since, I take it, the official posts too are common to women and men’.83 Moreover, ‘the offspring of the good […] they will take to the pen or crèche, to certain nurses, who


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live apart in a quarter of the city, but the offspring of the inferior, and any of those of the other sort who are born defective, they will be disposed of properly in secret, so that no one will know what has become of them’.84 And the mothers no longer recognize their own babies and will nurse children indiscriminately.85 The Republic is a planned society, an intentional structured order (taxis), which cannot be allowed to grow into an extended order (cosmos), because in such a case there would no possibility of planning and controlling it.86 And, if this occurs, there is a re-establishment of the free social process, choice and change; one cannot bequeath ‘a like life’ to his ‘offspring’.87 Therefore, the question is: is the basic idea of Plato’s Republic different from that of Lycurgus’ Sparta? First of all, both Lycurgus and Plato declare themselves proponents of the ‘privileged point of view on the world’. Lycurgus had received his mandate from Pythia, and Plato says that the philosopher (that is, he himself) shares in divine knowledge. What is more, as Xenophon relates, had not Lycurgus ‘forbade freeborn citizens to have anything to do with business affairs [and] insisted on their regarding as their own concern only those activities that make for civic freedom’?88 Does not the class of artisans, farmers and merchants correspond to the Ilots used by Sparta? Was it not Spartans who reproved as ‘frivolous’ the ‘devotion of time and attention to the mechanical arts and to money making’?89 And was it not Lycurgus who told his fellow citizens that they would be safe as long as they remained poor and did not want ‘each man to be greater than his fellow’?90 As for the family, had not Lycurgus prescribed that marriages should be contracted in the ‘prime of their manhood’ and required the ‘elderly husband to introduce into his house some man whose physical and moral qualities he admired, in order to beget children’91? And had he not authorized ‘in the case a man did not want to cohabit with his wife and nevertheless desired children of whom he could be proud, […] to choose a woman who was mother of a fine family and of high birth and if he obtained her husband’s consent, to make her the mother of his children’?92 Furthermore, was it not in Sparta that children were taken from their families and raised together?93 Was it not in that city that children considered ‘puny and ill-shaped’ were ‘taken to what was called Apothetae, a sort of chasm under Taygetus’?94 Did not Lycurgus ban foreigners whose work was considered ‘needless and superfluous’ and expel ‘all strangers […because] they should introduce something contrary to

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good manners’? 95 And did he not forbid foreign travel in order to prevent the acquisition of ‘foreign rules of morality’ and the imitation of different ‘manners of govenment’?96 And did not Sparta give rise to an intentionally structured order (taxis) of reduced dimensions?97 That is not all. As we already know, Lycurgus had imported his constitution from Crete and Egypt.98 Plato, who had visited Crete, duly extolled the laws of Sparta and Crete, which he considered ‘sisters’. 99 Plato even went so far as to say that the model was Egyptian.100 It all works out perfectly. The collectivistic society he has in mind is exemplified by the ‘oriental despotism’. 101 The only variation Plato introduces—and he is forced to introduce due to the decline of the old religious beliefs—is to use philosophy as a substitute for religion. Consequently, philosophy is a sort of belief, construed as the exclusive repository of truth and political legitimation. After all, nephew of Critias (probably the author of the Constitution of Athens, that fierce attack on the democratic institutions, usually attributed to the ‘Old Oligarch’) and of Charmides, the most important exponents of the Thirty Tyrants, Plato grew up in a political-cultural setting that was not only mortally hostile to democratic institutions, but was also highly aware that economic liberty is the basis of critical discussion and political liberty. 102 If ‘change […] is always highly perilous’ and if opening society to the unknown threatens acquired positions and causes unbearable anxiety, the only solution is eradication of economic liberty. Plato knew the economic reasons for the birth of the city: The origin of the city […] is to be found in the fact that we do not severally suffice for our own needs, but each of us lacks many things […]. As a result of this, then, one man calling in another for one service and another for another, we, being in need of many things, gather many into one place of abode as associates and helpers and to this dwelling together we give the name of city or state.103 This means that Plato also understood that economic activity is, to use a modern expression, a ‘positive-sum game’. Nevertheless, social and economic cooperation should not be based on individual negotiations, but should be completely subordinate to politics, because this makes critical discussion and political liberty impossible.


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As we have already seen, Solon believed that institutions were like money,104 and that each person, restricted only by the general rules of behavior, could make use of them according to his or her personal needs. Thus, the individual was granted great autonomy. Plato, on the contrary, maintains: he who provides for the world has disposed all things with a view to the preservation and perfection of the whole, […]. For any physician or craftsman in any profession does all his work for the sake of some whole, but the part he fashions for the sake of the whole, to contribute to the general good, not the whole for the part’s sake.105 Here we are at the point of annihilating individual autonomy and legitimizing any prescription on the part of those in power, who are the only representatives of the whole, since they are the only repositories of knowledge or of a ‘superior’ knowledge. They represent the ‘privileged point of view on the world’, the part arbitrarily placed above the others, which imperatively dictates to the rest of society what is good and what is bad.106 As a result, the so-called common good—which in closed societies claims to have specific, definable content—is simply an advantage, established from time to time as necessary, for those in power.107 This explains why Plato said that democracy assigns ‘a kind of equality indiscriminately to equals and inequals alike’, 108 or that ‘equal treatment of the unequal ends in inequality’.109 With Plato, intellectual hubris reaches its most dramatically alarming heights. Plato was probably conscious of this. It is significant that Callicles, one of his characters in Gorgias, reprimands the Platonic Socrates for apparent intellectualistic excesses. Here, following one of the fundamental rules of his dialogues, Plato weakens his critic’s position by ad hominem accusations and, as if that were not enough, unpleasantly presents Callicles as the person who makes Socrates realize that he could be dragged off to prison and accused of being a threat to liberty.110 Thus, hubris is absolved of any responsibility. Granted that Callicles is surely a parasite, whose cynicism is detrimental to democracy; but he is shrewd enough not to present himself as an example of a democratic man. The models that he looks to are Themistocles, Cimon, Miltiades and Pericles. Nevertheless, Plato’s Socrates responds:

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if what you previously spoke of as virtue is truly so, namely to satisfy to the full your own appetites and those of others, but if this is not so, but, as in later argument we were compelled to admit only those desires, the satisfaction of which make man better, should be indulged, not those which make us worse, and if for this there is a special art—I cannot admit that any of those mentioned satisfied these demands.111 In other words, the objective is not to create, through democracy, an open social process that can improve each person; on the contrary, it is to make the Other conform to our desire for omnipotence. Callicles is right on target when he says that one should devote oneself to philosophy ‘just so far as it is an aid to education’.112 On the other hand, Pericles himself had said: ‘We love […] learning without loss of vigor’.113 Plato went so far beyond the limits that he reversed the positions of Socrates. And philosophy, once expression of doubt and criticism, was transformed into an instrument of an unassailable truth. Socrates had declared: ‘I have never set up as any man’s teacher’;114 but Plato founds the Academy, a concept alien to Socrates and the Sophists, and offers to be a philosopher king.115

Aristotle: between tribalism and the market The idea that there could be the ‘privileged point of view on the world’ raises the question of who is the bearer of this point of view. In all likelihood, the following could happen: anyone who obsessively projects his delusions of omnipotence on reality gives credence to the existence of the ‘privileged point of view on the world’, which he claims to hold. In any case, the central problem of politics can be summed up in the question: Who should rule? Apropos, Popper writes: It is my conviction that by expressing the problem of politics in the form: ‘Who should rule?’ or ‘Whose will should be supreme?’, etc., Plato created a lasting confusion in political philosophy […]. It is clear that, once the question ‘Who should rule?’ is asked, it is hard to avoid some such reply as ‘the best’ or ‘the wisest’ or ‘the born ruler’ or ‘he who masters the art of ruling’.116


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And the list could go on, because others could add: the technician, the saint, this or that race, this or that class, and so on. ‘But such reply’, Popper continues, ‘convincing as it may sound—for who would advocate the rule of ‘the worst’ or ‘the greatest fool’ or ‘the born slave’?—is […] quite useless’.117 In other words, if we ask that question, from time to time motivated by different arguments [we think] we have found the basis […] for justifying absolutely the political power of some individual or group. However, such a claim is irrational, since an attempt to justify power in the sense that someone or some group is inherently qualified to rule […] is the same as looking for something which does not exist’.118 As we have seen in the previous chapter and also in this one, this was one of the great ‘discoveries’ of Solon, who tried to identify the conditions that nourish economic and social development. Consequently, if we want to pose the problem rationally, we must ignore the old question (Who should rule?) and try to answer a new, more appropriate one: ‘How can we so organize political institutions that bad or incompetent rulers can be prevented from doing too much damage?’. 119 This was exactly what Athenian democracy tried to do. Nevertheless, up to present times Plato’s work has continued to produce its devastating effects. These are found primarily in Aristotelian theory. Clearly, the purpose here is not to obviate Aristotle’s criticism of Plato’s theory of knowledge. It has been rightly written that, ‘when Plato wants to know something near to him, the first thing he does is run in the opposite direction, moving infinitely far away from it, beyond the stars. Thus, from a heavenly place, on the road back, he sees what he can say that makes sense about things of this world’.120 He places his projections at a point far from the world, so that they cannot be revealed easily. Aristotle, on the other hand, claims to start out from ‘perception’ and then go on to the universal. In a ‘canonical’ excerpt of Posterior Analytics, he asserts: ‘As soon as one individual has come to a half in the soul, this is the first beginning of the presence there of a universal (because although it is the particular that we perceive, the act of perception involves the universal, e.g., “man”, not “a man” Callias’.121 Hence, the identity of knowledge and the object known

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becomes even closer and provides knowledge with a base, namely ‘perception’, that cannot be confuted. Therefore, precisely because this identity is closer, Aristotle’s theory of knowledge remains strictly confined within the science of the immutable. Aristotle himself asserts that the ‘nature of scientific knowledge […] may be made clear as follows. We all conceive that a thing which we know scientifically cannot vary’;122 and specifies that ‘scientific knowledge and intuition’ are always true and that ‘no other kind of knowledge except intuition is more accurate than scientific knowledge’.123 This is why Popper not only maintains that Aristotle, with his theory of certain, demonstrable knowledge (episteme), is thoroughly bound to the distinction between truth and opinion; but he also accuses Aristotelian theory of leading to the complete weakening of the ‘critical tradition’.124 It is only a short and consequent step from the science of the immutable to the idea of the ‘Supreme Good’. Those who think they have true knowledge also think they can dictate what is best for everybody. Let us follow Aristotle more directly: If therefore among the ends at which our actions aim there be one which we wish for its own sake, while we wish the others only for the sake of this and if we do not choose everything for the sake of something else (which would obviously result in a process ad infinitum, so that all desire would be futile and vain), it is clear that this one ultimate End must be the Good, and indeed the Supreme Good.125 Here Aristotle means that there must be a hierarchy of ends. And there is no doubt that each one of us needs such a hierarchy in order to act. But Aristotle makes no reference to the scale of preferences formulated, knowingly or unknowingly, by every individual. He is thinking of a common scale of preferences and says: It would be agreed that it must be the object of the most authoritative of the sciences—some science which is preeminently a mastercraft. But such is manifestly the science of Politics; for it is this that ordains which of the sciences are to exist in states, and what branches of knowledge the different classes of the citizens are to learn, and up to what point; and we observe that even the most highly esteemed of the faculties, such as strategy, domestic economy, oratory, are subordinate to the


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political science. Inasmuch then as the rest of the sciences are employed by this one, and as it moreover lays down laws as to what people shall do and things they shall refrain from doing the end of all the others. Therefore, the Good of man must be the end of the science of Politics. For ever though it be the case that the Good is the same for individual and for the state, nevertheless, the good of the state is manifestly a greater and more perfect good, both to attain and to preserve. To secure the good of one person only is better than nothing; but to secure the good of a nation or a state is a nobler and more divine achievement.126 Consequently, politics is a higher order of activity than all the others. It is the independent variable of the system. Exactly as Plato saw it, politics is an ‘architectonic science’, and as such, a part of ‘theoretical science’.127 In other words: ‘the ruler must possess intellectual virtue in completeness (for any work, taken absolutely, belongs to the mastercraftsman, and rational principle is a master-craftsman); while each of the other parties must have that share of this virtue which is appropriate to them’.128 Obviously, Aristotle raises the question of who is ‘bearer of the privileged point of view on the world’ and must rule. His answer is: Inasmuch as happiness is a certain activity of soul in conformity with perfect goodness, it is necessary to examine the nature of goodness. For this will probably assist us in our investigation of the nature of happiness. Also, the true statesman seems to be one who has made the citizens good and law-abiding men—witness the lawgivers of Crete and Sparta, and the other great legislators of history.129 However, if there is any one man so greatly distinguished in outstanding virtue, or more than one but not enough to be able to make up a complete state, so that the virtue of all the rest and their political ability is not comparable with that of the men mentioned, if they are several, or if one, with his alone, it is no longer proper to count these exceptional men a part of the state; for they will be treated unjustly if deemed worthy of equal

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status, being so widely unequal in virtue and in their political ability: since such a man will naturally be as a god among men. Hence, it is clear that legislation also must necessarily be concerned with persons who are equal in birth and in ability, but there can be no law dealing with such men as those described, for they are themselves a law.130 The part counts for the whole. Hence, it is not surprising that Aristotle sees the polis as an intentionally constructed order (taxis) of reduced dimensions, as suggested by the models of Crete and Sparta: Certainly experience also shows that it is difficult and perhaps impossible for a state with too large a population to have good legal government. At all events we see that none of the states reputed to be well governed is without some restriction in regard to members. The evidence of theory proves the same point. Law is a form of order; but an excessively large number cannot participate in order: to give it order would surely be a task for divine power.131 Bound as he is to the idea of an intentionally constructed order, Aristotle is far from imagining the possibility of a great society. If at all possible, this would have to be an intentional order, created by a divinity; but, according to Aristotle, this target is forbidden to men. Furthermore, still captive to his concept, he asks: ‘who will command its over-swollen multitude in war? Or who will serve as its herald, unless he have the lungs of a Stentor?.132 Concerning economic activity, Aristotle disagrees with Solon’s statement that ‘of riches no bound has been fixed or revealed to men’.133 He poses the question as follows: In the primary association […] (I mean the household) there is no function for trade, but it only arises after the association has become more numerous. For the members of the primitive household used to share the commodities that were all their own, whereas on the contrary a group divided into several households participated also in a number of commodities belonging to their neighbors, according to their needs for which they were forced to make their interchanges by way of barter, as also many barbarian tribes do still; for such tribes do not go beyond exchanging actual commodities for actual commodities, for example giving and


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taking wine for corn, and so with the various other things of the sort.134 Unfortunately, at the side of this type of acquisition, ‘belonging in the order of nature to householders’, 135 there is ‘another kind of acquisition, that is specially called wealth-getting’ (chrematistics).136 But this is ‘not natural’ because ‘to this kind it is due that there is thought to be no limit to riches and property’.137 It is obvious that his condemnation of ‘chrematistics’, which is the term used for a market economy, is based on a very limited idea of need. Barter, which is a direct exchange of excess goods and, in any case, represents a gain for the contracting parties (because they improve their positions by bartering), is considered an instrument for obtaining ‘actual commodities’ and satisfying ‘natural’ needs, while monetary exchange would be outside this sphere. This naive view leads to the belief that needs are either ‘natural’ or ‘artificial’ and can be defined once and for all. Hence, it is not surprising that Aristotle—though acknowledging that ‘democracies are states in which all the people participate in all functions, oligarchies where the contrary is the case’138—reaches the following conclusion: At present we are studying the best constitution, and this is the constitution under which the state would be most happy, and it has been stated before that happiness cannot be forthcoming without virtue; it is therefore clear from these considerations that in the most nobly constituted state, and the one that possesses men that are absolutely just, not merely just relatively to the principle that is the basis of the constitution, the citizens must not live a mechanic or a mercantile life (for such a life is ignoble and inimical to virtue), nor yet must those who are to be citizens in the best state be tillers of the soil. 139 Moreover, Aristotle specifies that ‘those who are to cultivate the soil should best of all, if the ideal system is to be stated, be slaves’.140 And he does not hesitate to indicate that the Egyptian and Cretan institutions are his model.141 He does not exclude the possibility of private property, but this should always be distributed under the control of the political power, because the citizens ‘will call property

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“their”, meaning the property of them all, not of each of them severally’.142 Thus, there is a clear continuity with Plato’s work. And yet, as Ortega y Gasset writes, ‘in Aristotle there is a surprising combination of modernity (=relative modernity) and primitivism’. 143 Aristotle realizes that the ‘real cause’ of all social evils is not ‘the absence of communism, but wickedness, since we see far more quarrels occurring among those who own or use property in common than among those who have their estates separate; but we notice that those who quarrel as result of their partnerships are few when compared with the total number of private owners’.144 Aristotle adds that ‘it is just to state not only all the evils that men will lose by adopting communism, but also all good things; [… because] life in such circumstances is seen to be utterly impossible’.145 Aristotle understands that there are economic reasons for the origin of a city. 146 He believes that the Spartans did not have a ‘good’ lawgiver,147 and that, in any case, there is no need to look for the ‘best constitution’, but a constitution ‘that is practicable under the circumstances but an inferior one’.148 He stresses that the continual adoption of legislative provisions destroys the law. 149 In general, legislative and/or economic interventionism is the ‘legendary jar with a hole in it’:150 ‘and this comes about when the decrees of the assembly over-ride the law’.151 But what gives guarantees to the citizens is the rule of law.152 In Aristotle we can also find early signs of what we now call ‘consumer’s sovereignty’. He says: About some things the man who made them would not be the only nor the best judge, in the case of professionals whose products come within the knowledge of laymen also: to judge a house, for instance, does not belong only to the man who built it, but in fact the man who uses the house (that is, the householder) will be an even better judge of it, and a steersman judges a rudder better than a carpenter, and the diner judges a banquet better than the cook.153 In keeping with this, Aristotle distinguishes between the use value and the exchange value,154 and he explains that two objects to be exchanged must be ‘commensurable’: ‘It is for this end that money has been introduced, and becomes in a sense an intermediate; for it measures all


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things, and therefore the excess and the defect—how many shoes are equal to a house or to a given amount of food’.155 Finally, in Aristotle we find the principle of what today we call ‘methodological individualism’. He asserts: ‘In every […] matter it is necessary to analyze the composite whole down to its uncompounded elements (for these are the smallest parts of the whole)’.156 Could Aristotle have freed himself from the Platonic restrictions? There is no doubt, as Polanyi points out, that ‘Aristotle discovers the economy’.157 But he does not discover or does not accept the social process. And this discovery or acceptance is the only possible way to rid ourselves of the ‘science of the immutable’. Nevertheless, exactly because ‘Aristotle discovers the economy’, there is an opening in his work, which can become an irreparable, devastating chasm. It is the distinction between use value and exchange value. We can say that the use value, our personal evaluation, represents the doxa, which nourishes the open process from which (by interaction on the market) the exchange value derives. In other words, interaction establishes the economic value and is also the means by which we search for the truth. It is not by chance that, in connection with this, Georg Simmel writes: Objective economic value […] crystallized out of subjective demands because the form of equality and of exchange was available, and because these relationships had an impartiality transcending subjectivity which the single elements lacked. Those methods of cognition may well be subjective […]; but they approach—even though by an infinite process of evoking each other—the ideal of objective truth by the fact that each finds its supplement and therewith its legitimation through the other.158 And moreover: Relativity is not a qualification of an otherwise independent notion of truth but is the essential feature of truth. Relativity is the mode in which representations become truth, just as it is the mode in which objects of demand become values.159 As Popper stresses, this means that interaction is the means ‘by which we constantly transcend ourselves, our talents, our gifts’.160 It affects our entire life, and not just economic exchange in the strict sense,161

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and is the exclusive possibility we have of raising ourselves from the ‘morass of our ignorance; how we throw a rope into the air and then swarm up it—if it gets any purchase, however precarious, on any little twig’.162 In such a way, we free ourselves from psychologism and ‘epistemological expressionism’.163 Aristotle could have been helped by the distinction, which he even introduced, between ‘distributive justice’ and ‘commutative justice’.164 Distributive justice occurs when the rate of exchange is determined by the status of the contracting parties. In this case, the distribution of benefits is based on political prescriptions, which define the social stratification of a rigidly hierarchical system. Commutative justice, on the other hand, occurs when there is voluntary free exchange. But here Aristotle strongly insists on the equality of the values exchanged, not realizing that exchange is possible only if different use values correspond to an equal exchange value. This is to say that the exchange is possible because two goods, which have the same market value, are evaluated differently by their holders. As we shall see in Chapter 5, the first to understand all this were the Spanish late-scholastics. Aristotle does not go so far.165

Cicero: between liberty and Platonism As we mentioned toward the end of the preceding chapter, Cicero understood that liberty is a juridical problem. He even states that ‘legum denique idcirco omnes servi sumus, ut liberi esse possimus’.166 This means that liberty comes from a normative web, which defines the boundaries of our actions. This network does not suggest what content we must give to our actions. We are free to choose whether to buy or sell a good, enter into marriage, or make a donation. And yet, once an action is taken, a set of legal rules is applied; it regulates typical situations and defines rights and duties that, being oriented by the principle of neminem laedere, safeguard the parties. It is completely understandable that Rome should arrive at this idea of interpersonal relationships. In Livy, we read: The longer the war dragged on and success and failure altered the situation, and quite as much so the attitude of men, superstitious fears, in large part foreign at that, invade the state to such a degree that either men or else gods suddenly seemed changed. And now not only in secret and within the walls of houses were


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Roman rites abandoned, but in public places also and in the Forum and on the Capitol there was a crowd of women who were following the custom of the fathers neither in their sacrifices nor in prayers to the gods.167 In commenting on this passage, Ortega y Gasset says: Livy, who wrote a history that is one of the most pleasant to read, as we know was not a great historian and we cannot expect from him further explanations. Nor can we expect from him deep understanding of the enormity of the fact that he recounts, without minimally changing the marvelous tranquillity of his style […]. Nevertheless, for us this event is the official historical declaration that Rome […] began to see itself faced with a world of diversity.168 For men of different philosophical and religious ideas to live together, there must be an abstract normative network, which sets the boundaries among actions while allowing freedom of choice. Cicero clearly explains what all this means. He says to Chrisippus: When a man enters the foot-race, it is his duty to put forth all his strength and strive with his foot to trip, or his hands to foul, a competitor. Thus in the stadium of life, it is not unfair for anyone to seek to obtain what is needful for his own advantage, but has no right to wrest it from his neighbor.169 In juridical terms, this is an insistent condemnation of dolus malus. Cicero asserts: We do not need to discuss cut-throats, poisoners, forgers of wills, thieves, and embezzlers of public money, who should be repressed not by lectures and discussions of philosophers, but by chains and prison walls; but let us study here the conduct of those who have the reputation of honest men.170 [We] must, therefore, keep misrepresentation entirely out of business transactions.171 Briefly stated, Cicero wants usefulness to coincide with honesty. In fact, he specifies: ‘our standard is the same for expediency and for moral rectitude’.172 And again:

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The man who does not accept the truth of this will be capable of any sort of dishonesty, any sort of crime. For if he reasons, ‘That is, to be sure, the right course, but this course brings advantage’, he will not hesitate in his mistaken judgment to divorce two conceptions that Nature has made one; and that spirit opens the door to all sorts of dishonesty, wrong-doing, and crime.173 In other words, you should not damage your neighbor even when you are absolutely sure no one will ever find out: ‘Suppose, then, that a good man had such power that with a snap of his fingers his name could steal into rich men’s wills, he would not avail himself of that power—no, not even though he could be perfectly sure that no one would ever suspect it’.174 A possibility such as this of being able to insert your name secretly in a will would have made Marcus Crassus happy, Cicero adds: ‘he would, I warrant you, dance in the forum’.175 But the righteous man, the one whom he feels to be a good man, would never rob anyone of anything to enrich himself. If anybody is astonished at this doctrine, let him confess that he does not know what a good man is. If, on the other hand, anyone should desire to unfold the idea of a good man which lies wrapped up in his own mind, he would then at once make it clear to himself that a god man is one who helps all whom he can and harms nobody, unless provoked, by wrong.176 Cicero also concludes that, without respect for the general rules of social living, it is impossible to keep even a band of criminals together: ‘For, if a robber takes anything by force or by fraud from another member of the gang, he loses it standing even in a band of robbers’.177 All this, plus what Cicero has Cato the Censor say in De republica (‘our own commonwealth was based upon the genius, not of one man, but of many; it was founded, not in one generation, but in a long period of several centuries and many ages of men […] there never has lived a man possessed of so great genius that nothing could escape him, nor could the combined powers of all the men living at one time possibly make all necessary provisions for the future without the aid of actual experience and the test of time’),178 might have suggested that the concurrence of utility and honesty is not a principle consciously created by man, but that was established over time as an


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indispensable condition for social living. And yet this is exactly what Cicero does not realise. He catches a glimpse of the historical process, but denies the competitive process, which is the main fuel of the historical process. The idea of governing by means of competition is foreign to him. We probably have to agree with Pohlenz when he says that, even though it was ‘natural to refer to Panaetius’ for the ‘concrete problems of present’, Cicero had Plato as his ‘great model both from the point of view of art and from that of thought’.179 Thus, despite his clear understanding of the legal nature of the concept of liberty and despite the emphasis he placed on the inadequacy of individual minds and on the cultural enrichment produced by the historical process, Cicero indulges in praise of the ‘wise man’,180 who is the one most likely to have the ‘reason which is in Nature’,181 or in praise of the best: In a state ruled by its best men, the citizens must necessarily enjoy the greatest happiness, being freed from all cares and worries, when once they have entrusted the preservation of their tranquillity to others, whose duty it is to guard vigilantly and never to allow the people to think that their interests are being neglected by their rulers. For that equality of legal rights of which free peoples are so fond cannot be maintained […] and what is called equality is really most inequitable. For when equal honor is given to the highest and to the lowest […] there this very ‘fairness’ is most unfair; but this cannot happen in states ruled by their best citizens.182 Furthermore: ‘if the management of a state is committed to more than one, you can see that there will be no authority at all to take command, for unless such authority is a unit, it can amount to nothing’.183 Romulus first discovered and approved the principle which Lycurgus had discovered at Sparta a short time before—that a state can be better governed and guided by the authority of one man, that is by the power of a king, if the influence of the state’s most eminent men is joined to the ruler’s absolute power.184 In keeping with this, Cicero maintains that it is possible to rationally establish universal ethics values:

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True law is the right reason, in harmony with eternal, universal and unchangeable nature, whose orders remind man of his duty and whose prohibitions distract him from deceit […]. It is not legitimate to replace it with other law, nor change any part of it or completely cancel it, because neither the people, nor the senate can dispense us from observing a law has no need of a Sextus Aelius to comment or explain it. In fact, it is not different in Rome or in Athens or today or tomorrow. It is unique, eternal, unchangeable and capable of controlling people in any time. Because one is the lord and guide of all things, the god, who conceived, created and enacted such a law.185 If the law of nature is the truth accessible to man, it is not surprising that Cicero goes so far as to state that the ‘the highest good, the standard of all our actions, towards the attainment of which they should all be directed’ is deducible rationally.186 To conclude the discussion of Cicero’s Platonism, mention should be made of his contempt for economic activities and his lack of understanding of societies based on the market. He does not hesitate to say: Unbecoming to a gentleman, too, and vulgar are the means of livelihood of all hired workmen whom we pay for mere manual labor, not for artistic skill; for in their case the very wage they receive is a pledge of their slavery. Vulgar we must consider those also who buy from wholesale merchants to retail immediately; for they would get no profits without a great deal of downright lying […]. And all mechanics are engaged in vulgar trades; for no workshop can have anything liberal about it. Least reputable of all those trades which cater for sensual pleasures: fishmongers, butchers, cooks, and poulterers, and fishermen’.187 And, in reference to market cities, Cicero writes: Maritime cities also suffer a certain corruption and degeneration of morals; for they receive a mixture of strange languages and customs, and import foreign ways as well as foreign merchandise, so that none of their ancestral institutions can possibly remain unchanged. Even their inhabitants do not cling to their dwelling places, but are constantly being tempted far from home by soaring hopes and dreams; and even when their bodies stay at


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home, their thoughts nevertheless fare abroad and go wandering. In fact, no other influence did more to bring about the final overthrow of Carthage and Corinth, though they had long been tottering, than this scattering and dispersion of their citizens, due to the fact that the lust for trafficking and sailing the seas had caused them to abandon agriculture and the pursuit of arms. Many things too that cause ruin to states as being incitements to luxury are supplied by the sea, entering either by capture or import; and even the mere delightfulness of such a site brings in its train many an allurement to pleasure through either extravagance or indolence. And what I said of Corinth may perhaps be said with truth of the whole of Greece’.188

4 The failure of psychologism and the question of private property

Conversion versus critical discussion In the previous chapter, we have spoken about psychologism in Plato’s work. With the help of various critics, we shall now explain this further. In an essay published in 1860, Herbert Spencer writes: Plato’s model republic—his ideal of a healthful body politic—is consciously to be put together by men; just as a watch might be; and he manifestly thinks of societies in general as originated in this manner. Still more specifically does Hobbes express this view. ‘For by art’ he says ‘is created that great Leviathan called Commonwealth’. And he even goes so far as to compare the supposed social compact, from which a society suddenly originates, to the creation of a man by the divine fiat […] thus they both fall into the extreme inconsistency of considering a community as […] an artificial mechanism’.1 To assume that society can be constructed artificially, outside the social process, and that our intentions can shape reality, is mere psychologism. Popper carefully analyzed this and has the following to say: Psychologism is […] forced, whether it likes it or not, to operate with the idea of a human nature and a human psychology as they existed prior to society […]. It is a desperate position because this theory of a pre-social human nature which explains the foundation of society […] is not only an historical myth, but also, as it were, a methodological myth. It can hardly be seriously 62

Failure of psychologism and question of private property

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discussed, for we have every reason to believe that man or rather his ancestor was social prior to being human (if considering, for example, that language presupposes society). But this implies that social institutions and, with them, typical social regularities or sociological laws, must have existed prior to what some people are pleased to call human nature’.2 Popper is right. In fact, as was already mentioned, Plato projects on the reality a ‘human nature’ which precedes society and even precedes our birth. George Grote, who later than Spencer wrote a great deal about Plato’s work, shed light on the way Plato builds his theory. Grote states: He [Plato] regards as fictions the accredited stories respecting Gods and Heroes, which constituted the matter of religious belief among his contemporaries; being familiarised to all through votive offerings, such as the robe annually worked by women of Athens for the Goddess Athens. These fictions he supposes to have originally obtained credence either through the charm of poets and narrators, or through the deliberate coinage of an authoritative lawgiver […]. Once received into the general belief, which is much more an act of emotion than of reason, such narratives retain their hold.3 Grote concludes: This is what Plato assumes as the natural mental condition of society, to which he adopts his improvements. He disapproves the received fictions, not because they are fictions, but because they tend to produce a mischievous ethical effect, from the acts which they ascribe to the Gods and Heroes. These acts were such that many of them (he says) even if they had been true, ought never be promulgated. Plato does not pretend to substitute truth in place of fiction; but to furnish a better class of fictions in place of a worse. The religion of the Commonwealth, in his view, is to furnish fictions and sanctions to assist the moral and political views of the lawgiver, whose duty it is to employ religion for this purpose.4 Therefore, Plato’s aim is to replace myths and old beliefs with new ones. Grote maintains that, even if Plato ‘begins his career with the

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Failure of psychologism and the question of private property

confessed ignorance and the philosophical negative of Sokrates’, he closes his journey with the ‘peremptory, dictatorial affermative of Lykurgus’.5 From the point of view of knowledge, the logical consequence of all this is that critical discussion, which is an aspect of the social process and corresponds to Socratic method, 6 had to cede its place to conversion. Truth is no longer the impermanent product of a free exchange of ideas. It is an attribute of a special group, the Platonic philosophers, who possess knowledge that combines truth and virtue, to which everyone else must be converted. The change is not a result of an open social process, but of a conversion. In fact, in Letter VII, Plato says: Who is genuinely devoted to philosophy and is a man of God with a natural affinity and fitness for the work, sees in the course marked out a path of enchantment, which we must at once strain every nerve to follow, or die in the attempt.7 This is why Hans Kelsen does not hesitate to write: The rational speculation about concepts affords no direct access to this experience; dialect is rather to be understood as a spiritual exercise similar to that of prayer. The knowledge of the good does not follow as a logical conclusion of the dialectical process; but it is an allotment of grace of the soul which has purified itself of all sensuality by meditation.8 Consequently, it is here useful to join Jaeger in asking the following questions: Had not Plato […] taught that the Logos is the golden link through which the Lawgiver and Teacher and his work are connected with the divine Nous? Had he placed man in a universe that its perfect order and harmony was an eternal model for the life of man?9 And we add: was it not in virtue of some divine wisdom that Plato proposed to cancel what exists? To clarify the terms of the problem, one should heed the words of Parmenides:


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The mares that carry me, as far as impulse might reach, Were taking me, when they brought and placed me upon the muchspeaking route Of the goddess, that carries everywhere unscathed the man who knows; Thereon was I carried, for thereon the much-guided mares ere carrying me, Straining to pull the chariot, and maidens were leading the way. The axle, glowing in its naves, gave forth the shrill sound of a pipe, (For it was urged on by two routed Wheels at either end), even while maidens, Daughters of the Sun, were hastening To escort me, after leaving the House on Night for the light, Having pushed back with their hands the veils from their heads. There are the gates of the paths of Night and Day, And a lintel and a threshold of stone surround them, And the aetherial gates themselves are filled with great doors; And for these Justice, much-avenging, holds the keys of retribution. Coaxing her with gentle words, the maidens Did cunningly persuade her that she should push back the bolted bar for them Swinging in turn in their sockets the brazen posts Fitted with rivets and pins; straight through them at the point Did the maidens drive the chariot and mares along the broad way. And the goddess received me kindly, and took my right hand with her hand, And uttered speech and thus addressed me: ‘Youth attended by immortal charioteers, Who come to our House with mares that carry you, Welcome; for it is no ill fortune that sent you forth to travel This route (for it lies far indeed from the beaten track of men), But right and Justice. And it is right that you should learn all thing, Both the steadfast heart of persuasive truth, And the beliefs of mortal, in which there is not true trust. But nevertheless you shall learn these things as well, how the things which seem had to have genuine existence, permeating all things completely’.10 Jaeger comments: No one who studies this supernatural overture could ever suppose that the philosopher’s aim in this passage is merely to provide an effective stage-setting. His mysterious vision in the realm of light is a genuine religious experience: when the weak human eye turns towards the hidden truth, life itself becomes transfigured. This is a kind of experience that has no place in the religion of the official cults. Its prototype is rather to be sought in the devotions we find in the mysteries and initiation ceremonies […]. Indeed,

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the ‘philosophical school’ was originally nothing but secularized form of just such a religious conventicle’.11 Therefore, as we have already pointed out, if the historical Socrates had coincided with Plato’s Socrates, there would not have been a tragedy and we would not need Socrates’ work. But the fact is that Plato was ‘Socrates’ Judas’.12 He was the one who most profoundly theorized the counterrevolution, which was a reaction to the establishment of the open society, the only real event that revolutionarized and revolutionarizes the history of man.13

The doctrine of ‘manifest truth’ If knowledge does not depend on a public procedure, in which every conjecture can be subject to refutation, it is simply the result of exercising psychic activity, which leads to a presumed sure and demonstrable truth, to the belief in ‘manifest truth’. Such a belief is a recurring temptation of man. It is also present in Bacon and Descartes. Popper deals with this when he brings together Bacon and Aristotle, Descartes and Plato.14 Popper’s thesis is perfectly legitimate. One need only recall that Bacon maintains that truth is attained through an unprejudiced ‘reading’ of the ‘book of nature’; and Descartes believes that it is reached through ‘systematic doubt’, which also refers to the intellectualistic task of eliminating all prejudice. Popper adds that perhaps Bacon and Descartes ‘did not dare to appeal to our critical judgement’, because they were afraid that this might lead to ‘subjectivism and arbitrariness’.15 But Popper is too optimistic here and probably overlooks the attraction of the fundamental belief of Bacon and Descartes. As we know, this spurred Bacon to write The New Atlantis, which is a utopia where the exemplary life is that of the men of science, to whom public monuments are dedicated. As for Descartes, during his discovery of the method, he states in his personal notes: ‘X novembris 1619, cum plenus forem enthousiasmo, et mirabilis scientiae fundamenta reperirem’.16 Hence, it is not surprising that Descartes sang the praises of Sparta, because the laws of that city, ‘being all the invention of one man, they all tended towards the same end’.17 In other words, it should be stressed that lack of understanding of the ‘logic of scientific discovery’ was accompanied by that of the social process. In the first book of Politics, Aristotle asserts that the city


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‘exists by nature’;18 and immediately after he says the same about the family. For a moment it almost seems the idea that society is a spontaneous order is taking hold. And yet it is a weak light, which soon fades and disappears completely before the solid, undisputed concept of an order (taxis) intentionally constructed and therefore subject to the sovereignty of political power. The same can be affirmed for the position of Lycophron, who says that ‘law is a covenant’, a guarantee of men’s just claims on one another’.19 This is, perhaps, the first formulation of the contract theory. But contractualism, precisely because it assumes subjects can ‘respond’ intentionally to the question of order, acts as a form of ‘false individualism’, which does not need a social process to solve the problems of collective living. It is like saying that contractualistic theory is the result of an inability to conceive of society as an independent, spontaneous normative source. Consequently, contractualism does not free itself from the dominance of political power, does not separate the socio-economic element from the political, and does not give space to the autonomy of the civil society. A good example of this can be found in Hobbes. And yet it is also found in a less ‘suspect’ form in Locke. As we know, for Locke the ‘chief end’ of society is the ‘preservation of property’.20 Nevertheless, he identifies ‘civil society’ with ‘political society’. He says: It is easy to discern who are, and are not, in political society together. Those who are united into one body, and have a common established law and judicature to appeal to, with authority to decide controversies between them and punish the offenders, are in civil society one with another.21 In other words, although ‘the end of civil society’ is ‘to avoid and remedy those inconveniences of the state of Nature’,22 the political pact is the intentional element at the origin of society. Therefore, it is the task of politics to solve the problem of order. In fact, Locke claims there should be an established, settled, known law, received and allowed by common consent to be the standard of right and wrong, and the common measure to decide all controversies between them. For though the law of Nature be plain and intelligible to all rational creatures, yet men, being biased by their interest, as well as

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ignorant for want of study of it, are not apt to allow of it as a law binding to them in the application of it to their particular cases.23 Thus, the problem of order is exclusively a political one. And Locke, exactly because he believes in the existence of a law of nature which is ‘plain and intelligible’, remains within the sphere of the doctrine of ‘manifest truth’.24 This is why, when Leo Strauss asserts that Locke would give us ‘the solution of the political problem by economic means’,25 he does not capture the exact meaning of Locke’s proposal and, in addition, is misleading in posing the problem in this way and offering a possible solution. To summarize Locke’s position, it would be better to say that, since he emphasizes the importance of property, he realizes that the question is an economic one. Nevertheless, he continues to give to politics a sovereignty which, though limited and controlled, is in contrast with his premises. To avoid this situation, it is necessary to renounce the idea of a ‘plain and intelligible’ natural law. But the void left by this renunciation must be filled; and this can only be done by definitively giving up any ‘privileged point of view on the world’ and trusting in the social process. The economic must be separated from the political. There must be an awareness that the basic problem is scarcity of material resources, time and knowledge (without this scarcity there would be no problem), and the solution must be sought in a process of social cooperation, whose normative habitat must be identified. ‘Discovering’ the society, or separating the civil society from the political one, separates the civil society from the state. This sheds light on the largest part of our life, the social dimension (interaction with the Other), which is obscured whenever the ‘privileged point of view on the world’ re-emerges and renders the life of the individual and the collectivity an exclusively political fact. In such a situation, the social process as an open procedure of control, correction of errors and exploration of the unknown, is eliminated and replaced by the repeated ‘celebration’ of the privileged source of knowledge. This leads to institutionalization of an enemy-scapegoat, who can be blamed for any failure and thus prevents, for as long as possible, that these failures undermine the constituted order.26 Under these circumstances, everything real is interpreted (as Hegel would) through the psychological projection of the one who is this privileged source of knowledge and that, for this reason, holds the power. Obviously, there is no place for the social sciences, because


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there is no social process or ‘open’ world in which to look for direction. Therefore, the alternative is either a ‘privileged point of view on the world’ and a holistic vision of reality or a lack of a privileged source of knowledge and social sciences. In the former case, the phenomena of collective life are presented as an intentional product of whoever is in power or of ‘opposing powers’. In the latter case, the facts are no longer the positive or negative projections of some psychologistic force, but originate in a social process. In this process, there are undoubtedly intentional consequences (that need no explanation); and yet there are also unintentional consequences, due to the ‘process’, i.e., to the aggregation of all the actions one attempts to explain by critical discussion.27 If so, the doctrine of ‘manifest truth’ cannot be adopted as the gnoseological basis of the social sciences. Above all, it cannot be the gnoseological basis of an open society. In Locke, the relationship between ‘manifest truth’ and natural law is clear. In reference to Locke’s position, Hans Kelsen says that ‘many of the followers of the natural-law doctrine argue that one of the essential purpose of the state’ is ‘to protect the right of property’.28 Kelsen also asserts that ‘such statements’ are ‘made by generally recognized authorities’. And yet, he continues, these scholars do not explain why the ‘natural-law doctrine’ may be considered a ‘strong bastion in the defense against communism’.29 In fact, Kelsen adds, ‘on the basis of the natural-law doctrine’, it is also possible to maintain that ‘private property is against nature and the source of all social evils’.30 And here he uses, as an example, the position of Morelly.31 But one should bear in mind also Rousseau and others.

Harrington and Bernier: private property and freedom In speaking of Locke in particular, Pipes says that Locke’s Two Treatises of Government mark a ‘regression’, because they rest ‘on the metaphysical concept of Natural Law rather than on political sociology’.32 There is no doubt that the doctrine of ‘manifest truth‘ should be rejected. Consequently, it is easy to agree with Pipes’ criticism of ‘the metaphysical concept of Natural Law’. But it is possible to agree with him also when he asserts that the natural-law doctrine ignores the results obtained by political sociology. Here Pipes refers to James Harrington, who published The Commonwealth of Oceana in 1756. Pipes says:

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He [Harrington] was the first political theorist to view political power as a by-product of economics, or, more specifically, of the distribution of property between the state and the population.33 Pipes adds: He [Harrington] talked of an ‘equilibrium’ of property rights between crown and subjects, a notion which had great appeal in the age of the mechanistic science. His thesis was as simple as it was innovative: he who controls the country’s wealth controls its politics, in large measure because political power rests on military might and the armed forces must be paid.34 Pipes’ statements are correct. In fact, in Harrington’s work, we can read: If one man be sole Landlord of a Territory, or overbalance the people, for example, three part in four he is Grand Signior: for so the Turk is called from his Property; and his Empire is absolute Monarchy.35 Moreover: If the whole people be Landlord, or hold the Lands so divided among them, that no one man, or number of men, within the compass of the Few or Aristocracy, overballance them, the Empire (without the interposition of force) is a commonwealth.36 Hence, Harrington realized that there is no political freedom without private property. He understood that the existence of private property made political freedom and the growth of the West possible; and the absence of private property condemned the peoples of the East to backwardness and slavery. Therefore, once again, Pipes is correct when he says that Locke’s natural-law claims for private property is a ‘regression’ in respect to Harrington, whose work offered something more: the awareness of the connection between private property and political freedom (not a mere petition). Harrington’s is not the only work that might have helped Locke. Pipes also speaks of Henry Neville, but Jean-Baptiste Tavernier and, above all, François Bernier should be not neglected.


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Bernier surely projected the strongest light on the connections among property, freedom and growth. We do not know whether Bernier read Harrington. But his analysis is clear. He said: I wish to explain how it happens that, although this Empire of the Mogul is such an abyss for gold and silver […], these precious metals are not in greater plenty here than elsewhere; on the contrary, the inhabitants have less the appearance of a moneyed people than those of many other parts of the globe.37 Bernier’s explanation was: The King, as proprietor of the land, makes over a certain quantity to military men, as an equivalent for their pay; and this grant is called jah-ghir, or, as in Turkey, timar, the word jah-ghir signifying the spot from which to draw, or the place of salary. Similar grants are made to governors, in lieu of their salary, and also for the support of their troops, on condition that they pay a certain sum annually to the King out of any surplus revenue that the land may yield. The lands not so granted are retained by the King as the peculiar domains of his house, and are seldom, if ever, given in the way of jah-ghir; and upon these domains he keeps contractors, who are also bound to pay him an annual rent. The persons thus put in possession of the land, whether as timariots, governors, or contractors, have an authority almost absolute over the peasantry, and nearly as much over the artisans and merchants of the towns and villages within the district; and nothing can be imagined more cruel and oppressive than the manner in which it is exercised’.38 Bernier also describes what happens in a system like this: There is no one before whom the injured peasant, artisan, or tradesman can pour out his just complaints; no great lords, parliaments, or judges of local courts exist, as in France, to restrain the wickedness of those merciless oppressors, and the Kadis, or judges, are not invested with sufficient power to redress the wrongs of these unhappy people.39 The consequences are: This debasing state of slavery obstructs the progress of trade and influences the manners and mode of life of every individual. There

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can be little encouragement to engage in commercial pursuits, when the success with which they may be attended, instead of going to the enjoyments of life, provokes the cupidity of a neighbouring tyrant possessing both power and inclination to deprive any man of the fruits of his industry. When wealth is acquired, as must be sometimes the case, the possessor, so far from living with increased comfort and assuming an air of independence, studies the means by which he may appear indigent: his dress, lodging, and furniture, continue to be mean, and he is careful, above all things, never to indulge in the pleasures of the table. In the meantime, his gold and silver remain buried at a great depth in the ground; agreeable to the general practice among the peasantry, artisans and merchants, whether Mahometans or Gentiles, but especially among the latter, who possess almost exclusively the trade and wealth of the country, and who believe that the money concealed during life will prove beneficial to them after death.40 Bernier adds: From what I have said, a question will naturally arise, whether it would not be more advantageous for the King, as well as for the people, if the former ceased to be the sole possessor of the land, and the right of private property were recognised in the Indies as it is with us? I have carefully compared the condition of European states, where that right is acknowledged, with the condition of those countries where it is not known, and am persuaded that the absence of it among the people is injurious to the best interests of the Sovereign himself’.41 It follows that a tyranny […] owing to which those wretched people either have no children at all, or have them only to endure the agonies of starvation, and to die at a tender age.42 Therefore, a profound and universal ignorance is the natural consequences of such a state of society as I have endeavoured to describe. Is it possible to establish in Hindoustan academies and colleges


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properly endowed? Where shall we seek for founders? Or, should they be found, where are the scholars? Where are the individuals whose property is sufficient to support their children at college? Or, if such individuals exist, who would venture to display so clear a proof of wealth? Lastly, if any persons should be tempted to commit this great imprudence, yet where are the benefices, the employments, the offices of trust and dignity, that require ability and science and are calculated to excite the emulation and the hopes of the young student?’.43 As a result, the sovereign is surrounded by slaves, ignorant and brutal; by parasites raised from the dregs of society; strangers to loyalty and patriotism; full of insufferable pride, and destitute of courage, of honour, and of decency.44 Bernier concludes: Those three countries, Turkey, Persia, and Hindoustan, have no idea of the principle of meum and tuum, relatively to land or other real possessions; and having lost that respect for the right of property, which is the basis of all that is good and useful in the world, necessarily resemble each other in essential points: they fall into the same pernicious errors, and must, sooner or later, experience the natural consequences of those errors—tyranny, ruin and misery.45 Consequently, the Platonic philosopher must convert all of society. But this is only possible if the habitat of critical discussion is eradicated. Thus, private property, the market and the entire system of laws and values associated with them, must be eliminated. If this is so, it is surprising that Theodor Gomperz, in response to a question about the possibility of seeing Plato as a ‘forerunner of the modern socialists and communists’, asserts that these ‘modern movements strive to obtain for the community as a whole’, while ‘Plato proposed to enact merely for his upper or ruling classes of warriors and guardians’.46 Gomperz does not realize that, even when collectivism is justified by egalitarian ideologies, it is always accompanied by the ‘privileged point of view on the world’. This means that the bureaucratic-military class, which hold that point of view, occupy a

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higher social position. Hence, it is not the community that is considered ‘as a whole’, but a part of it. Plato’s plan and that of modern communist movements follow the same path and produce the same consequences. In 1920, Bertrand Russell correctly maintains: It may be assumed that every teacher of Plato throughout the world abhors Bolshevism, and that every Bolshevik regards Plato as an antiquated bourgeois. Nevertheless, the parallel is extraordinarily exact between Plato’s Republic and the regime which the better Bolsheviks are endeavouring to create. Bolshevism is internally aristocratic and externally militant.47 Later on, Russell says: Sparta stood for oligarchy; so did Plato’s family and friends, who were thus led to become Quislings. Their treachery is held to have contributed to the defeat of Athens. After that defeat, Plato set to work to sing praises of the victors by constructing a Utopia of which the main features were suggested by the constitution of Sparta. Such, however, was his artistic skill that Liberals never noticed his reactionary tendencies until his disciples Lenin and Hitler had supplied them with a practical exegesis.48 Thus, Plato is considered a ‘forerunner’ of both Lenin and Hitler. In fact, the ideologists of National Socialism openly declared themselves to be followers of Plato and the connection to him is clear in their attempt to close society and establish the ‘privileged point of view on the world’.49 In regard to the ‘link’ between Lenin and Hitler, it only seems surprising. Russell understood that Bolshevism is ‘internally aristocratic’ and this is enough to render its egalitarianism a mere ideological cover up.50 However, to be more precise, it is in the utopias that sprang up in Athens, in opposition to the democratic system, that we can find the early tie between economic structure and political freedom. In other words, Harrington defended private property to defend freedom. But the first people in Athens to understand the connection between the economic and political aspects of social life were those who were opposed to democracy. And here one must necessarily speak of Plato. Apropos, Karl Popper writes:


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Plato’s greatness as a sociologist does not lie in his general and abstract speculations about the laws of social decay. It lies rather in the wealth and detail of his observations, and in the amazing acuteness of his sociological intuition. He saw things which had not been seen before him, and which were rediscovered in our own time.51 Of the things Plato saw, Popper mentions the importance given to the ‘economic background of the political life’, a ‘theory revived by Marx under the name of historical materialism’.52 The Athenian oligarchs and Plato understood that private property and the market were the basis of an open society and that the reestablishment of the ‘privileged point of view on the world’ would be possible only if private property and the market were suppressed: because there is no fundamentum inconcussum where there are private property and the market. Private property, the market and critical discussion go hand in hand. To eliminate critical discussion, private property and the market must be abolished. This leads to a habitat that closes society and re-establishes the ‘privileged point of view on the world’. There is no critical discussion where collectivism closes society. The abolition of private property and the market inhibits the free social process, establishes conditions that make it impossible to challenge the ‘privileged point of view on the world’. On June 2, 1853, Marx writes to Engels: On the formation of Oriental cities one can read nothing more brilliant, graphic and striking than the old François Bernier […]: Travels Containing a Description of the Dominion of the Great Mogul, etc […] he remarks, among other things: […] the particular condition and government of the country, namely that the King is the one and only proprietor of all the land in the kingdom, from which it follows as a necessary consequence that a whole capital city like Delhi or Agra lives almost entirely on the army and is therefore obliged to follow the king if he takes the field for any length of time. For these towns neither are nor can be anything like Paris, being virtually nothing but military camps, only a little better and more conveniently situated than the open country’.53 Engels replies on June 6:

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The absence of property in land is indeed the key to the whole East. Herein lies its political and religious history.54 Therefore, it is truly ironic that, although Marx and Engels knew what a society without property was like, they still proposed for the West what already was a very sad destiny for the people of the East.55

5 Mandeville and the Scottish moralists The discovery of society as a spontaneous order

A science of Good and Evil is impossible: moral rules are a product of the social process If the privileged source of knowledge is rejected, there can be no science of Good and Evil. Locke insisted: ‘it appears not that God has ever given any such Authority to one Man over another, as to compel any one to his Religion’;1 he added that ‘no Peace and Security, no not so much as Common Friendship can ever be established or preserved amongst Men, so long as this Opinion prevails, that Dominion is founded in Grace, and that Religion is to be propagated by force of Arms’.2 Nevertheless, until belief in manifest truth is accepted, the danger of a revival of the ‘privileged point of view on the world’ should not be underestimated. The only defense against this danger is to give up that belief and uproot the plant that nourishes the claim of a science of Good and Evil. This is what Mandeville, Hume and Smith did with the advance of the market and the birth of an open society. According to Mandeville, ‘we are ever pushing our Reason which way soever we feel Passion draw it, and self-love pleads to all human Creatures for their different views, still furnishing every individual with Arguments to justify their Inclination’.3 Therefore, there is no science of Good and Evil: reason only justifies our preferences and what is advantageous to us. Hume writes: ‘morality consists not in any relations that are objects of science […] it consists not in any matter of fact, which can be discovered by the understanding […] morality is not object of reason’.4 Hume asks himself: ‘But can there be any difficulty in proving that vice and virtue are not matter of fact, whose existence we can infer by reason?’5 And he answers: 77

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Mandeville and the Scottish moralists

Take any action allowed to be vicious; wilful murder, for instance. Examine it in the lights, and see if you can find that matter of fact, or real existence, which you can call vice. In whichever way you take it, you find only certain passions, motives, volitions, and thoughts. There is no other matter of fact in the case. The vice entirely escapes you, as long as you consider the object. You never can find it, till you turn your reflection into your own breast, and find a sentiment of disapprobation, which arises in you, towards this action. Here is a matter of fact; but it is the object of feeling, not of reason.6 For his part, Smith says: Reason cannot render any particular object either agreeable or disagreeable to the mind for its own sake. Reason may show that this object is the means of obtaining some other which is naturally either pleasing or displeasing, and in this manner may render it either agreeable or disagreeable for the sake of something else. But nothing can be agreeable or disagreeable for its own sake, which is not rendered such by immediate sense and feeling. If virtue, therefore, in every particular instance, necessarily pleases for its own sake, and if vice as certainly displeases the mind, it cannot be the mind, it cannot be the reason, but immediate sense and feeling.7 Therefore, Mandeville, Hume and Smith all agree that facts must be separated from values. This position is known as Hume’s law (which says prescriptions cannot be derived from descriptions), but it is characteristic of the theory of all three authors.8 This law strikes at the root of a claim to a science of Good and Evil; it is an impenetrable defense for freedom of conscience; and it is the basis of communal living for people of different philosophical and religious world-views. However, if the rules of morality ‘are not conclusions of our reason’,9 it remains to be seen where they come from. Here Mandeville, Hume and Smith point to the economic problem. Mandeville writes: I am willing to allow, that among the Motives, that prompt Man to enter into Society, there is a Desire which he has naturally after Company but he has it for his own Sake, in hopes of being the better for it; and he would never wish for either Company or any


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thing else, but for some Advantage or other he proposes to himself from it. What I deny is, that Man naturally has such a Desire, out of a Fondness to his Species, superior to what other animals have for theirs. It is a compliment which we commonly pay to ourselves.10 To clarify his idea, Mandeville adds that need ‘is the cement of civil society’,11 and society is ‘enterely built upon the Variety of our Wants, so the whole Superstructure is made up of the reciprocal Services, which Men do to each other’.12 Hume confirms all this: ‘the situation of external objects is their easy change, joined to their scarcity in comparison of the wants and desires of men’.13 And concludes that, if nature were not so stingy, namely if there were no scarcity of means, there would be no need for justice, because it would be replaced by ‘much nobler virtues’.14 Already in his Lectures, Smith asserts: ‘Nature produces for every animal thing that is sufficient to support it without having recourse to the improvement of the original production’.15 And yet ‘such is the delicacy of man alone, that no object is produced to his liking’,16 so that ‘to improve and multiply the materials which are the principal objects of our necessities gives occasion to all the variety of the arts’.17 This requires rapport with Others. Something must be here clarified. Man did not already have the natural gift of language and reason when he formed a relationship with his fellow man. This is the theory of the contractualists, but Mandeville, Hume and Smith proposed a different hypothesis. Mandeville writes: If we examine every Faculty and Qualification, from and for which we judge and pronounce Man to be a sociable Creature beyond other Animals, we shall find, that a very considerable, if not the greatest Part of the Attribute is acquired, and comes upon Multitudes, from their conversing with one another. Fabricando fabri fimus. Men become sociable, by living together in society.18 [And] it is hard to guess, what Man would be, entirely untaught.19 And Hume states:

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if it be found that nothing can be more simple and obvious than that rule; that every parent, in order to preserve peace among his children, must establish it; and that this first rudiments of justice must every day be improved, as the society enlarges: if all this appear evident, as it certainly must, we may conclude that it is utterly impossible for men to remain any considerable time in that savage condition which precedes society, but that his very first state and situation may justly be esteemed social.20 Moreover, he continues: ‘This state of nature, therefore, is to be regarded as a mere fiction, not unlike that of the golden age which poets have invented’.21 Smith’s position is not very different. He says: were it possible that a human creature could grow up to manhood in some solitary place, without any communication with his own species, he could no more think of his own character, of the propriety or demerit of his own sentiments and conduct, of the beauty or deformity of his own mind, than of the beauty or deformity of his own face. All these are objects which he cannot easily see, which naturally he does not look at, and with regard to which he is provided with no mirror which can present them to his view. Bring him into society, and he is immediately provided with the mirror which he wanted before.22 It follows that everything that is strictly human is the result of a relationship with the Other; it originates as a requirement of the relationship itself without previous planning. This happens because, when we have to obtain something from the Other, achieving our ends depends on the evaluation our counterpart makes of our conduct. This is why Mandeville mentions that ‘Men often will change their Resolution and act against their Inclination, that they may have the pleasure of continuing to appear in the opinion of Some, what they are conscious not to be in reality’.23 In other words, everyone tries to put himself in the Other’s place and judge himself as he would be judged by the Other. Hume explains this as follows: In general we may remark, that the minds of men are mirrors to one another, not only because they reflect each other’s emotions, but also because those rays of passions, sentiments, and opinions, may be often reverberated, and may decay away by insensible


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degrees. Thus the pleasure which a rich man receives from his possessions, being thrown upon the beholder, causes a pleasure and esteem; which sentiments again being perceived and sympathised with, increase the pleasure of the possessor, and, being once more reflected, become a new foundation for pleasure and esteem in the beholder.24 We ‘measure’ our conduct by the expectations and judgments of others. As Smith says, ‘we must become the impartial spectators of our own character and conduct. We must endeavour to view them with the eyes of other people, or as other people are likely to view them’.25 In this way ‘our continual observations upon the conduct of others, insensibly lead us to form to ourselves certain rules concerning what is fit and proper either to be done or to be avoided […]. It is thus that the general rules of morality are formed’.26 This has a series of consequences. First of all, the rules of morality, which ‘are not conclusions of our reason’, are a spontaneous product of social relationships. Our reason itself comes from this relationship. This means that, when man questions his condition, he is already a social being and, therefore, needs no special ‘contract’ to enter society. If, on the contrary, he has no language or reason, because he is not a social being, he is incapable of drawing up the political pact that generates society.27 In any case, politics does not produce social ties. It is, instead, economic need that gives rise to reciprocal satisfaction of wants through a process of cooperation, and creates the context that makes cooperation possible. In the words of Smith, the problem is: ‘give me what I want, and you shall have what you want’.28 For this to happen, everyone’s actions must have two parts: one to satisfy the objectives of the actor; and the other to satisfy the needs of those we ask to collaborate with us. If so, cooperation is possible, because the conditions for exchange are inherent in this division, even without any specific will or intervention.29 Consequently, the discovery of the social process by Mandeville, Hume and Smith, enables us to overcome the presumption that considered the laws of living together a conscious product of man. These rules are a ‘spontaneous secretion’ of the relationship between people.30 Hence, they are the ‘result of human action, but not the execution of any human design’.31 Since they originate alongside what we seek intentionally, they are correlative to the needs we try to satisfy through our actions. If our needs or the way we satisfy them change, the rules also change. Social norms are not an Absolute; they are

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relative and provisory products of the social process, which is an inexhaustible source of innovation. Therefore, Mandeville, Hume and Smith were ‘Darwinians before Darwin’.32 They reasoned in terms of the superiority of those rules which could most effectively and appropriately satisfy the needs of communal life. They realised the limits of individual knowledge and the necessity to rely on a procedure that is open to contributions from everyone and generates only provisory solutions. This is the death of the ‘privileged point of view on the world’, of its arrogance, and its immutability.33 The question of economic value If moral norms are the product of the social process, economic values should be so too. If the rules of communal living are the result of an aggregation of individual expectations, needs and preferences, which are de-personalized during the social process and become ‘impartial spectator’, economic value must also be the result of this process. It is not by chance that Hume states: ‘A man’s property is some object related to him. This relation is not natural, but moral’.34 Thus, Smith could have given a very clear response to the problem of economic value. And yet, in the Wealth of Nations, Smith refers many times to labor as ‘the real measure of the exchangeable value of all commodities’;35 and maintains: ‘in that original state of things, which precedes both the appropriation of land and the accumulation of stock, the whole product of labour belongs to the labourer’.36 We have here the theory of labor-value, which is an essentialistic construction, based on the belief that there is a substance (labor) that can give value to things and that this value would exist apart from individual preferences and aggregations of preferences through the social process. Such a theory is compatible with Locke’s theory of knowledge and natural law; and in fact Locke supports it.37 But this is not compatible with renunciation of the ‘privileged point of view on the world’ advanced by Mandeville, Hume and Smith and with the discovery of the social process. Friedrich von Wieser’s thoughts on the subject help to clarify the question. In an obituary for Carl Menger, written in 1923, he states: The classical economists observed economic world from above, from the idea of freedom, which was for them above everything


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else; so that they represented economic world itself as the natural place of freedom. Since the public they addressed was, like them, in perfect agreement with the idea of freedom, nobody actually cared that […] their line of reasoning was often inconsistent. In contrast to the XVIII century, we are living in a time committed to the greatest expansion of freedom […] and therefore very critical of it. The undisputed prestige that Adam Smith continued to enjoy can be explained […] by the fact that, whenever his thought was in conflict with experience, he overlooked the logical contradiction facing him and he grasped a new concept more in keeping with experience. On the other hand, Ricardo, desiring to be consistent to the very end, always found himself contradicted by the facts.38 Wieser recognizes there is a question, but he cannot get to the bottom of it. It is not true that Smith, ‘whenever his thought was in conflict with experience, overlooked the logical contradiction facing him and he grasped a new concept’. The remnants of natural law, which emerge in the Wealth of Nations, especially where Smith deals with the theory of value, survive in him. And yet this does not make us forget, as Leslie Stephen stresses, that Smith’s theory is primarily a ‘theory of the market’ and Ricardo’s is a theory of ‘distribution’.39 To understand this, one need only recall that Smith’s point of departure is the idea of scarcity or read excerpts like the following: Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it. But in the mercantile system, the interest of the consumer is almost constantly sacrificed to that of the producer […]. In the restraints upon the importation of all foreign commodities which can come into competition with those of our own growth, or manufacture, the interest of the home-consumer is evidently sacrificed to that of the producer. It is altogether for the benefit of the latter, that the former is obliged to pay that enhancement of price which this monopoly almost always occasions.40 The alternative is either to keep the bath water and throw out the baby or throw out only the bath water and keep the baby. In the former

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case, Smith is the stool Ricardo stands on to make the greatness of Marx possible.41 In the latter case, as we shall see more clearly in the following paragraphs, he is the one who formulated the theory of the ‘Great Society’ that was lacking in Athens and Rome. If we follow this second path, the expression ‘classical economies’ becomes misleading, because it is methodologically impossible to keep together the evolutionism of Mandeville, Hume and Smith with the philosophical radicalism of Bentham, James Mill, Ricardo and John Stuart Mill. We should not forget that Marx was the first to speak about ‘classical economists’ in reference to Ricardo, James Mill and their predecessors.42 This was not by chance. It was essential to Marx’s political project to present the entire economy as a ‘theory of distribution’. And consequently any other tradition or possible interpretation had to be ‘obscured’. This is especially so in regard to a merely evolutionist theory (based on the lack or inadequacy of human knowledge), which is an insuperable obstacle to establishing the ‘privileged point of view on the world’ and to its psychologistic projections on human destiny.43 Nevertheless, it is still useful to try to clarify the question. As we know, Smith had been a student of Francis Hutcheson,44 who had tried to explain value on the basis of the ‘fitness in the things to yield some use or pleasure in life’ as well as on the basis of ‘demand’. 45 When Smith’s Lectures was published, Cannan correctly pointed out Hutcheson’s debt to Pufendorf.46 First of all, Pufendorf says that foundation of price is the fitness in things to satisfy needs, which makes them ‘capable of having a value’.47 But he adds, citing Grotius, that ‘want is the most natural measure of the Price of things’;48 and, furthermore, he asserts that ‘the want of the buyer raises the Price’.49 We have here two theories of value. The first is an essentialist one. It attributes to things a ‘fitness’ pre-existent to the judgment of the actor and the response of the social process: this leads directly to the laborvalue theory.50 The second theory is a subjectivist one. It is based on the evaluation of scarcity by the subject, who acts in relationship to others and gives his evaluation to the social process. It is important here to point out that the theory entrusting the last response on value to the market process had been put forward by the late Spanish Scholastics, who were faced with economic development and a need to defend themselves against monarchic interventionism. If the price is an ‘aestimatio a communitatibus civilibus facta


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communiter’, it is the ‘right price’ and leads to ‘commutative justice’.51 Grotius and Pufendorf were anti-mercantilists. Therefore, they became ‘Protestant Scholastics’.52 In other words, they accepted the economic theories of the Scholastics in order to defend the economic mechanism from state interference. They opposed a ‘legal price’, handed down by the administrative authorities, in favor of a ‘natural price’ determined ‘by the common judgement and estimate of men’;53 in other words, established by the evaluation of the participants to the social process. This was the heredity Smith worked with. The subjectivist theory of value combines perfectly with the discovery of the social process made by him, Mandeville and Hume. The essentialist theory is correlative to the idea of a ‘privileged point of view on the world’ and to the ‘science of immutable’. The former is a crucial contribution to understanding social phenomena. The latter is the legacy of the reaction to the appearance of the market in Athens, and it has been used against the market and the ‘Great Society’ in the last two centuries. It should be mentioned, although it will be clarified in the last section of this chapter, that ‘right price’, as a product of a particular market habitat, undermines the idea of a ‘supreme good’, seen as an objective with specific existential content and replaces it with a ‘common good’, seen as a set of conditions that allow for greater mobilization of resources, abilities and individual knowledge, because it guarantees everyone freedom of choice.54 Ignorance, fallibility and the study of ‘latent functions’ If we accept the fact that essentialism has nothing to do with what is still alive in Smith today, it is easy to see how he not only denied that there could be a science of Good and Evil, but was always a tireless critic of human presumption. In a little-read section of the Wealth of Nations, Smith declares: The over-weening conceit which the greater part of men have of their own abilities, is an ancient evil remarked by the philosophers and moralists of all ages. Their absurd presumption in their own good fortune, has been less taken notice of. It is, however, if possible, still more universal. There is no man living who, when in tolerable health and spirits, has not same share of it.55

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Smith’s condemnation of man’s great presumption is not surprising. Anyone who understands, as Smith did, that the major institutions underlying our life are produced unintentionally, immediately realizes how vainglorious human life is. Smith writes: ‘I have never known much good done by those who affected to trade for the publick good’;56 and he openly expresses distrust toward that ‘insidious and crafty animal, vulgarly called a statesman or politician’.57 Unlike for Plato and Aristotle, for Smith politics is not the ‘architectural science’ of an intentionally constructed order. His model is Solon, whose behavior he considers a model of balance: ‘When he cannot establish the best system of laws’, Solon limited himself to introducing the best that the Athenians ‘can bear’.58 The fact is that, when it is not possible to ‘establish the right’, we can only ‘ameliorate the wrong’.59 However, this is the road taken by those who know how to ward off intellectualistic hubris, but not by the ‘man of system’, the bearer of the ‘architectural science’. Such a man is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arrange the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.60 The ‘man of system’ does not realize that any individual […] can, in his local situation, judge much better than any statesman or lawgiver can do for him.61 [And] the statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to a single person, but to no council or senate whatever, and which would


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nowhere be so dangerous as in the hands of a man who had folly presumption enough to fancy himself fit to exercise it.62 Therefore, the knowledge we have is dispersed throughout society. This is an irreparable blow to centralization and the idea of an authority that, presuming to be more ‘enlightened’ in its management of economic activity, in the end holds a monopoly on accepted knowledge, resources and political power. In the following section, we shall see how to respond to the ‘presumption’ of the ‘man of system’ and to the ascertained dispersion of knowledge. Here it should be mentioned that Edmund Burke paid particular attention to these themes. Even before the appearance of Smith’s Moral Sentiments, in 1756 Burke had published, obviously under the influence of Hume, A Philosophical Inquiry into the Origin of Our Ideas of the Sublime and the Beautiful, where he states: ‘sympathy must be considered as a sort of substitution, by which we are put into the place of another man, and affected in many respects as he is affected’.63 Through Hume, Burke realized that the norms we refer to are a product of the social process. Consequently, it is not surprising that Burke denounced intellectualistic hubris and later, following Smith, emphasized the problem of the dispersion of knowledge.64 Burke writes: We are afraid to put men to live and trade each on his own private stock of reason; because we suspect that this stock in each man is small, and that the individuals would be better to avail themselves of the general bank and capital of nations and ages. Many of our men of speculation, instead of exploding general prejudices, employ their sagacity to discover the latent wisdom which prevails in them.65 Breaking away from the historical process, which is a by-product of the social process, is equivalent to entrusting oneself to ‘personal selfsufficiency and arrogance’, ‘the certain attendants upon those who have never experienced a wisdom greater than their own’.66 To solve problems there must be ‘the aid of more minds’67 so, Burke continues, ‘I cannot conceive how any man can have brought himself to that pitch of presumption, to consider his country as nothing but carte blanche upon which he may scribble whatever he pleases’.68 The fact is that.

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Though you were to join in the commission all the directors of the […] academies to the directors of the Caisse d’Escompte, one old experienced peasant is worth them all. I have got more information, upon a curious and interesting branch of husbandry, in one short conversation with a Carthusian monk, than I have derived from all the Bank directors that I have ever conversed with.69 Therefore, we should act ‘under a strong impression of the ignorance and fallibility of mankind’.70 We are ignorant. Judged individually, we know very little; knowledge is spread throughout a society. And, with what little we know individually, we should not become presumptuous because, in any case, knowledge is fallible.71 The positions of Burke and Smith coincide perfectly. We need only cite Burke, when he says that ‘many of our men of speculation, instead of exploding general prejudices, employ their sagacity to discover the latent wisdom which prevails in them’, to give this agreement broader theoretical extension. Burke asserts that norms and social institutions have ‘latent wisdom’: they have a meaning or a function that we do not know, and it is proper to use our ‘wisdom’ to understand that meaning or function. The question is why the significance of norms and social institutions is hidden. The answer is that for the most part they do not originate in conscious planning but as an unintentional outcome of the social process, of individual actions intended for other purposes. We only know the purpose of our actions, but the actions create and activate norms used to gain our ends and those of others. From our limited ‘prospective’ we cannot discern the ‘function’ of the norm. We have to combine the ‘prospective’ of Ego with that of Alter and try to understand what, other than our intentions, the social process has responded and responds to. If social reality were a Platonic ‘copy’ of our psychologistic projections, we would not need to make any inquiries. Since it is not and since it is an unintentional product, we do not have a ‘manifest truth’ and must use our ‘wisdom’ to account for the social world that our actions ‘secrete’ without our awareness. In the first section of this chapter, we have pointed out that the birth of the social sciences was a consequence of the fall of the doctrine according to which ‘truth is manifest’. Burke, who attributes the production of the principal norms and institutions to the social process, stresses that, because we have not created them intentionally, we must


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devote ourselves to studying them and investigating their ‘latent function’.72 This makes his convergence with Smith (and Hume) even more profound.

Liberty as the habitat of development The task of the social sciences, therefore, is to study the unintentional outcomes of intentional human actions.73 The unplanned consequences may be positive or negative. By studying the unintentional consequences produced by intentional human actions, the social sciences try to identify the conditions that make certain events possible (when they are positive and desirable) or impossible (when they are negative and undesirable). What then is our major problem? Our ignorance and our fallibility. And what is the possible solution? To stop claiming that there can be any privileged source of knowledge and to start a process that is continually open and can mobilize the largest possible quantity of knowledge. How is this to be done? As we have already indicated in the second chapter, economic liberty and political liberty act as a ‘latent function’ to permit that mobilization. Therefore, it is true—as William W.Bartley III points out—that Smith’s economic work is permanently directed toward throwing light on the ‘development of the wealth of nations and […on] the reasons why some nations become richer than others and […on] the factors which determine phases of expansion or stagnation in the production of wealth’.74 In other words, Smith’s aim is to determine the conditions that make economic development possible or impossible. According to him, increase in wealth depends on mobilization of the knowledge dispersed throughout the society. Mercantilism considered political power a source of superior knowledge. It assigned it the rank of independent variable and favored monopolies and state protection. In the wake of Mandeville and Hume, Smith eradicates the idea of the privileged source of knowledge and invalidates the primacy of political power. He fills the void this creates with the social process, which mobilizes dispersed knowledge.75 Hume points out that, when decisions are made by only one person or by a limited group, the ‘least failure’ produces ‘inevitable ruin and misery’.76 He also says that, when there is ‘mutual succor, we are less exposed to fortune and accidents’ and that, ‘by this additional force, ability, and security’, ‘society becomes advantageous’.77 Ferguson, in a work much later

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than Wealth of Nations, writes: ‘Wherever men are free to think and to act, errors will be incurred, and wrongs will be committed: but the error that results from the freedom of one person is best corrected by the concurring freedom of many’.78 Ferguson associated discretionary power, arbitrary actions and all difficulties in correcting errors with the existence of a ‘supreme legislature’.79 Therefore, it is clear, as Forbes correctly emphasized, that the destruction of the omniscient legislator myth is the ‘most original and daring coup of the social science of the Scottish Enlightenment’.80 Perhaps it can be said that Smith plays the same role in economics and social sciences as Socrates did in philosophy. Both start with the idea of ‘not knowing’. One affirms the need for critical discussion and the other the mobilization of the knowledge dispersed throughout the society. The aim of one was the growth of rationality; the other also thought about the growth of knowledge, but as a presupposition of economic development. What conditions foster the growth of rationality and economic development? To answer this question one must understand the ‘science of a legislator’.81 The legislator must know that the spirit of system commonly takes the direction of that gentle public spirit; always animates it, and often inflames it even to the madness of fanaticism. The leaders of the discontented party seldom fail to hold out some plausible plan of reformation which, they pretend, will not only remove the inconveniences and distresses. They often propose, upon this account, to newmodel the constitution, and to alter, in some of its most essential parts, that system of government under which the subjects of a great empire have enjoyed, perhaps, peace, security, and even glory, during the course of several centuries together. The great body of the party are commonly intoxicated with the imaginary beauty of this ideal system, of which they have no experience, but which has been represented to them in all the most dazzling colours in which the eloquence of their leaders could paint it. Those leaders themselves, though they originally may have meant nothing but their own aggrandisement, become many of them in time the dupes of their own sophistry, and are as eager for this great reformation as the weakest and foolishest of their followers. Even though the leaders should have preserved their own heads, as indeed they commonly do, free from this fanaticism, yet they dare not always disappoint the expectations


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of their followers; but are often obliged, though contrary to their principle and their conscience, to act as if they were under the common delusion.82 It is obvious that ‘some general, and even systematical, idea of the perfection of policy and law may no doubt be necessary’.83 But to insist upon establishing, and upon establishing all at once, and in spite of all opposition, every thing which that idea may seem to require, must often be the highest degree of arrogance. It is to erect his own judgement into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the commonwealth, and that his fellow-citizens should accommodate themselves to him and not he to them. It is upon this account, that all political speculators, sovereign princes are by far the most dangerous. This arrogance is perfectly familiar to them. They entertain no doubt of the immense superiority of their own judgement. When such imperial and royal reformers, therefore, condescend to contemplate the constitution of the country which is committed to their government, they seldom see any thing so wrong in it as the obstructions which it may sometimes oppose to the execution of their own will.84 Consequently, ‘the science of a legislator’ is not an ‘architectonic science’. Its subject are those ‘general principles which are always the same’. 85 This means it must be concerned with abstract general norms, which have no specific content and are valid for everyone. In other words, they must be simple procedural rules, with no prescriptions that impose existential content on the life of the citizens. Law and custom are completely separate. In Sparta the law dictated the custom. As we know, ‘among the Spartans, Therpandrus could not add a string to his lyre without causing offence to the ephors’; and even sexual relationships were regulated. However, if we do not have a science of Good and Evil, if we also know that morality is not a conscious creation of our reason, and if we take into consideration the dispersion of our knowledge, the task of the legislator can only be to determine the norms that set the boundaries between the actions of one with those of the others. This permits each one freedom of choice and mobilization of all our knowledge, though it is partial and fallible, in response to problems that arise from our economic condition.

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The next step is a logical consequence. Safeguarding freedom of choice prevents the legislator from prescribing obligatory existential content. In order to draw the boundaries among various actions, he can yet indicate what the actors cannot do. In fact, Smith states: Proper resentment for injustice attempted, or actually committed, is the only motive which, in the eyes of the impartial spectator, can justify our hurting or disturbing in any respect the happiness of our neighbour. To do so from any other motive is itself a violation of the laws of justice, which force ought to be employed either to restrain or to punish. The wisdom of every state or commonwealth endeavours, as well as it can, to employ the force of the society to restrain those who are subject to its authority from hurting or disturbing the happiness of another.86 From this we find, to use the words of John Millar, that ‘justice require no more than that I should abstain from hurting my neighbour, in his person, his property, or his reputation; that I should pay my debts, or perform the services, which by my contracts, or by the course of my behaviour, I have given him reason to expect from me’.87 In this way, Millar continues, the ‘line of duty suggested by this mere negative virtue, can be clearly marked, and its boundaries distinctly ascertained’.88 As things stand, equality before the law consists of equal protection in the sphere of individual autonomy, and liberty correctly assumes its juridical nature. This is why Ferguson says: Liberty or freedom is not, as the origin of the name may seem to imply, an exemption from all restraint, but rather the most effectual application of every just restraint to all the member of a free state, whether they be magistrates or subjects. It is under a just restraint only that every person is safe, and cannot be invaded, either in the freedom of his person, his property, or innocent action. If any one were unrestrained, and might do what he pleased, to the same extent also every one else must be exposed to suffer whatever the free man of this description were inclined to inflict’.89 In other words, liberty is a juridical concept. It is the idea that the legislator must not prescribe what citizens must do, but limit himself to establishing what they must not do. In such a way, there are well


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defined boundaries between their actions.90 And it follows from this that liberty and justice become inseparable: without justice liberty turns into chaos and justice without liberty is merely the arbitrary, coercive order of whoever is in power. Furthermore, abstract general norms make mobilization of knowledge possible, but this mobilization must be motivated by private property. Smith does not hesitate to write: ‘The attention of the sovereign can be at best but a very general and vague consideration of what is likely to contribute to the better cultivation of the greater part of his dominions. The attention of the landlord is a particular and minute consideration of what is likely to be the most advantageous application of every inch of ground upon his estate’.91 And Ferguson will say: ‘The trader, no doubt, may err in the pursuit of his gain; but the principle from which he acts is so sensible to the experience of profit or loss, that the lessons of experience seldom need to be repeated’.92 Therefore, the abstract general norms that permit mobilization of knowledge must also guarantee the security of private property,93 because the latter furnishes the motivation for the former.94 If this normative habitat exists, then each one, pursuing his own objectives, is ‘led by an invisible hand to promote an end which was no part of his intention […]. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it’.95 This means that the normative habitat, which permits free mobilization of knowledge and resources, fosters a social process that improves the conditions of the citizens. Hence, the ‘common good’ is not a particular objective to be achieved, but the conditions that guarantee that process.96 Consequently, if one understands just how deceptive it is to believe in a privileged source of knowledge and realizes that the only guarantee is to provide a normative habitat that fosters a process always open to exploration of the unknown and correction of errors, one need no longer ask ‘who should rule?’ but should choose to fight for the adoption of that habitat. This is why Mandeville peremptorily states: we must become aware that what we wish to ascribe to the Virtue and Honesty of Ministers, is wholly due to their strict Regulations […] a Nation ought never to trust to any Honesty, but what is built upon Necessity; for unhappy is the people, and their Constitution will be very precarious, whose

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welfare must depend upon the Virtues and Consciences of Ministers and Politicians and not upon respect for the law.97 And Hume says: Political writers have established it as a maxim that, in contriving any system of government, and fixing the several checks and controls of the constitution, every man ought to be supposed a knave, and to have no other end, in all his actions, than private interest. By this interest we must govern him.98 The origins of modern capitalism Determination of the normative habitat that makes development possible is not the only contribution of the Scottish moralists. They also offered an explanation of how this habitat was formed. Smith calls attention to ‘feudal anarchy’,99 the feudal situation where there was no central power that could subordinate all of society to itself. Smith makes the following diagnosis: The introduction of the feudal law, so far from extending, may be regarded as an attempt to moderate the authority of the great allodial lords. It established a regular subordination, accompanied with a long train of services and duties, from the king down to the smallest proprietor […and yet,] after the institution of feudal subordination, the king was as incapable of restraining the violence of the great lords as before. They still continued to make war according to their own discretion, almost continually upon one another, and very frequently upon the king; and the open country still continued to be a scene of violence, rapine and disorder.100 It is not surprising that such a precarious situation produced results different from those planned by the parties involved. Opposition of the great feudal lords to the crown brought unexpected results. As Ferguson correctly says, ‘the Barons of England, in times of high feudal aristocracy, knew not that the charters which they extorted from their sovereign, were to become foundations of freedom to the people over whom they themselves wished to tyrannize’.101 Ferguson’s words immediately bring to mind the rise of the ‘free town’ and the growth of the city. Apropos of the cities, Smith writes:


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They became […] so considerable that the sovereign could impose no tax upon them […]. They were, therefore, called upon to send deputies to the general assembly of the states of the kingdom, where they might join with the clergy and the barons in granting, upon urgent occasions, some extraordinary aid to the king. Being generally too more favourable to his power, their deputies seem, sometimes, to have been employed by him as a counterbalance in those assemblies to the authority of the great lords. Hence the origin of the representation of burghs in the states general of all the great monarchies in Europe.102 This suggests that the different situation of the inhabitants of the cities and those of the countryside should be pointed out: Order and good government, and along with them the liberty and security of individuals, were in this manner, established in cities at a time when the occupiers of land in the country were exposed to every sort of violence. But men in this defenceless state naturally content themselves with their necessary subsistence; because to acquire more might only tempt the injustice of their oppressors. On the contrary, when they are secure of enjoying the fruits of their industry, they naturally exert it to better their condition, and to acquire not only the necessaries, but the conveniences and the elegancies of life.103 Therefore, in the city certainty of the law created the habitat for development. ‘That industry […] which aims at something more than necessary subsistence, was established in cities long before it was commonly practised by the occupiers of land in the country’. 104 Moreover, ‘if in the hands of a poor cultivator, oppressed with the servitude of villanage, some little stock should accumulate, he would naturally conceal it with great care from his master, to whom it would otherwise have belonged, and take the first opportunity of running away to a town’, 105 since ‘the law was at that time so indulgent to the inhabitants of towns, and so desiderous of diminishing the authority of the lords over those of the country, that if he could conceal himself there from the pursuit of his lord for a year, he was free for ever’.106 Smith’s comment is: ‘Whatever stock, therefore, accumulated in the hands of the industrious part of the inhabitants of the country, naturally took refuge in cities, as the only sanctuaries in which it

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could be secure to the person that acquired it’. 107 Thus, the city became the ‘sanctuary’ of capital. The conditions for development were created in the city. And ‘what all the violence of the feudal institutions could never have effected, the silent and insensible operation of foreign commerce and manufactures gradually brought about’.108 However, there is another point that must be emphasized. Foreign commerce and manufactures ‘gradually furnished the great proprietors with something for which they could exchange the whole surplus produce of their lands’.109 This led to the extension of the normative habitat of the city to the countryside. In fact, When the great proprietors of land spend their rents in maintaining their tenants and retainers, each of them maintains entirely all his tenants and all his retainers. But when they spend them in maintaining tradesmen and artificers, they may, all of them taken together, perhaps, maintain as great, or, on account of the waste which attends rustick hospitality, a greater number of people than before.110 The most relevant fact here is the result: The tenants having in this manner independent, and the retainers being dismissed, the great proprietors were no longer capable of interrupting the regular execution of justice, or of disturbing the peace of the country […]. A regular government was established in the country as well as in the city, nobody having sufficient power to disturb its operations in the one, any more than in the other.111 In keeping with his paradigm of a social science, whose task is to study the unintentional consequences of intentional human actions, Smith concludes: A revolution of the greatest importance to the publick happiness, was in this manner brought about by two different orders of people, who had not the least intention to serve the publick […]. Neither of them had either knowledge or foresight of that great revolution which […] was gradually bringing about.112 Later on, John Millar was to write:


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Whoever inquires into the circumstances in which these great charters were procured, and into the general state of the country at that time, will easily see that the parties concerned in them were not actuated by the most liberal principles; and it was not so much their intention to secure the liberties of the people at large, as to establish the privileges of a few individuals. A great tyrant on the one side, and a set of petty tyrants on the other, seem to have divided the kingdom; and the great body of the people, disregarded and oppressed on all hands, were beholden for any privileges bestowed upon them […]. But though the freedom of the common people was not intended in those charters, it was eventually secured to them; for when the peasantry, and other persons of low rank, were afterwards enabled, by their industry, and by the progress of arts, to emerge from the inferior and servile condition, and to acquire opulence, they were gradually admitted to the exercise of the same privileges which had been claimed by men of independent fortunes; and found themselves entitled, of course, to the benefit of that free government which was already established. The limitations of arbitrary power, which had been calculated chiefly to promote the interest of the nobles, were thus, by a change of circumstances, rendered equally advantageous to the whole community as if they had originally proceeded from the most exalted spirit of patriotism.113 From all this we understand how superficial it is to consider the Industrial Revolution the premise for capitalism. Things are different. It was the affirmation of the market society (with its normative habitat) that permitted what we usually call the ‘Industrial Revolution’, namely, the growth of science and technology.114 Once again Smith suggests: Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, in which the people do not feel themselves secure in the possession of their property, in which the faith in the contracts is not supported by law, and in which the authority of the state is not supposed to be regularly employed in enforcing the payment of debts from all those who are able to pay.115 And when this normative habitat is extended to many countries or is globalized, the economic operator ‘is not necessarily the citizen of any

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particular country. It is in a great measure indifferent to him from what place he carries on his trade; and a very trifling disgust will make him remove his capital, and together with it all the industry which it supports, from one country to another’.116

6 Austrian marginalism The limits of knowledge and society as a spontaneous order

Carl Menger and Adam Smith In the Austrian School of Economics, Friedrich A.von Hayek was a representative of the fourth generation and the one who brought that ‘tradition of research’ to its highest level. He maintained that Carl Menger, founder of Austrian marginalism, ‘was among the first in modern times consciously to revive the methodical individualism of Adam Smith and his school’.1 Probably, Menger would not have agreed with Hayek. And some careless commentator might have added that Hayek goes too far. But this is not so. True, Menger did not hesitate to write that Adam Smith ‘and his school predominantly strive for the pragmatic [intentional] understanding of economy, even where such understanding is not adequate for the objective state of affairs’, so that ‘the result is that the broad realm of unintentionally created social structures remains closed to their theoretical comprehension’.2 It is also true that Menger himself observed that ‘this one-sidedness and these defects in the view of problems of economic policy on the part of A.Smith and his followers offered enough points of attack for a scientific reaction’.3 However, the fact that he associated that ‘reaction’ to the name of Edmund Burke shows that Menger misunderstood Smith. For the founder of the Austrian school, Burke was probably the first, who, trained for it by the spirit of English jurisprudence, emphasized with full awareness the significance of the organic structures of social life and the partly unintended origin of these.4 Menger also adds: 99

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He taught most convincingly that numerous institutions of his country, which were to a high degree of common benefit and filled every Briton with pride, were not the result of positive legislation or of the conscious common will of society directed toward establishing this, but the unintended result of historical development. He first taught that […] what had developed historically, was again to be respected […]. Herewith he made the first breach in the one-sided rationalism and pragmatism of the Anglo-French Age of Enlightenment.5 Menger also throws light on the connection between Burke’s ‘views’ and Savigny’s and Niebuhr’s ‘historical studies for the understanding of law’. 6 And yet, though that connection is correct, 7 Menger overlooks the influence (pointed out in the previous chapter) of Hume and Smith on Burke, who at first saw the social process through the direct influence of Hume and later saw man as an ignorant and fallible being by borrowing Smith’s idea of the dispersion of knowledge. Nevertheless, when Hayek says that Menger was among the first ‘to revive the methodical individualism of Adam Smith’, his judgment is completely pertinent. In fact, both Smith and Menger maintained that individual action produces unintentional outcomes and that the major social institutions (language, family, law, division of labor, market, money, city, state) are the unplanned result of human actions, which simultaneously carry out ‘manifest functions’ or serve to reach the actor’s intentional objectives. The fact is that Menger worked with insufficient information; and since he did not have in mind Burke’s debt to Smith, he placed Smith within the hyperrationalistic tradition of Bentham, James Mill, Ricardo and John Stuart Mill. If Menger had managed to see Smith as one of the principal discoverers of the social process, this would not have happened. Smith’s ‘concessions’ to the theory of labor-value would also have been seen in another light. They would have been considered a natural-law survival, incompatible with Smith’s principal theories. It is even more important to note that Menger, backed up by Burke (and thus Mandeville, Hume and Smith) and Savigny,8 formulated his theories using the figure of an ignorant and fallible human being. As William Jaffé says, homo mengerianus is not a ‘lightning calculator’; he is an ‘ill-informed creature, plagued with uncertainty, forever hovering between alluring hopes and haunting fears, and congenitally incapable


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of making finely calibrated decisions in pursuit of satisfactions’.9 Ignorance and fallibility are anthropological traits, which are impossible to cast off. Menger and the subjectivist theory of value To determine what theoretical questions Menger tried to answer, we must place him in his cultural context. On the one hand, there was the Anglo-Saxon tradition, which was captive to the theory that says the value of goods comes from the cost of production (the labor-value theory is merely one of its expressions). On the other hand, there was the German Historical School of Economics, which was victim of the reification that considered society a whole, a completely autonomous subject in respect to the social actors. The former tradition wanted to be individualistic, but was not successful because it lacked an individualistic theory of value. The latter had a subjectivist theory of value, but it was curbed by its collectivism. As Karl Milford correctly writes, ‘in the economists of the German historical school, the theory of subjective judgements has no methodological significance, because it includes methodological essentialism: it could be said blind’; in the strictly Ricardian economists, ‘the individualistic principle is insignificant methodologically, because it includes a theory of objective judgements, i.e., that principle is empty’.10 It would have been necessary, therefore, to connect value to man and his actions and no longer consider it a ‘fitness’ of goods that is independent of what men want and what they feel they need. It would have been necessary to show that, precisely because it is men who act, there is no social reality distinct from that of interpersonal cooperation. Menger showed this. He revived the subjective theory of value. In two very long notes that appear in his Grundsätze, Menger traces the significant stages of that theory from Aristotle to Schäffle.11 He cites a long passage from Aristotle which contains the following useful quotation: ‘for if men did not need one another’s goods at all, or did not need them equally, there would be either no exchange or not the same exchange’.12 For Menger the origin of human action and social cooperation is scarcity.13 From here it is only a short step to the idea of ‘human life’ as a ‘process’.14 It is a process in which ‘man, with his needs and his command of the means to satisfy them, is himself the point at which human economic life both brings and ends’.15

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Menger explains his position in more detail. He states: the value of goods arises from their relationship to our needs, and is not inherent in the goods themselves. With changes in this relationship, value arises and disappears.16 In other words, From this it is evident that goods’ character is nothing inherent in the goods, but merely a relationship between certain things and men, the things obviously ceasing to be goods with the disappearance of this relationship.17 Consequently, value is a judgement economizing men make about the importance of the goods at their disposal for the maintenance of their lives and wellbeing. Hence value does not exist outside the consciousness of men. It is, therefore, also quite erroneous to call a good that has value to economizing individuals a ‘value’, or for economists to speak of ‘values’ as of independent real things, and to objectify value in this way’.18 Menger can now explain that exchange is determined by ‘the endeavor of men to satisfy their needs as completely as possible’.19 And he can show that it is an error to consider ‘the magnitude of price as the essential feature of an exchange’ and, ‘as a result of this mistake’, to regard ‘the quantities of goods in an exchange as equivalents’.20 ‘But equivalents of this sort are nowhere present in human economic life. If goods were equivalents in this sense, there would be no reason, market conditions remaining unchanged, why every exchange should not be capable of reversal’.21 This means that different evaluations of the goods exchanged are concealed behind the same price. Ego gives more importance to the good he receives than to the one he gives up; and Alter evaluates what he obtains from Ego higher than what he gives up. If this were not so, exchange would be impossible. Driven by their needs, men make demands. This leads to prices, which in this process are ‘only incidental manifestations’, ‘symptoms’ of the economic levelling ’between the economies of individuals’.22 Price is an unintentional consequence of intentional actions undertaken


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to satisfy our needs. Thus, price is freed from any essentialism. Aristotle did not manage to give the right dynamism to the relationship between use-value and exchange-value. In Smith values originate in the social process, but his theory does not include economic values (to which he applied the labor-value theory). Menger manages to give an answer that applies not only to the question of economic value, but also permits him to deal with the problem of method.

Against the German Historical School of Economics Even though they believed that personal evaluations were the basis of economic value, the representatives of the German Historical School of Economics refused to rely on the social process. They did this by adopting a clearly collectivist position. We have already seen how they reified society and granted it an existence separate from that of individual social actors. On the contrary, when Menger says that prices are derived from individual actions, he traces the phenomenon back to its elementary components. Thus, he avoids reifying the price, which is no longer something that can exist independently of the actions of someone; and these actions are the ‘smallest parts’ Aristotle spoke of.23 This is the same method that Menger himself would later call ‘compositive’ and is better known by the name of ‘methodological individualism’. 24 It demolishes the claim of the German Historical School of Economics to separate society from the action of individuals. This had already been made clear in Grundsätze, but Menger would have to devote essays of a methodological nature to the subject. Before dealing with the developments of Menger’s position, we must try to understand what it means to give society an autonomous existence in respect to the actions of individuals and see what the consequences are. Reifying society and refusing to have it coincide with individual actions, with the process they foster and with the results they produce, is the same as introducing the ‘privileged point of view on the world’. Consequently, there is a Truth that is not provided by the individual or by the social process. This means that the free exchange of social actors loses its legitimacy. In the Untersuchungen, Menger quotes this important passage from Hildebrand: ‘[…] quae est inde ab Adami Smithii aetate per Europan, divulgata doctrina, ea quidem haud immerito in reprehensionem incurrit propterea, quod solis suis

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quemque consulere rationibus jubet quodque, cum summan de lucro contendendi licentiam poscat, si ipsam constanter persequantur omnes, omnem tollat honestatem singulorumque in singulos excibet bellum necesse est’.25 Therefore, the individual and the social process must be controlled. Once again politics becomes an independent variable of the social system and its task is to give ‘morality’ to economic activity and the social life. The economic and other social subsystems that had been broken off from politics are once again absorbed by it. The immediate consequence of this is the disappearance of the theoretical social sciences, which, as we have shown in the previous chapter, originate when the free social process is discovered and the ‘privileged source’ of knowledge is renounced. This is exactly what the German Historical School of Economics does not want to do. It reintroduces the ‘privileged point of view on the world’ and every event must be related and subordinated to it. Hence, it declares that it is impossible to have theoretical social sciences, because they cannot grasp the ‘unique and unrepeatable’ and must be replaced by descriptive historical research. But the underlying reason for this view is that, in order to have social science, everyone must be considered at the same level of ignorance and fallibility. This is the exact opposite of what is maintained by the ‘privileged point of view on the world’. Under these circumstances, it is understandable why Menger considered the question of method the most urgent of his time.26 This moved him to make a direct attack against the ‘old’ (Roscher, Hildebrand and Knies) and the ‘young’ (Schmoller and his followers) German Historical School of Economics. Three points must be emphasized. First, if the historical school ‘refuses to analyze economic phenomena’, it ‘precludes theoretical understanding of these phenomena’.27 Consequently, ‘the description of concrete economic phenomena become the only legitimate objective of economic enquiry’.28 ‘This caused an enormous damage to our science, because the representatives of the German historical school neglected the fact that historical research can never replace theoretical research’.29 In the attempt to avoid the errors of aprioristic social philosophy and also those of social physics and social biology, the German school ‘only made the more serious mistake of renouncing analysis and thus theoretical understanding of social phenomena’.30 The fact is that ‘we understand phenomena by means of theories’.31 What seems to be


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‘unique and unrepeatable’ is only an example of a ‘general regularity’.32 Menger affirms the primacy of the theoretical moment in the construction of science. This position was later taken by BoehmBawerk and by Mises, who was to be involved more directly in prolonging the debate on methodology with the historical school. Boehm-Bawerk says that facts do not speak by themselves and that ‘what the outward eye cannot here unaided see, the mind must construct by a series of abstract speculations’.33 He adds that it is impossible to write ‘three pages on economic questions, even in the historical style, without general theory’; ‘and one can construct no general theory without the use of abstract deduction’.34 ‘It is absolutely impossible to make a report upon a question of economics, much less to discuss it, without touching upon general theoretical conceptions and propositions’.35 On his part, Mises asserts: Nothing is more clearly an inversion of the truth than the thesis of empiricism that theoretical propositions are arrived at through induction on the basis of a presuppositionless observation of ‘facts’. It is only with the aid of a theory that we can determine what the facts are. Even a complete stranger to scientific thinking, who naively believes in being nothing if not ‘practical’, has a definite theoretical conception of what he is doing. Without a ‘theory’ he could not speak about his action at all, he could not think about it, he could not even act.36 Furthermore: Theories about action are implicit in the very words we use in acting, and still more in those we use in speaking about action […]. The supporters of historicism were able to believe that facts can be understood without any theory only because they failed to recognize that a theory is already contained in the very linguistic terms involved in every act of thought. To apply language, with its words and concepts, to anything is at the same time to approach it with a theory.37 Second, Menger maintains that the historical school’s claim to have a global view, and thus to know phenomena ‘in the totality and the whole complexity of their nature’ is ‘not strictly feasible’.38 It is

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impossible to know the Whole. Science ‘cannot provide understanding of human phenomena in their totality […], but it can provide understanding of one of the most important sides of human life’.39 In other words: ‘we attain to a set of social theories, each of which, to be sure, reveals to us only the understanding of a particular side of the phenomena of human activity. Accordingly, each abstracts from full empirical reality’.40 Hence, knowledge is partial. We can ‘grasp’ only fragments of reality. That is why we must give up the pretence of knowing the totality and try to reduce social phenomena to their simplest elements.41 Mises says: ‘The whole remains ineffable because reason and language are unable to enter here’.42 Science ‘does not know how to find a bridge between sentience and motion or between consciousness and matter. What life and death are eludes its grasp’.43 It is ‘no part of the task of science to examine ultimate questions or to prescribe values and determine their order of rank’.44 Moreover, on a par with Menger, Mises asserts that knowledge, whether it be scientific or not, is always partial. The ‘maps’ we have do not coincide with the territory,45 because ‘our means of expression and of thought do not touch life in its fullness and wholeness’.46 Science in particular deals only with ‘isolated fragments detached from the living whole and thereby killed’.47 Hence, the knowledge it provides us with is always partial and, despite any of our claims, is also fallible: ‘a theory that does not appear to be contradicted by experience is by no means to be regarded as conclusively established’.48 Third, Menger’s response to the historical school, which presents society as a whole distinct from individuals and superior to them, is: ‘If national economy was considered as a special unit differing from the singular phenomena of human economy, one could easily draw the consequence that national features should be the exclusive object of scientific treatment in theoretical national economy, and that the singular phenomena of human economy should be excluded therefrom. Not the general nature of the phenomena of human economy, not their general relationships, were henceforth to be the object of research in the field of theoretical economics’.49 ‘The error of this doctrine is obvious’.50 The nation as such is not a large subject that has needs, that works, practices economy, and consumes; and what is called ‘national economy’ is therefore not the economy of a nation in the true sense of the word. ‘National economy’ is not a


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phenomenon analogous to the singular economics in the nation to which also the economy of finance belongs. It is in its most general form of phenomena a peculiar complication of singular economies which has been characterized by us more in detail in another place.51 Menger concludes his analysis showing that the position of the German Historical School of Economics is based on an attempt to affirm the ‘privileged point of view on the world’: Because several persons who have up to now been isolated economically and continue to pursue their individual economic aims and efforts start trafficking in goods with each other (and thus really only undertake to pursue their individual interests more suitably than before), their previous isolated economies do not change into one common economy, nor is a new one added to these […]. They do sacrifice their character as isolated economies but not their character as singular economies. The latter would be the case only if each economic subject gave up his individual economic aims and efforts, his economy, that is, and if the fullest possible satisfaction of the needs of all members of society were to become the common goal of all economic subjects.52 However, if individual subjects have to give up their own objectives and wait for the decisions of a central political authority, this becomes an affirmation of the ‘privileged point of view on the world’, living in symbiosis with the idea that society is a whole distinct from single individuals and thus commits a ‘flagrant error of duplication’ of reality.53 This is why Mises says that society is the name we give to the cooperation that takes place among human beings.54 In other words, order is endogenous to the system and not an exogenous imposition of those who hold the ‘privileged point of view on the world’.55 The social order is spontaneous and unintentional; it is not a product intentionally created by the hand of an omniscient legislator. And it is the presence of institutions that originate without previous planning that opens, as Menger says, a ‘vast realm of fruitful’, scientific ‘activity’.56 In dealing with the same subject, Hayek writes that ‘social theory begins with—and has an object only because of—the discovery that there exist orderly structures which are the product of the action

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of many men, but are not the result of human design’.57 Exactly as we have seen in the previous chapter, this means that the social sciences begin with the discovery of a process that is driven by intentional human actions but generates unintentional consequences. That is to say, the social sciences originate with the discovery of the social process and the renunciation of the ‘privileged point of view on the world’.58 The conflict between the ‘Austrian’ and Walrasian approaches The Truth of the German Historical School of Economics is based on a ‘privileged’ knowledge of Good and Evil. This means that the German Historical School of Economics claims to have an ethically superior point of view that embraces the whole and, therefore, must necessarily prevail over the partiality of every single discipline. Clearly behind such a view is the Hegelian concept of the state as the ‘actuality of the ethical Idea’.59 Menger does not overlook this; and when the same concept is presented under the modest guise of an ‘ethical orientation’ of the economy, he has no difficulty replying that it is ‘a vague postulate of research devoid of any deeper content’.60 Later on, Mises asserts that the representatives of the German Historical School of Economics described themselves as the ‘intellectual bodyguard’ of the Prussian monarchy, ‘firmly convinced’ that the ‘God-given leaders of the people were the dynasties, especially the Hohenzollern’.61 The German Historical School of Economics typifies romantic opposition to the advancement of the open society, not deceptively disguised by opposition to the market. However, threats to the open society also come from another source. By offering a solution to the problem of economic value, the ‘marginalist revolution’ should have at least redeemed economics from the ‘one-sided rationalism’ Menger erroneously also attributed to Adam Smith. Why? Since the origin of price is in the personal evaluations of each actor, it reflects preferences pre-existent to the rational moment; that is, preferences pre-exist the action undertaken to satisfy them. This means that there can be no Good and Evil that is rationally deduced. If we add to this that there are as many evaluations as there are men and that they change with the objectives each one determines for himself and continually reformulates, it is no longer valid to claim that integration of personal


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preferences can be entrusted to a ‘science of choice’ in the possession of and administered by a single mind. Menger was aware of all this. Just as he rejected the ‘ethical orientation’ of the German Historical School of Economics, he also rejected the idea that economics can claim to be an ‘architectonic science’ of society for any other reason. As is known, the ‘marginalist revolution’ is associated with Jevons and Walras as well as with Menger. Although they had different motivations, Jevons and Walras really thought they could make economics a science for ‘molding’ society. Jevons’ work is linked to Bentham’s and the utilitarian tradition. He says: ‘Pleasure and pain are undoubtedly the ultimate objects of the calculus of Economics. To satisfy our wants to the utmost with the least effort—to procure the greatest amount of what is desirable at the expense of the least that is undesirable—in other words, to maximize pleasure, is the problem of Economics’.62 Creating more confusion, he also asserts that ‘there may be motives of uprightness and honour that may’ suggest statesman to adopt measures of higher order.63 For his part, Walras sees in the social sciences ‘the mechanics of moral forces’.64 He specifies: the law of human activity will be scientifically established just as the law of the earth’s movement around the sun is by the explanation of its double abstract movement of circular rotation on its axis and elliptical movement around the sun. This shows the rational character of general kinetics and the analogy with the nature of physics.65 Furthermore, Walras opposes individualism;66 and maintains that ‘collective ownership’ is preferable to ‘private ownership’.67 Consequently, there is an evident ‘architectonic’ inspiration in Walras’s work, particularly that of Saint-Simon.68 Menger, who carried on a brief correspondence with Walras, makes ‘every effort’ to win him to his side,69 but with no success. Menger’s final judgment is as follows: ‘A conformity does not exist between us. There is an analogy of concepts in a few points but not in the decisive questions’.70 Menger was perfectly right. The subjectivist theory of value should have given greater force to the ideal of social process. However, Walras goes in exactly the opposite direction. He wants to substitute for the market a mathematical instrument, the theory of general economic equilibrium. According to this theory, a pre-determined

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optimum is reached. But the subjectivist basis of value shows that the social process mobilizes the knowledge of everyone and creates advantages that cannot be predetermined. The subjectivist basis of value suggests also that the advantages of exchange are not the maximum ones; they are only those which permit exchange and social cooperation.71 In typical models of general equilibrium, prices are unknown. In fact, In the typical models of general equilibrium, prices are initially unknown. And the theory serves precisely to calculate the prices required in order to attain the harmony of individual equilibria with the general equilibrium [so that] the final optimum condition (the Paretian optimum) is actually pre-arranged: one already knows where one wishes to arrive. Rationalism is teleological, reason knows a priori what the optimum is like, and it is a matter of persuading the maximizing individuals to go towards it simultaneously.72 Thus, it is not difficult for Menger to understand that ‘the one-sidedly rationalistic mania for innovation in the field of economy’, with the intentional ‘dissolution’ of the normative habitat that makes a market society possible, ‘inexorably leads to socialism’.73 If these statements are applied to the theory of general economic equilibrium, they might seem out of place, but they are not. This is clearly implied by the criticism of the idea of general equilibrium made by Hans Mayer, a student of Friedrich von Wieser. First of all, Mayer observes: ‘Recent literature has emphasized the fact that the elements of equilibrium do not and should not contain the variable of time, because the simultaneous interdependence of all the variables is implied’.74 Therefore, the system of equations ‘cannot describe the economic process as such’.75 To achieve or to sustain movement (economic cycle), there must be a free uncompensated force or a difference in potential continually reproduced among the various forces. There is nothing like this in a simultaneous system of interdependence of the theory of equilibrium. In this system, once the reciprocal and only the reciprocal movement of the elements ceases […]; in other words, when all the elements have found the position in which they maintain the equilibrium, no force would be free to break


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this state of rest […]. It is not possible to deduce from the system of general interdependence either the continually reproducing cycle of economy […], or an economic process that undergoes progressive or regressive variations.76 What happens? Mayer answers: There are two possible hypotheses. The first is that the force that keeps the system of equilibrium in continuous movement is endogenous. This might be, for example the periodical renewal of needs […]; but then the system of interdependence of all the elements would be shattered, because an element, that is active and not determined by reciprocity, would dominate the others. The second is that the force that keeps the system in continuous movement is exogenous. This shows that the pattern of equilibrium does not take into consideration the scientific principle, continually advocated by the representatives of the equilibrium theory, according to which the task of science should be ‘to describe as simply and completely as possible’ the facts observed […]. The description […] of equilibrium [is therefore] seriously lacking […]. The system would not be closed and, once again, the interdependence would be shattered.77 Moreover, the advocates of the theory of general economic equilibrium maintain that, since the number of equilibrium equations is the same as the number of unknowns, there is only one solution to the economic system, so that to a certain value of each element (price, demand, supply, production costs, etc.) there is always only a single corresponding value of the others’.78 Nevertheless, on the basis of facts and mathematical procedures, we find that, if given a certain starting point, there is not one but there are more, and perhaps many, equilibrium solutions’.79 Indeed, the fact that in any economy, when the combination of items by an economic subject (both in the simpler case of an isolated economy and in that of an economy in a price-oriented market) lacks strict univocal correspondence of the elements, there is a variety of possible correspondences (merely because most utility functions are discontinuous and there is not one but

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usually more, often many, equally optimal combinations of elements)’.80 The same conclusion is reached if the problem is approached from the strictly mathematical side. A single solution is possible […] only when all the equations are linear. But generally the equilibrium equations are not linear. The price equations contain the product of quantities exchanged times price (both unknown), which result in quadratic equations, and thus in four solutions for two equations with two unknowns; and in the general case of mn+n-1 equilibrium equations, there is an enormous indefinable number of equivalent mathematical solutions. In addition, there are imaginary solutions and those without any economic significance. Therefore, the solution to the problem is indeterminate and, in principle, indeterminable.81 There is more. In the theory of general equilibrium, ‘by definition, there is no profit’.82 Hence, even if we wanted for a moment to exclude the impossibility of substituting a system of equations for the extensive, complex market process, the fact remains that, since this system is indeterminate, an ‘exogenous’ variable must be introduced, which is the ‘privileged point of view on the world’, imposed by the political authority for planning.83 This explains why the Austrian school has always opposed the idea of making economics a discipline based on mathematics. Even though Menger was familiar with the mathematical methods, he expressed his opposition directly to Walras. Mises further says: Of primary importance is what is set forth in words in the preliminary statement that has to serve as the starting point for further mathematical elaboration. This statement, however, is non-mathematical. Whether or not its further elaboration in mathematical terms can be useful depends on the correctness of this non-mathematical statement.84 Consequently, what must be clear is that, behind the equations of general economic equilibrium, is the idea of economics as an ‘architectonic science’ of society.


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Ignorance and disequilibrium As we have seen, Mayer pointed out that, in the theory of general equilibrium, ‘by definition there is no profit’. This lead to a criticism of that theory no longer directed to its internal structure, but to its gnoseological assumptions. Menger acutely states: ‘The exchange of less easily saleable commodities for commodities of greater marketability is in the economic interest of every economizing individual. But the actual performance of exchange operations of this kind presupposes a knowledge of their interest on the part of economizing individuals.85 What really happens is that, due to the ignorance of the actors, the system is always in disequilibrium. It is impossible and irrelevant to know what Menger had in mind when he wrote that passage. What does count is that it strikes at the root of all systems of planning and also at the theory of general economic equilibrium. In fact, it shed light on the ignorance of all social actors. The little knowledge each one has is not enough to pursue his personal interests perfectly. And, all the more reason, this prevents each one from being able, individually, to deal with the entire economic problem of society. Boehm-Bawerk said that only where there are ‘infinite grounds for contrasting valuations’ are there ‘infinite opportunities for exchange’.86 This is due not only to the division of labor but also to the effect of different knowledge.87 In any case, if men were all perfectly equal and had equal ability, knowledge and skills, there would be no change ‘to disturb the balance’.88 By proposing to show how value ‘would exist’ in a ‘perfect state’, 89 Wieser throws light on how the exchange value is ‘disturbed‘ by, among other things, ‘human imperfection’ and ‘error’. 90 Mises emphasizes that, in order to achieve harmony in production, there would have to be a ‘god-like’ planner, an ‘omnipotent and omniscient Deity’, capable ‘to descend to take in hand the government of human affairs’.91 Only an ‘unfailing’ mind of this kind could include in his vision ‘everything which is of significance to the community’ and ‘weigh the conditions of distant parts and future centuries’.92 Mises goes a step further. Given our state of ignorance, he explains the meaning of competition as part of the social process. Mises says:

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Another popular doctrine works with the mistaken concept of ‘free competition’. At first, some writers create an ideal competition that is free and equal in conditions—like the postulates of natural science—and then they find that the private property order does not at all correspond to this ideal. But because realization of this postulate of ‘competition that is really free and equal in conditions’ is believed to be the highest objective of economic policy, they suggest various reforms. In the name of the ideal, some are demanding a kind of socialism they call ‘liberal’ because they apparently perceive the essence of liberalism in this ideal. And others are demanding various other interventionistic measures. But the economy is not a prize contest in which the participants compete under the conditions of the rules of the games. If it is to be determined which horse can run a certain distance in the shortest period of time, the conditions should be equal for all horses. However, are we to treat the economy like an efficiency test to determine which applicant under equal conditions can produce at lowest costs?93 Here Mises is saying that, apart from the formal rules of equality, any impediment to the free use of knowledge and special abilities negates the raison d’e^tre of social cooperation and reduces its possible productivity. If cooperation/competition is the means for mobilizing the different knowledge and abilities of each person, any obstacle to the free mobilization of these differences is an attack on the reasons that create the need for cooperation and its possible effects. As Mises stresses, ‘it is the social spirit, the spirit of social cooperation, which forms, develops, and upholds societies. Once it is lost, the society falls apart again. The death of a nation is social retrogression, the decline from the division of labor to self-sufficiency’.94 It is in such a way that ‘the social organism disintegrates’.95 The decline of the Roman Empire was only a result of the disintegration of ancient society which after reaching a high level of division of labor sank back into an almost moneyless economy […] want and misery set in simply because an economic order working on a lower level in respect of the social division of labor is less productive. Technical skill was gradually lost, artistic talent decayed, scientific thought was slowly extinguished […]. The


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death of nations is the retrogression of the social relation, the retrogression of the division of labor’.96 This is why Of all accusations against the system of Free Trade and Private Property, none is more foolish than the statement that it is antisocial […] and that atomizes the body social. Trade does not disintegrate […]. The division of labor is what first makes social ties: it is the social element pure and simple.97 Therefore, Mises is perfectly aware that an increase in knowledge and socio-economic development comes from the process of cooperation through competition. Competition is a way to explore the unknown, seek solutions to our problems, and correct our mistakes. Hayek: unification of the Austrian and Scottish traditions Hayek is not only the major representative of the fourth generation of scholars of the Austrian School of Economics. He is also the one who, conscious of Menger’s debt, by way of Burke, to the Scottish moralists, has emphasized the connection between Mandeville, Hume and Smith and the representatives of Austrian marginalism. This involves the separation of Smith from the utilitarianism of Bentham and his school. Hayek poses the question clearly. He says: there is here a problem of the division of knowledge which is quite analogous to, and at least as important as, the problem of the division of labor. But, while the latter has been one of the main subjects of investigation ever since the beginning of our science, the former has been as completely neglected, although it seems to me to be the really central problem of economics as a social science.98 Two points must be explained further. As we already know and as Hayek himself was to show, (1) the problem of the division of knowledge was not neglected by Mandeville, by the Scottish moralists and by Burke and (2) it is not a problem only of economics but of all social science.99 This clarified, it must be pointed out that Hayek’s

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main dispute is with the theory of general economic equilibrium. He asserts: In the usual presentations of equilibrium analysis it is generally made to appear as if these questions of how the equilibrium comes about were solved. But, if we look closer, it soon becomes evident that these apparent demonstrations amount to no more than the apparent proof of what is already assumed. The device usually adopted for this purpose is the assumption of a perfect market where every event becomes known instantaneously to every member. It is necessary to remember here that the perfect market which is required to satisfy the assumptions of equilibrium analysis must not be confined to the particular markets of all the individual commodities; the whole economic system must be assumed to be one perfect market in which everybody knows everything. The assumption of a perfect market, then, means nothing less than that all the members of the community, even if they are not supposed to he strictly omniscient, are at least supposed to know automatically all that is relevant for their decisions […]. The statement that, if people know everything, they are in equilibrium is true simply, because that is how we define equilibrium. The assumption of a perfect market in this sense is just another way of saying that equilibrium exists but does not get us any nearer an explanation of when and how such a state will come about.100 In other words: ‘if we want to make the assertion that, under certain conditions, people will approach that state, we must explain by what process they will acquire the necessary knowledge’.101 In more direct terms, the problem is: how can the plans of the individual actors be harmonized? Since the theory of general equilibrium states that all the operators, even if they are not omniscient, know the relevant data, equilibrium is assumed; it is not an objective to be attained. The subjects live in equilibrium, which is permanent, because the knowledge they have allows each one to predict correctly what the other will do. But how is this knowledge acquired?102 At this point, Hayek’s research goes in three directions. Let’s follow each one separately.


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A. Hayek asks the theoreticians of general equilibrium to explain how the actors acquire the necessary knowledge, but he gives the explanation himself. ‘Nothing is solved when we assume everybody to know everything’.103 Therefore, it is difficult to defend economists against the charge that for some 40 to 50 years they have been discussing competition on assumptions that, if they were true of the real world, would make it wholly uninteresting and useless. If anyone really knew all about what economic theory calls the data, competition would indeed be a very wasteful method’.104 ‘But which goods are scarce goods, or which things are goods, and how scarce or valuable they are—these are precisely the things which competition has to discover’.105 Consequently, competition is a ‘procedure for the discovery of such facts as, without resort of it, would not be known to anyone, or at least would not be utilised’.106 It follows that the equilibrium, which is the presupposition of the theoreticians of the general theory, is only a ‘state of affairs’ that the ‘process of competition tends to bring about (or to approximate)’.107 This means that competition is a ‘voyage of exploration into the unknown’.108 It is the tool we use to acquire the knowledge we do not have. If we had the ‘relevant data’ postulated by the theory of perfect competition, we would not need competition. As a result of this, the economic system is always in disequilibrium, as is the actor. The actor is in a state of disequilibrium because he has needs that must be satisfied. And, only if he had enough knowledge, he would already know which needs to satisfy and how to satisfy them. Hayek goes further and explores more deeply. He says: If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place, it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. We must solve it by some form of decentralization.109

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Like Smith, Hayek points out the problem of the dispersion of knowledge in society. And he solves it just as Smith did: The ‘man on the spot’ cannot decide solely on the basis of his limited but intimate knowledge of the facts of his immediate surroundings. There still remains the problem of communicating to him such further information as he needs to fit his decisions into the whole pattern of changes of the larger economic system.110 Therefore: In a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to co-ordinate the separate actions of different people in the same way as subjective values help the individual to co-ordinate the parts of his plan.111 Why is this so? Because prices indicate what is requested or not requested in the market and how appropriate our actions are economically. Consequently, we ‘must look at the price system as much a mechanism for communicating information if we want to understand its real function’.112 And this suggests that the most important fact is ‘the economy of knowledge’ by which the system operates, namely, of how little individual participants must know in order to act correctly.113 In other words, by merely watching the price trend of the products that interest them, individual operators can adapt their activities to changes ‘of which they may never know more than is reflected in the price movement’.114 B. Hence, omniscience is not human and no one can claim that ‘all forces of society be made subject to the direction of a single mastermind’.115 It is important to understand that because we are ignorant and fallible we must trust in interpersonal processes. In fact, ‘insofar as such processes are capable of producing a useful order which could not have been produced by conscious direction, any attempt to make them subject to such direction would necessarily mean that we restrict what social activity can achieve to the inferior capacity of the individual mind’.116 It follows that collectivist theory, by exalting the wisdom of an individual or a limited group entrusted with the management of the society, justifies the ‘privileged point of view on the world’, whereas ‘it


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is the individualist who recognizes the limitations of the powers of individual reason and consequently advocates freedom as a means for the fullest development of the powers of the inter-individual process’.117 Since this process mobilizes the knowledge that is dispersed in a society and creates interaction, it raises us from our limited level and allows for a growth of rationality. Therefore, when the truth or the falseness of a statement is no longer decided on the basis of a logical argument and empirical test, but by examining the social position of the person who made it, when in consequence it becomes the membership of a class or race, and when […] it is claimed that the sure instinct of a particular class or a people is always right, reason has been definitively driven out.118 Indeed, ‘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’.119 But we are not omniscient. Consequently, we need liberty. It is essential in order to leave room for the unforeseeable and unpredictable; we want it because we have learned to expect from it the opportunity of realizing many of our aims. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.120 C. Hayek, in perfect agreement with Hume, maintains that ‘the rules of morality are not the conclusions of our reason’.121 He stresses how law has been ‘as little invented by any one mind as language or money or most of the practices and conventions on which social life rests’.122 However, Hayek underscores an aspect of the problem which, though obviously present in Mandeville, Hume and Smith, is not emphasized. He points out that it is impossible for the mind to direct its own development. Hayek writes: From the belief that they had achieved the old ambition of se ipsam cognoscere mentem, and that they had reached a position where they were able to predict the future course of the growth of Reason, it was only one step more to the still more presumptuous

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idea that Reason should be able to pull itself up by its own bootstraps to its definitive and absolute state. It is in the last analysis this intellectual hubris, the seeds of which were sown by Descartes, and […] already by Plato, which is the common trait in Hegel and Comte. The concern with the movement of Reason as a whole not only prevented them from understanding the process through which the interaction of individuals produced structures of relationships which performed actions no individual reason could fully comprehend, but it also made them blind to the fact that the attempt of conscious reason to control its own development could only have the effect of limiting this very growth to what the individual directing mind could foresee.123 This means that ‘the growth of the human mind is part of the growth of civilization; it is the state of civilization at any given moment that determines the scope and the possibilities of human ends and values. The mind can never foresee its own advance’.124 The intellectualistic hubris is what Hayek calls ‘abuse of reason’, ‘constructivism’ and ‘fatal conceit’.125 All these names denote the same ‘architectonic’ ambition, which is present in Plato and claims it is possible to shape society as one likes according to a plan. It is a psychologism, based on the ‘privileged point of view on the world’. Abstract order and mobilization of knowledge The central question is expressed by Hayek in the following terms: Knowledge exists only as the knowledge of individuals […]. The sum of the knowledge of all the individuals exists nowhere as an integrated whole. The great problem is how we can all profit from this knowledge, which exists only dispersed as the separate, partial, and sometimes conflicting beliefs of all men.126 In other words, we must identify the habitat that offers the conditions ‘that makes maximum use of the knowledge of all’.127 Like the Scottish moralists, the Austrian school paid particular attention to the institutional normative setting. We see this in Wieser when he says: Boehm-Bawerk and I […], like all the economists trained in Austria […], have come to economics through jurisprudence


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and we have always been grateful to the strong impulse the strict discipline of law gave to our knowledge of economics. Private law, which is still an unsurpassed theoretical model, is commercial law, and law of economy. Its clear juridical formulas are full of economic elements. Similarly, when the history of Roman law shows the evolution of these juridical formulas, it is also a part of economic history. This is why the Austrian jurist is a scholar of economic history. We eagerly acquired all this rich material. However, the clear manner in which it was presented to us challenged our youthful enthusiasm. We viewed jurisprudence as a complete science, which did not offer new tasks; we want to know what power the law gave to the legislator. So, we set aside the written codes and turned to the unwritten laws that regulate all economic life of society.128 In the work of Menger, there was already evidence of this attitude of observing economic phenomena and, at the same time, the normative setting. Menger clearly states: Property […], like human economy, is not an arbitrary invention but rather the only practically possible solution of the problem […] imposed upon us by the disparity between requirements for, and available quantities of, all economic goods […]. As a result, it is impossible to abolish the institution of property without removing the causes that of necessity bring it about—that is, without simultaneously increasing the available quantities of all economic goods.129 For his part, Boehm-Bawerk, from the time of Rechte und Verhaltnisse vom Standpunkte der volkwirtschaftlichen Guterlehre, declared that he wanted to ‘inquire into the body of law as an economic structure’.130 Boehm-Bawerk believed, as an acquired fact, that ‘a certain amount of the “historical-legal” or “social” element is sure to be present in all economic phenomena’.131 In more detail, he asserts: There literally exists no price nor any form of ‘distribution’ (except perhaps highway-robbery and the like) without containing at least some legalistic-historical aspect. For, in every civilized community, there must always exist some social order which will apply when two members of that society get into

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contact with each other, and thus determine the nature of that contact. It is, therefore, either saying too little or too much, when anyone claims the phenomena of distribution for the ‘social’, as distinct from the ‘natural’, category; or it is but an empty truism, which, in its very concept, applies to every single economic or social phenomenon, for obviously a Robinson Crusoe could not even so much as ‘barter’ with himself. One member of a society can only trade with another if both can acquire ownership of the goods to be exchanged under the existing social order. Any statement attempting to express more than that truism is too farreaching.132 And Mises explains: ‘Economic action demands stable conditions. The extensive and lengthy process of production is the more successful the greater the periods of time to which it is adapted’.133 ‘The progressive intensification of the division of labor is possible only in a society in which there is an assurance of lasting peace. Only under the shelter of such security can the division of labor develop. In the absence of this prerequisite the division of labor does not extend beyond the limits of the village or even of the individual household’.134 Mises adds: ‘All violence is aimed at the property of others. The person—life and health—is the object of attack only in so far as it hinders the acquisition of property’.135 ‘The war ends when the actual relation is recognized as one worthy to be maintained’.136 ‘Violence and Law, War and Peace, are the two poles of social life; but its content is economic life’.137 Mises stresses: The doctrine of natural law has erred in regarding this great change, which lifts man from the state of brutes into human society, as a conscious process; as an action, that is, in which man is completely aware of his motives, of his aims and how to pursue them. Thus was supposed to have been concluded the social contract by which the State and the community, the legal order, came into existence. Rationalism could find no other possible explanation after it had disposed of the old belief which traced social institutions back to divine sources or at least to the enlightenment which came to man through divine inspiration. Because it led to present conditions, people regarded the development of social life as absolutely purposeful and rational


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[…]. We can ‘explain’ the birth and development of social institutions by saying that those who accepted and best developed them were better equipped against the dangers of life than those who were backward in this respect.138 We have begun this section by pointing out, in agreement with Hayek, that the ‘great problem’ is to identify a normative habitat that can mobilize the knowledge dispersed throughout society. We have seen how the Austrian school paid attention to the normative-institutional question and how it clearly indicates a habitat which protects private property. This means choice, contractual freedom and the market. The following question arises: what characteristics of juridical norms permit all this? The normative habitat of such a system must be made up of ‘rules of just conduct’, 139 that is, rules which, in order to prevent injustice,140 express what harm the actor must not do to the Other and indicate, in positive terms only, the ‘procedure’ the actors must follow to attain objectives decided upon individually. In other words, everyone is free to choose whether to be seller, buyer, Catholic, Jew, etc.; and this gives content to everyone’s life. However, once the content of the action has been chosen, the ‘procedure’ or ‘form’, which has been established by the norms, is the same for everyone, and is intended to safeguard the free choice of everyone. This is the same as saying that the law regulates typical situations, that its norms are applied to all actors who, by their autonomous decisions, produce certain situations. Therefore, these norms are not directed toward anyone in particular. They are abstract, formal and empty.141 They are like algebraic expressions with their known values (procedures) and unknown values. Our choices and actions are fit into these expressions and give concrete values to unknown or empty values.142 Hence, life in an open society is based on an abstract order which, by setting the boundaries among actions, guarantees the establishment of a concrete order but leaves it undetermined; it makes it depend on the decisions the actors decide to take. Hayek says: ‘all that is truly social is of necessity general and abstract in a “Great Society”, and as such will limit but not fully determine our decisions’.143 Thus, liberty is a juridical concept, law and liberty are ‘inseparable’.144 Since the individual must be freed from any prescription of a positive nature, this means that justice is likely to be defined only in negative terms. It is advanced by determining what is unjust.145

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It is obvious that all this implies that, as objectives are decided individually, they are not subject to a common obligatory hierarchy, which is what happens when prescription takes the place of choice.146 In other words, we cooperate with others for objectives we normally do not know, because no one is required to reveal them. When the Other asks us to do something for him, we must decide whether it is worthwhile to accept or refuse his request, but the motives behind this request usually remain unknown. It follows that we may be cooperating in achieving objects we might disapprove of, if we knew what they were.147 In this kind of system, the common element is ‘entirely abstract’.148 ‘It is not attachment to particular things but attachment to the abstract rules […] which will guide its members in their actions and will be the distinguishing attribute’ of a free society.149 The common good is not a specific objective or a concretely defined optimum; it is a normative setting that, by abolishing prescription and permitting everyone to freely mobilize his knowledge and resources, increases ‘everybody’s chances as much as possible—not at every moment, but only “on the whole” and in the long run’.150 To safeguard this system of abstract rules, first of all it is necessary to impede that legislation destroys the law. Legislative interventionism, which then becomes the instrument of economic interventionism, must be avoided, because it destroys equality before the law and the certainty of the law. It is important to understand that The freedom of the British which in the eighteenth century the rest of Europe came so much to admire was thus not, as the British themselves were among the first to believe and as Montesquieu later taught the world, originally a product of the separation of powers between legislative and executive, but rather a result of the fact that the law that governed the decisions of the courts was the common law, a law with which parliament only rarely interfered and, when it did, mainly only to clear up doubtful points within a given body of law.151 Therefore, it is perhaps possible to say that ‘a sort of separation of powers had grown up in England, not because the “legislature” alone made law, but because it did not: because the law was determined by courts independent of the power which organized and directed government, the power namely of what was misleadingly called the legislature’.152


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Substitution of legislation for law has serious consequences. Changing majorities can arbitrarily break general abstract rules and replace them with provisions intended to serve the interest of the groups that are stronger at the moment. This is why Hayek adds this bitter comment: ‘though I firmly believe that government ought to be conducted according to principles approved by a majority of the people, and must be so run if we are to preserve peace and freedom, I must frankly admit that if democracy is taken to mean government by the unrestricted will of the majority I am not a democrat, and even regard such government as pernicious’.153 There is more. Interventionism is encouraged by a very dangerous optical illusion: Since the value of freedom rests on the opportunities it provides for unforeseen and unpredictable actions, we will rarely know what we lose through a particular restriction of freedom. Any such restriction, any coercion other than the enforcement of general rules, will aim at the achievement of some foreseeable particular result, but what is prevented by it will usually not be known. The direct effects of any interference with the market order will be near and clearly visible in most cases, while the more indirect and remote effects will mostly be unknown and will therefore be disregarded. We shall never be aware of all the costs of achieving particular results by such interference.154 Finally, another way to violate the abstract order is by manipulating money. The order is perfectly abstract only if the money ‘is not related at all to a specific purpose’, but to the ‘totality’ of them.155 And yet, when monetary manipulations alter the market data, these distortions caused by governments make money the instrument for activities that seem profitable at the moment but which never would have been undertaken without those manipulations.156 In other words, since money is not neutral, variations in its value do not determine a contemporaneous and equal variation of all prices. Because of an expansive monetary policy, there are products whose prices increase before others. This creates artificial advantages that seem to encourage development in certain economic sectors, but in the end, when all prices have been realigned, what seemed advantageous at the beginning is no longer opportune. This destroys resources which have been artificially removed from a physiological use and are no longer available.

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Property and freedom Therefore, starting out from the fallibility of knowledge, Austrian marginalism makes it clear that renunciation of the ‘privileged point of view on the world’ crosses the entire territory of the open society. We do not have a science of Good and Evil. We do not have a positive test for definitively establishing scientific truth. We do not have subjects who are the exclusive bearers of the truth and are thus entitled to irrevocable power. We do not have a positive test for justice. And we do not have a test to establish definitively what is economically advantageous. What we can do from time to time for knowledge, politics and the economy is to eliminate those presumptions or paradigms which, compared to the new hypotheses emerging from the social process, prove to be incapable of identifying and solving our problems. If we ‘protect’ some concrete, predetermined solution, we are outside the logic of an open society. Another point clarified by the Austrian school is the relationship between private property and personal freedom. Menger, BoehmBawerk and Wieser maintained that all human action is economic, since man lives under conditions of scarcity. Boehm-Bawerk emphasized that action is economic also because time is scarce. This led Mises to say: If all goods were ‘free goods’, man would economize only with his personal activity, i.e., with the application of his personal power and his passing life […]. Only in a Cockaigne populated by men who are immortal and indifferent to the passage of time, in which every man is always and everywhere perfectly satisfied and fully sated, or in a world in which an improvement in satisfaction and further satiation cannot be attained, would the state of affairs that Gottl calls ‘privation’ not exist. Only in so far as it does exist does action take place; as far as it is lacking, action is also lacking.157 Consequently, human action is always economic. It is economic in the ‘narrower sense’, when it takes place within the monetary sphere.158 And it is economic in a broader sense when it takes place outside that sphere. It is always economic, because it requires the use of resources (including time), which are scarce. If action is always economic, people without resources cannot act freely. They have no personal freedom. Mises states this as follows:


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There can be no freedom of press where the government owns every printing office. There can be no free choice of profession or trade where the government is the only employer and assigns everyone the task he must fulfill. There can be no freedom to settle where one chooses when the government has the power to fix one’s place of work. There can be no real freedom of scientific research when the government owns all the libraries, archives, and laboratories and has the right to send anyone to a place where he cannot continue his investigation. There can be no freedom in art and literature where the government determines who shall create them. There can be neither freedom of conscience nor of speech where the government has the power to remove any opponent to a climate which is detrimental to his health, or to assign him duties which surpass his strength and ruin him both physically and intellectually.159 Mises adds: As soon as the economic freedom which the market economy grants to its members is removed, all political liberties and bills of rights become humbug. Habeas corpus and trial by jury are a sham if, under the pretext of economic expediency, the authority has full power to relegate every citizen it dislikes to the arctic or to a desert and to assign him ‘hard labor’ for life. Freedom of the press is a mere blind if the authority controls all printing offices and paper plants. And so are all the other rights of men […]. A man is free as far as he shapes his life according to his own plans. A man whose fate is determined by the plans of a superior authority, in which the exclusive power to plan is vested, is not free.160 Apropos of the same subject, Hayek says: Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower—in short, what we should believe and strive for.161 Hence, personal freedom exists only where there is private ownership of resources.

7 The intellectualistic hubris and the destruction of liberty

There are no ‘privileged’ sources of knowledge In a famous passage from Laws, Plato says that ‘change […] is always highly perilous’.1 However, as we have tried to point out from the very first chapter, a society is open because it is open to change or, to be more precise, because it is the institutionalization of change. This occurs primarily through the renunciation of the ‘privileged point of view on the world’, of the fundamentum inconcussum. While Solon, Pericles and Protagoras were the first to try to identify the habitat of the open society, Plato was the one who, in view of the advancement of the market, critical discussion and democracy, tried to identify the habitat of the closed society. Undoubtedly, an open society was a threat to the Athenian aristocracy, who wanted to monopolize the government of the city. And it is known that Plato belonged to a powerful aristocratic family. The advancement of the mercantile middle class was seen by the aristocracy as an illegitimate ousting from power. This led to the reaction of men like Plato, who can be considered the prototype of the proletarianized intellectual.2 However, the motivations for Plato’s theoretical works are not the most important issue. What counts is that their objective is to restore a closed society. This could not be accomplished by trying to revive the declining belief in the ancient Greek religion and the cult of the Olympian gods;3 it required a more sophisticated strategy. There is a point that should be clarified immediately. The claim that critical reasoning ended belief in the Olympian gods is an oversimplification that obscures the most important part of the process and overlooks the fact that reason itself is a product of those events. In 128

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other words, the opening to the world weakens the need for a given belief or institution and creates the space for critical discussion. Reason was not the instrument that caused the death of the ancient Greek religion, because critical discussion advanced only after the opening to the world had weakened the sense of the absolute with which the ancient beliefs were experienced.4 Thus, critical reasoning is born when gnoseological absolutism dies. Using reason to re-establish the ‘privileged point of view on the world’ is the same as denying it. One falls, as Hayek says, into the ‘abuse of reason’ or, more precisely, into psychologism, which is an attitude that leads to viewing events and social institutions as ‘the outcome of motives springing from the minds of individual men’.5 The social process is abolished. Truth is no longer the temporary and always partial result of a continual confrontation between ‘conjectures and refutations’, but the uncontestable verdict of a privileged source of knowledge. William Bartley writes: The Western philosophical tradition is authoritarian in structure, even in its most liberal forms. This structure has been concealed by oversimplified traditional presentations of the rise of modern philosophy as part of a rebellion against authority. In fact, modern philosophy is the story of the rebellion of one authority against another authority, and the clash between competing authorities. Far from repudiating the appeal to authority as such, modern philosophy has entertained only one alternative to the practice of basing opinions on traditional and perhaps irrational authority: namely, that of basing them on [… an] authority’6 that is presumably rational. In other words: The church should be replaced by intellectual intuition, intellectual intuition by sense experience, sense experience by a particular language system. And so on. These revolutions have had a depressingly similar pattern. And since […] the pattern itself dooms the revolution to failure, future philosophical revolutions that remain within this pattern cannot succeed,7 because they go on to identify a new fundamentum. In addition to what Bartley asserts, the only thing to say is that the monotony of this ‘story’ concerns not only ‘modern philosophy’

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but has affected philosophy from its beginnings. Plato asserts that the ‘individual’s duty is to understand the true doctrine […] and live in obedience to it, the city’s to accept this doctrine from a god or from the human discoverer […] and make it law’.8 And yet Plato himself is the citizen who is bearer of this knowledge and the one who gives a ‘fundamentum’ to his projections in the name of a presumed reason. Popper rightly states: Socrates had only one worthy successor, his old friend Antisthenes, the last of the Great Generation. Plato, his most gifted disciple, was soon to prove the least faithful. He betrayed Socrates, just as his uncles had done. These, besides betraying Socrates, had also tried to implicate him in their terrorist acts, but they did not succeed, since he resisted. Plato tried to implicate Socrates in his grandiose attempt to construct the theory of the arrested society; and he had no difficulty in succeeding, for Socrates was dead.9 Plato understands that the ‘privileged point of view on the world’ cannot be re-established by resorting to belief in the old Greek religion, because this belief has been weakened by the opening to the world. 10 He replaces it with the belief that philosophical knowledge is a gift of god which can be attained only by conversion, which is ‘the wheeling round of the whole soul towards the light of the idea of God’. 11 However, if this is the case, such a type of philosophy, though ‘means death of the old gods, it is itself religion’.12 It is the ‘supreme stage of a new self-assurance on man’s part, under whose foundations lie vanquished a wild army of darksome forces […it is] the triumph of the intellect over a whole world of rough and unformed powers’.13 Thus, Plato carries out the operation that Bartley sees accomplished in modern philosophy, when it replaces ‘traditional and perhaps irrational authority’ with a new authority, which is presented as rational. While Plato maintained it was possible to know ‘pure being’, in like manner Descartes says that the ‘chains of reasons, all quite simple and quite easy, which geometers are wont to employ in reaching their most difficult demonstrations’, gave him the opportunity to ‘imagine that all the possible objects of human knowledge were linked together in the same way’ and that ‘there was nothing so remote that it could not be reached, nothing so hidden that it could not be


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discovered’.14 In other words, man can know everything. ‘The world of reality and the world of thought are two cosmoses that coincide, each of them compact and continuous, in which nothing remains fragmentary, isolated and unreachable’.15 To be human is not ignorance but knowledge; and this shows how unreal the Cartesian ‘methodical doubt’ is and how different it is from ‘real doubt’, namely, from the uncertainties and risks of life.16 All this has serious consequences. If the power of God is ‘effortless’, because the ‘power of thought moves everything’,17 even the human intellect, which is part of divine nature, can change the world as it pleases. At this point regression to animism becomes the illusion of being able to eradicate the principle of reality. It is a return to magic. The philosopher wants to obliterate what exists; he wants a new world and he knows the ‘formula’ that guarantees he will achieve both his desires.18 However, we may not like the world the philosopher wants to build; we can argue that it is impossible to have a science of Good and Evil. In that case the philosopher will provide for ‘social purgation’.19 He is authorized to do this, because of his superior knowledge and he must do it. If he did not, he would be responsible for a ‘sin of omission’.20 To avoid this, his only alternative is to have his own life coincide with ‘innocent sin’.21 His actions must be directed toward achieving such noble objectives, which absolve him from the crimes that must be committed. Thus, we are faced with a ‘fabricated’ tragedy. The actors operate on false premises, and the only tragic aspect is the fate of the victims. The falsity of the premises is due to the intellectualistic hubris at the origin of it. The philosopher claims to be the only one to know Good and Evil, and this seems to justify the tragedy. But this is a deception which is probably also self-deception, because of the good will men feel for themselves. Indeed, if we are humble enough to recognize that we are all equally ignorant and fallible, the ‘tragic knot’ is immediately untied. Nobody is the bearer of absolute knowledge. And recognition of this does not force us to commit any (‘innocent’) crimes. Even if one has such courageous humility, human existence is still a drama. But liberty helps us to face the uncertainty of life.22 This means that change itself is the means we use when looking to solve our problems and limit uncertainty. In such a way we avoid transforming the collective life into one tremendous tragedy or, to put it differently, we free ourselves from the tragedy ‘fabricated’ by the unquenchable

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thirst for power of some blood-thirsty minority, whose crimes are completely unjustifiable.23 Bartley points out: Comparatively few persons enjoy the give-and-take of criticism or think to any purpose other than to dominate. Nonetheless, science—which is utterly dependent on criticism and detachment, and on thinking for the sake of the truth rather than the sake of domination—has come into being, and has flourished, during the past four hundred years.24 Bartley asks himself ‘how has this happened?’.25 His answer is that it was a result of competition.26 The question then becomes: what is the habitat of competition? The first step in identifying this habitat is to reject the idea of a ‘monopoly of truth’, namely, to refuse the ‘belief that knowledge may legitimize itself by its pedigree’.27 Because, aside from the fact that there are many possible sources and that we often are not even aware of them, ‘pure, untainted and certain sources do not exist’;28 ‘all sources are liable to lead us into error at times’.29 Therefore, no one can aspire to represent the ‘privileged point of view on the world’. We must give up the ‘justificationist metacontext of true belief’, where the task of intellect is ‘to justify, verify, confirm, make firmer, strenghten, validate, vindicate, make certain, show to be certain, make acceptable […] cause to survive, defend particular contexts and positions’.30 We must realize that ‘there are all kinds of sources of our knowledge; but none has authority’.31 We must give up the idea of a ‘privileged source’, of a ‘fundamentum inconcussum’; we must not substitute a rational authority considered true for a rational authority considered false. If all sources can lead us into error, we must always reason critically. Our problem is to use the following formula: How can our intellectual life and institutions be arranged so as to expose our beliefs, conjectures, policies, positions, sources of ideas, traditions, and the like—whether or not they are justifiable—to maximum criticism, in order to counteract and eliminate as much intellectual error as possible?32 We need a metacontext that includes the concept of fallibility. This comes with the renunciation of the ‘privileged point of view on the world’ and the affirmation of the egalitarian theory of rationality, of


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which equality before the law is the consequent institutional-normative precipitate. All this permits us to see the real objective of trying to ‘paralyze’ the criticism of others by presenting it as the product of ‘corrupt’ thought of a class, race, religion or other social group. We are faced here with a ‘protective’ barrier set up to defend the ‘privileged point of view on the world’. And this negates ‘intellectual equality’ among men, because its aim is to prevent the affirmation of a fallibilist metacontext that includes the concept of fallibility, i.e., of critical discussion and all that it signifies.33 Historicism, gnosis and utopia Recognition of our ignorance and fallibility leads to an open society. The presumption of holding a ‘monopoly of the truth’ destroys all systems of liberty and is conducive to the revival of tribalism. Popper used the term ‘historicism’ to categorize all those doctrines which, by presuming to hold a ‘privileged point of view on the word’, make politics an ‘architectonic science’ of society and, at the same time, claim they can direct the historical development of humanity. Thus, ‘historicism’ is fostered by the idea of a fundamentum inconcussum, which supplies the gnoseological ‘legitimacy’ for prefiguring future historical development. And yet these prefigurations, like the ‘privileged point of view on the world’, are not at all rational. Historicist ‘prophecies’ are unconditioned and have no rational basis, because they do not indicate the conditions that would make them possible. This is why Popper speaks of ‘oracular philosophy’ as well as of historicism.34 Other authors use other names to refer to the same phenomena. Before dealing with some of them, it is important to stress, as mentioned before, that critical rationalism is ‘linked up with the recognition of the necessity of social institutions to protect freedom of criticism, freedom of thought, and thus the freedom of men’.35 In other words, since no one is the exclusive depositary of rationality, rationality itself can only be the product of a social process open to everyone. Consequently, the thesis of Eric Voegelin, according to which modernity is nothing more than the ‘growth of gnosticism’, is surprising.36 If this were so, many causal relationships would not exist and it would no longer be possible to distinguish between psychologism, which is the basis of the ‘privileged point of view on

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the world’ and its historical-social projections, and critical rationalism, which is its negation. Let us see how Voegelin explains his position: Christianity had left in its wake the vacuum of the de-divinized natural sphere of political existence. In the concrete situation of the late Roman Empire and the early Western political foundations, this vacuum did not become a major source of trouble as long as the myth of the empire was not seriously disturbed by the consolidation of national realms and as long as the church was the predominant civilizing factor in the evolution of Western society, so that Christianity in fact could function as a civil theology. As soon, however, as a certain point of civilizational saturation was reached, when centers of lay culture formed at the courts and in the cities, when competent lay personnel increased in royal administration and city government, it became abundantly clear that the problems of a society in historical existence were not exhausted by waiting for the end of the world. The rise of gnosticism at this critical juncture now appears in a new light as the incipient formation of the Western civil theology. The immanentization of the Christian eschaton made it possible to endow society in its natural existence with a meaning which Christianity denied to it. And the totalitarianism of our time must be understood as journey’s end of the gnostic search for a civil theology […]. Gnostic movements were not satisfied with filling the vacuum of civil theology; they tended to abolish Christianity […] with the more radical immanentization of the eschaton [gnosticism] became openly anti-Christian.37 Therefore, gnosticism would be a perversion of Christianity, an attempt to achieve on earth the promised reign of the hereafter. Voegelin also maintains that ‘the movement had a long social and intellectual prehistory, but the desire for a re-divinization of society produced a definite symbolism of its own only toward the end of the twelfth century’; 38 and here Voegelin declares that the ‘first clear and comprehensive expression of the idea’ is to be found in ‘the person and work of Joachim of Flora’. 39 He adds that this idea reached its culmination in Marxism and Nazism. We lack space now for a critical examination of all Voegelin’s affirmations. We shall limit ourselves to the central idea of his


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thesis. which claims to make all of modernity coincide with the attempt to make the Christian eschaton immanent. This will allow us to use certain elements of Voegelin’s diagnosis in a way that is less restrictive and in agreement with what is maintained in this book. By using the term modernity for ideas and institutions that are hostile to one another, Voegelin makes it difficult to understand the real enemies confronted by gnosticism and how we have to defend ourselves from it. He rightly says that ‘Gnosticism as a counterexistential dream world can perhaps be made intelligible as the extreme expression of an experience which is universally human, that is, of a horror of existence and a desire to escape from it’.40 If so, gnosticism needs to eliminate the principle of reality. Voegelin himself admits this when he writes that ‘the critical exploration of cause and effect in history is prohibited’; ‘consequently the rational coordination of means and ends in politics is impossible’, and everything becomes a ‘magic’ operation.41 As we have repeatedly emphasized, the premise of all this is psychologism, the activation of projective ‘logic’. Hence, it is difficult to understand why Voegelein absolves Plato of all responsibility.42 He mentions authors who agreed with that absolution.43 But this cannot modify the fact that in Plato knowledge is, as we have repeatedly stressed, a pure conversion, the rejection of any critical discussion. Voegelin does not realize that the doctrine of Being, which is ‘ungenerable and imperishable’, ‘whole, unique, immovable and without end’,44 is the ‘counter-existential dream‘ that opposes and tries to negate reality.45 This raises two questions. First, it is true that ‘what the Alexandrians have to offer under the name of gnosis is of course very different from the systems of a Basilides or a Valentinus’.46 But the ‘Christian gnosis of Clement or Origen unequivocally explains itself as an attempt to satisfy the gnostic appetites of their contemporaries in a legitimate fashion. To the Oriental gnosis and its crude symbolism they oppose their own gnosis, which is largely derived from Greek philosophy’.47 Here it is necessary to note that Origen, ‘the greatest and most important writer of the Church in Greek, has a complicated relationship with the world of gnosis. His dialectic relationship with this world is equivocal and dangerous […]; […] in his polemics with the gnostic master, he uses the same allegorical principles as his adversary. In addition to harsh criticism and interpretative skill, he shares the same engagement as the master for penetrating the mystery of the

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Scriptures. He sees in them the pre-existence and downfall of the soul, the “principles” of the divine world that are found in the thoughts of his adversaries’.48 Thus, it can be said that gnosticism ‘perverts’ Christianity. But we must acknowledge that the ‘counter-existential dream’ has more ancient roots. As for Christianity in particular, one must stress, as Popper does, that if it recommends the ‘creation of myth as a substitute for Christian responsibility is a tribal Christianity. It is a Christianity that refuses to carry the cross of being human’. 49 Popper himself suggests that one should be wary of ‘these false prophets’, since what ‘they are after, without being aware of it, is the lost unity of tribalism’.50 Second, if we identify the gnostic roots of the doctrine of Being and see it as a reaction to the advancement of the open society and the institutionalization of change, what Voegelin left in a zone of total shade becomes clearer. Modernity and gnosticism cannot coincide, because one is the worst enemy of the other. In Athens, Rome and Europe, where the ‘Great Society’ was established, modernity has always had its basis in the market; and this led to the renunciation of a fundamentum inconcussum, because the market is where people of different religious and philosophical world-views come together. It is a total break with tribalism. Consequently, it is difficult to understand the historical-political significance of the open society and the unrestrained fear of a world that is adapting to a life without a single, obligatory, unquestioned and unquestionable fundamentum. This explains the reaction against such a world, which appears overturned, desecrated and lacking in direction, and the attempt of activists to replace it with the ‘counter-existential dream’.51 Modernity cannot coincide with gnosticism, because all the energies of the gnostic movement are directed against it. Once the above questions have been clarified, there is still one point that requires brief discussion. We must ask ourselves whether there is any relationship between utopianism and gnosticism. First of all, it seems there is a difference in circumstances. While the utopist gives a ‘detailed description’ of the New World, the gnostic concentrates his energies in destroying what exists and waits for the final liberation from this simple reversal.52 Without taking anything away from this distinction, there still remains the fact that in both cases there is a ‘dream’ of eliminating the principle of reality and the open society.53 This happens because both the utopist and the gnostic want to establish the ‘privileged point of view on the world’.


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The myth of Sparta and the ‘two French revolutions’ Every time there is an advancement of the market and the open society, tribalism makes an appearance. We have seen that even in Descartes there is praise for Sparta, because its laws, ‘being all the invention of one man, tended towards the same end’.54 Surprisingly, we have even found Montesquieu among the celebrators of the Spartan system.55 The list of those who explicitly or implicitly showed their preference for the liberty of the ancients is very long. With keen perception Constant mentions Mably and Rousseau. Constant writes: The abbé de Mably, like Rousseau and many others, had mistaken, just as the ancients did, the authority of the social body for liberty; and to him any means seemed good if it extended his area of authority over that recalcitrant part of human existence whose independence he deplored. The regret he expresses everywhere in his works is that the law can only cover actions. He would have liked it to cover the most fleeting thoughts and impressions; to pursue man relentlessly, leaving him no refuge in which he might escape from its power. No sooner did he learn, among no matter what people, of some oppressive measure, than he thought he had made a discovery and proposed it as a model. He detested individual liberty like a personal enemy; and whenever in history he came across a nation totally deprived of it, even if it had no political liberty, he could not help admiring it. He went into ecstasies over the Egyptians, because, as he said, among them everything was prescribed by the law, down to relaxations and needs: everything was subjected to the empire of legislator. Every moment of the day was filled by some duty.56 There is more: Sparta, which combined republican forms with the same enslavement of individuals, aroused in the spirit of that philosopher an even more vivid enthusiasm. That vast monastic barracks to him seemed the ideal of a perfect republic. He had a profound contempt for Athens.57 As for Rousseau, Constant says:

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I shall show that, by transposing into our modern age an extent of social power, of collective sovereignty, which belonged to other centuries, this sublime genius […] has nevertheless furnished deadly pretexts for more than one kind of tyranny.58 Is it really true that Mably and Rousseau extolled Sparta? There is no doubt. Among the many passages in which Mably takes Sparta as a model to be followed, it is worthwhile to pause over the following: ‘The salvation of the country is not yet lost […]. You, Phocion, […] in your compassion for your unhappy compatriots, prevent their ruination. You are our Lycurgus. Why do you not recreate in Athens the miracle of Sparta? Would we today honor this legislator as the wisest of men, to whom Greece owed six centuries of prosperity, if he had not had the courage to force the Spartans to appreciate justice and virtuous habits? Follow his example […]. Virtue is not yet extinguished in every heart […]. Like Lycurgus, you will still find thirty citizens to help you.59 And what about Rousseau? He speaks of Sparta as a ‘Republic of demi-Gods rather than of men’.60 He maintains that it is an error to improve the institutions, because ‘the thing to do would have been to begin by purging the threshing floor and setting aside all the old materials, as Lycurgus did in Sparta’.61 And he sees in Athens a ‘most tyrannical aristocracy governed by learned men and oratores’.62 Nor do Helvétius and Holback hesitate to praise Sparta.63 And Diderot states: In France the reason for the protest against tax collectors is exactly the same as it is elsewhere. I would like there to be only two classes: soldiers and suppliers. I would like my soldiers to be treated well and I do not care if my suppliers are rich. I use the tax collectors to strip them and I strip the tax collectors. Tacitly, I revive the government of Sparta. If my suppliers think they are different from Ilots, they are wrong. I plan and do on a large scale what Lycurgus did on a smaller one.64 Moreover, as Jacob Talmon writes, the ‘Jacobins took from Mably, not less than from Rousseau, their idea of virtuous, egalitarian happiness. On the very eve of Thermidor, Saint-Just brings with him copies of


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Mably to the Committee of Public Safety, and distributes them among his collegues, the other dictators of Revolutionary France, in order to win them over definitively for his plan of enthroning virtue, and thereby completing and insuring the regeneration of the French people, and the emergence of a new type of society. Finally, Babouvism adopted Mably’s Communism’.65 Here is what Babeuf says: De facto equality is not a chimera. It was successfully achieved by the great legislator Lycurgus. He managed to establish an admirable system in which the costs and benefits of the city were equally shared. The necessities for living were an inalienable right of everyone; and nobody could have more than necessary.66 Saint-Just asserts that ‘intelligence is a sophist, which drags virtue to the gallows’.67 He says one must avoid falling into the ‘corruption of a mercantile Republic’.68 For this reason, he declares that the real citizen ‘does not possess more goods than it is allowed by the law’.69 He proposes that children be educated the way they were in Sparta: ‘Children belong to their mothers up to the age of five […]; then to the Republic until their death […]. The youth, the citizen belong to the country. Children are raised to love silence and to disdain rhetoric. They are educated to be laconic’.70 Furthermore, they ‘must dress simply in every season. They sleep on mats eight hours a day […] and they eat together and are fed only roots, fruit, legumes, cheeses, bread and water’.71 We are in the new Sparta. Obviously, this presupposes the reappearance of the omniscient legislator and the suppression of all individual autonomy: there is no critical discussion, there is no democracy, and there is no private property or market. It is now understandable why Guglielmo Ferrero identified not one but ‘two French revolutions’, the revolution of 1789 and that of the 18th Brumaire, but which really began on June 2, 1793. The events of June 2 were of inestimable importance. They marked the definitive failure of the first French revolution of 1789, the revolution […] of Mirabeau and Talleyrand, who attempt to give France a representative government based on political freedom. The second revolution, which would negate the first one, was about to begin. It was the revolution of 1799 […], that of the constitution of the VIII year and the Consulate, which

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produced the first totalitarian government in Europe […]. Even after one hundred and fifty years, this dualism of revolution still divides the world. The present struggle is nothing more than an extension. The Anglo-Saxons fight for the revolution of 1789; totalitarian regimes for the one of 1799.72 Ferrero continues: The Convention […] did not represent legitimate power. It represented only a part of France. The supporters of the ancien régime were not able to contribute to its formation. They were excluded both as candidates and as electors. The Convention only represented revolutionary France. It did not concede the right of opposition to Catholics and Monarchists. A representative regime, founded on the principle of popular sovereignty, is legitimate only if it respects the right of opposition of the minority. Even though the Convention did not enjoy this basic legitimacy, it was able to claim a second-order legitimacy, because it recognized the right to oppose revolutionary France […]. Until then, there had been a war between revolutionary France and the ancien régime. Now there was another within the Revolution itself. The moderate majority of the Convention was annihilated. Once its leaders were beheaded, the majority left Paris and dispersed. For almost two years, no more than two hundred and fifty deputies would sit. It was the end of all discussion. The small Montagnard minority, with its organized armed bands of Parisian plebeians, tyrannized the Republic. The right of opposition was more and more restricted. There were only the Montagnards, a minority of the Convention, which only represented a minority in France.73 However, in 1790 Burke had already formulated his desecrating analysis of the events of the French revolution: In the weakness of one kind of authority, and in the fluctuation of all, the officers of an army will remain for some time mutinous and full of faction, until some popular general, who understands the art of conciliating the soldiery, and who possesses the true spirit of command, shall draw the eyes of all men upon himself. Armies will obey him on his personal account. There is no other way of securing military obedience in this state of things. But the


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moment in which that event shall happen, the person who really commands the army is your master—The master (that is little) of your king, the master of your Assembly, the master of your whole republic.74 Burke not only foresaw the (Napoleonic) destiny toward which France was headed, but he also understood why it was inevitable. We are but too apt to consider things in the state in which we find them, without sufficiently adverting to the causes by which they have been produced, and possibly be upheld […] if learning, not debouched by ambition had been satisfied to continue the instructor, and not aspired to be the master.75 But this did not happen. People did not understand that, ‘when ancient opinions and rules of life are taken away, the loss cannot possibly be estimated. From that moment we have no compass to govern us, nor can we know distinctly to what port we steer’.76 We lose sight of the fact that ‘which in first instance is prejudicial may be excellent in its remote operation’.77 We do not realize that, because of our ignorance and fallibility, ‘very plausible schemes, with very pleasant commencements, have often shameful and lamentable conclusions’.78 Burke asks: ‘is every landmark of the country to be done away in favor of a geometrical and arithmetical consitution?’ 79 The revolution presumed to establish in society the precepts of an ‘architectonic science’, whose objective was to reconstruct the social institutions after their destruction. Consequently, ‘by following those false lights, France has bought undisguised calamities at the higher price than any nation has purchased the most unequivocal blessings’.80 This example means overturning ‘all orders, ranks, and distinctions’; there would be a ‘universal anarchy, joined to national bankruptcy’; ‘three or four thousand democracies should be found into eighty-three’ by means of a strong central power.81 Burke adds: The ears of the people of England are distinguishing. They hear these men speak broad. Their tongue betrays them. Their language is in the patois of fraud, in the cant and gibberish of hypocrisy.82 And again:

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We are not the converts of Rousseau; we are not the disciples of Voltaire; Helvétius has made no progress amongst us […] madmen are not our lawgivers. We know that we have made no discoveries, and we think that no discoveries are to be made, in morality,—nor many in the great principles of government, nor in the ideas of liberty, which were understood long before we were born altogether as well as they will be after the grave has heaped its mold upon our presumption, and the silent tomb shall have imposed its law on our pert loquacity.83 Burke’s final judgment is that the ‘state has fallen by the hands of the parricides of their country, called the Revolutionists and Constitutionalists of France: a species of traitors, of whose fury and atrocious wickedness nothing in the annals of the frenzy and depravation of mankind had before furnished an example, and whom I can never think or speak without a mixed sensation of disgust, of horror, and of detestation, not easy to be expressed’.84 In addition, Burke believed that the enemies of monarchy ‘were not the enemies to its faults’.85 Tocqueville, in the wake of Burke, would also dwell on this point. Starting from the idea that the task of liberal democracy is to extend ‘the sphere of individual freedom’ and give ‘the utmost value to each man’,86 he says: ‘Many institutions of the ancien régime have passed into the new society. They have only changed their name’.87 Tocqueville offers the following explanation: If I were asked how that portion of the ancien régime could be transported, enlarged, into the new society, I would answer that, if centralism did not disappear during the Revolution, it was precisely because it was the principle of the Revolution.88 The revolutionaries used central power to destroy and rebuild everything according to their plan; they thought that only that power could accomplish their goals. They said that the State should have unlimited power.89 Exactly like Burke, Tocqueville believes that in the culture of the various reformers ‘there was no idea of liberty’.90 And he does not hesitate to accuse Voltaire of this. He asserts:


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After a three-year-stay in England, he recognized liberty, but did not love it. The skeptical philosophy of the English fascinated him, but their political institutions did not attract him: he saw in them more vices than virtues. In his letters from England, which are his masterpieces, Parliament receives the least amount of attention. Above all, he admired the English freedom of press, but he did not concern himself with political freedom, as if freedom of press could exist without political freedom.91 Not to mention the physiocrats who, finding nothing that seemed to conform to their ideals, ‘looked for them in the heart of Asia. I do not think it is an exaggeration to say that none of them refrained, in their writings, from enthusiastic praise of China’.92 Tocqueville also reaches another important conclusion: It is usually believed that the destructive theories, which are fashionable today under the name of socialism, are of recent origin. This opinion is wrong. These doctrines were common at the time […of the physiocrats]. While the latter aspired to an omnipotent government to change social institutions, the other wanted an omnipotent power to undermine the foundations of society.93 Therefore, one might say, as Cochin does, that ‘anarchy gives rise to popular societies and the Jacobin horde rises from the corps of the ancient France, just as the bees of Aristaeus rose from the entrails of the dead bull’.94 Cochin wants to stress that, well before the outbreak of the revolution, the ‘spirit of Jacobinism’ was already present in French society. This spirit is nothing more than intellectualistic hubris, the presumption of being the holder of the only possible truth, of being able to eradicate the present wicked institutions and found a perfect society. A new Sparta is required, and it should have the ‘fanatical certainty’ of redesigning reality.95 Once again the liberty of the ancients and that of the modern are completely on a collision course. They are perpetuating the conflict between the models of Sparta and Athens, between tribalism and an open society. The outcome of the French revolution was a real disaster. France found itself in worse economic conditions than those before 1789, and so it lagged even farther behind England.96 And the world has inherited a revolutionary myth that is deceptive and liberticide.

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The socialist roots of Nazism The idea that there can be a ‘privileged’ source of knowledge always violates the egalitarian theory of rationality, and this always produces illiberal social systems. However, the strength with which the ‘privileged point of view on the world’ is affirmed can be of varying intensity. The space for autonomy can be limited to a minimum or completely eliminated. Absolute monarchy, which claimed legitimacy from God, never managed to ‘destroy all the intermediate powers’,97 nor did it ever plan to completely eradicate all traditions on the grounds that they are the fruit of old prejudices. Nevertheless, when the French revolution ‘taught the people to regard their wishes and wants as the supreme criterion of right’, it abrogated ‘intermediate powers’.98 The representatives of systems based on tradition certainly oppose the advancement of the market; and yet, because they are still in power, they cannot declare war on what exists. To do this, one must feel ‘proletarianized’ by the open society. Hence, the ‘counter-existential dream’, which can occur only after totally eradicating the institutions responsible for proletarianization. As we know, this is why, when the aristocrat Plato has already been ousted from the government of the city, he wants the complete cleaning of the canvas. And this is why most extremist leaders of the French revolution came from the social classes that felt most threatened by the establishment of the ‘Great Society’. In other words, revolutionaries have never been members of a class on the rise but of ‘classes involved in a process of social decay’.99 Thus, we can also explain why the Girondists, who represented classes on the rise, claimed rights but did not propose razing French society to the ground. They were reformers, while the most extremist leaders were ‘enemies to the monarchy’ but not of its ‘faults’; they were enemies of the open society. A similar phenomenon can also be seen in Germany. As Mises says, ‘German liberalism had not yet fulfilled its task when it was defeated by étatism, nationalism, and socialism’.100 Bismarck and his military and aristocratic friends hated the liberals so thoroughly that they would have been ready to help the socialists get control of the country if they themselves had proved too weak to preserve their own rule. But they were—for the time being—strong enough to keep a tight rein on the Progressives. They did not need Lassalle’s support.101


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Apropos of this, Friedrich von Hayek writes: ‘the doctrines which had guided the ruling elements in Germany for the past generation were opposed not to the socialism in Marxism but to the liberal elements contained in it’, as for example its internationalism.102 And yet, ‘when it became increasingly clear that it was just these elements which formed obstacles to the realization of socialism, the socialists of the Left approached more and more those of the Right’.103 Such a state of affairs is evident in the fact that Spengler thought of regaining socialism by freeing it from Marx and his ties to political economy. Spengler asserted: Today one suspects that Marx was merely the step-father of socialism. Socialism contains stronger and more ancient elements than Marxian criticism of society. These elements existed before Marx and they blossomed even without him and against him. They are not found in writings but are in the blood. The future will be decided by blood.104 Spengler asked himself: ‘If socialism is not Marxism, what is it’?105 And he replied: There is already a presentiment; but, since we are preoccupied with plans, points of view and objectives, nobody dares to admit it. We avoid the crucial decisions of past times and take refuge in stale, weak ones, like those of Rousseau and Adam Smith. Every action should be against Marx, but he is invoked by everyone. The time for political programs has passed […] Today there is only one task: to free German socialism from Marx. I say German socialism, because there is no other. This truth too is one that will not be hidden for long. We Germans are socialists, even though we never speak about it. It is impossible for others to be socialists. I do not see this as a ‘compromise’, an allusion, or a reference: it is a destiny.106 Spengler’s conclusion is: The old Prussian spirit and the socialist principle, which are now in fratricidal combat, are one and the same thing. We do not learn this from literature but from the inexorable reality of history, where pure ideals, principles and theoretical conclusions are

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replaced by blood, unexpressed ideas about race, and a unifying thought that has become a balance of body and spirit.107 Sombart sees the open society as a ‘tower of Babel’.108 He agrees with the idea of purifying socialism of all Anglo-Saxon contamination to prevent it from becoming ‘a capitalism in an inverted form’, and he openly declares that ‘German socialism is anti-capitalism’.109 Just as Marx considered his socialism ‘the riddle of history solved’,110 Sombart believes that the Führer takes orders ‘only from God’, the ‘supreme Leader of the world’, and that Führertum is a ‘progressive revelation’.111 It should be added that Lassalle did not hesitate to say that the ‘state is God’ and Bebel told Bismarck that ‘German Social Democracy is a sort of preparatory school for militarism’.112 This is why Mises writes: If the communists had seized power in Germany, they would not have adopted a less aggressive policy than the Nazis did. Strasser, Rauschning, and Hugenberg were personal rivals of Hitler, not opponents of German nationalism.113 Soviet militarism confirms all this. As Hume emphasized, the fact is that ‘whoever chooses the means, chooses also the end’;114 or, as Tocqueville explained, when the ‘means are the same’, the results cannot be anything but the same.115 What is left of Marxism, if we eliminate all the frills and promises used in a real act of social slight-ofhand, is the absolute centralization of power and the militarization of society. It is the new Sparta.116 Obviously, those who believe that socialism and Nazism must be kept separate might object that the former intended to proceed (and has proceeded) in suppressing private ownership by relying on only one plan of production and distribution, while the other retained private property. And yet this does not make one system better than the other. Nazism maintained private ownership of the means of production and entrepreneurship only ‘seemingly and nominally’. 117 In fact, in the so-called Zwangswirtschaft, the entrepreneurs do the buying and selling, pay the workers, contract debts, and pay interest and amortization. There is no labor market; wages and salaries are fixed by the government. The government tells the shop managers what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. The


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government decrees to whom and under what terms the capitalists must entrust their funds and where and at what wages laborers must work. Market exchange is only a sham. All the prices, wages, and interest rates are fixed by the central authority. They are prices, wages, and interest rates in appearance only; in reality they are merely determinations of quantity relations in the government’s orders. The government, not the consumers, directs production. This is socialism.118 This is a crucial point. When the market and its mobilization of dispersed knowledge is abandoned, because the ‘members of the government and its assistants’ are believed to be ‘more intelligent than the people and they know better what is good for the individual than he himself knows’,119 this is a belief in the ‘privileged point of view on the world’. But the planners, the ‘Führers and the Duces are neither God nor God’s vicars’.120 A state whose members do not acknowledge that ‘one rule’, namely, ‘to do whatever seems at the moment to be expedient’ in Duces’ eyes, is ‘a state without law’.121 Liberty and change Ortega y Gasset writes: Living does not mean entering a place we have previously chosen, as we do for the theater after dinner. It means finding ourselves suddenly and without knowing how, thrown into, immersed in and projected into a world […] this world. Our life is a perpetual surprise. It is an existence without previous consent. We are shipwrecked in a universe we have not chosen.122 We are all ‘shipwrecked’. There is no one who does not share this condition of ‘original ignorance’. 123 Awareness of this helps us cooperate with others; above all, it protects us from ourselves, from our presumption and from the destructive claim that one of us can act as a ‘privileged’ source of knowledge. Robert Nozick has made a long list of famous people who could be asked to provide us with a plan for an ideal society.124 And yet: which one should be chosen? And what should the characteristics of this society be? Nozick says: ‘The idea that there is one best composite answer to all of these questions, one best society for everyone to live in seems to me to be an incredible one’.125

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He continues: ‘the idea that, if there is one, we now know enough to describe it is even more incredible’.126 The difficult struggle man has been involved in since the time of ancient Athens is among those who consider themselves ignorant and fallible, and thus believe there must be free social cooperation, and those who fear liberty and fight it in the name of superior knowledge, of which they declare themselves to be the bearers. Recognition of our ignorance and fallibility has taught us tolerance and made it possible for people with different philosophical and religious world-views to live together. It has brought us to the egalitarian theory of reason and juridical-formal equality, where general abstract norms define the limits of our actions but we are left to choose the content of our life. It is a habitat that recognizes fallibility, so it permits us to explore the unknown and correct our errors. Private ownership and the market bring economic development; democracy produces political development; and critical discussion leads to an increase in our rationality. In other words, we need comparison and competition. At the same time, this habitat allows us to avoid intellectualistic hubris and find new solutions by mobilizing our knowledge. Therefore, our problem is an ‘ecological’ one;127 we must create an institutionalnormative context that permits us to live by competition. As we know, Solon had already understood that we need liberty, because we are ignorant.128 In our time, Hayek brings up the question repeatedly and stresses that we cannot explore the unknown and correct our errors unless we have free institutions.129 Despite his juridical positivism, Kelsen states that the ‘cause of democracy becomes desperate if we begin with the idea that we can know absolute truth and understand absolute values’.130 He adds that ‘relativism is the world-view that the idea of democracy implies’, since ‘democracy considers the political will of everyone equal and respects all political beliefs’. 131 In other words: ‘majority rule, which characterizes democracy, is different of any other kind of government because, by definition, it presupposes an opposition—the minority—but also because it recognizes this opposition politically and protects its fundamental rights by means of fundamental freedoms’.132 When Bartley acutely observes that ‘knowledge is a primary component of capital and epistemology is the economics of knowledge’,133 he wants to show that competition cannot be renounced. All these positions make it clear that there must be free social cooperation. Apropos, the following reflections of Adam Smith still offer convincing explanations:


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The sentence with which the elder Cato is said to have concluded every speech which he made in the senate, whatever might be the subject, ‘It is my opinion likewise that Carthage ought to be destroyed’, was the natural expression of the savage patriotism of a strong but coarse mind, enraged almost to madness against a foreign nation from which his own had suffered so much. The more humane sentence with which Scipio Nasica is said to have concluded all his speeches, It is my opinion likewise that Carthage ought not to be destroyed,’ was the liberal expression of a more enlarged and enlightened mind, who felt no aversion to the prosperity even of an old enemy […]. France and England […could not] envy the internal happiness and prosperity of the other, the cultivation of its lands, the advancement of its manufactures, the increase of its commerce, the security and number of its ports and harbours, its proficiency in all the liberal arts and sciences […]. These are all real improvements of the world we live in. Mankind are benefited, human nature is ennobled by them. In such improvements each nation ought, not only to endeavour itself to excel, but from the love of mankind, to promote, instead of obstructing the excellence of its neighbours.134 This means that with liberty, which is a ‘procedure of discovery’, we improve our conditions of life through change. Objections are always raised by all those who grant ‘protections, favors, and privileges’,135 and by those who aspire to a superior social rank, which they snatch, one and for all, with no competition. From its first appearance in Athens, the open society has always provoked the same reactions. It is a radical break from the tribal past; it is the real, great revolution of humanity. Consequently, all movements to suppress liberal society are counter-revolutions, no matter what they are called or what ideals they use to hide their real objectives.136 Plato is the one who best theorized the first reaction to the open society. As we have seen, he was inspired by the systems of Crete and the Sparta of Lycurgus who, in turn, repeated the measures also in force in ancient Egypt. Plato tried to reinstate tribalism, by means of a model of society inspired by ‘oriental despotism’. This explains why Jaeger, though not completely aware of the gravity of the problem, maintained that ‘in Plato’s Republic Hellas produced a bold ideal worthy to be matched with the priestly theocracy of the Orient’. 137 The fact is that with the idea of the divine origin of

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knowledge Plato perfected the ‘first philosophical theodicy’, a religion that, though in contrast with the old popular beliefs, is a ‘modus deum cognoscendi et colendi’. 138 Totalitarianism was born from the presumptuous science of Good and Evil and faith in a republic of the virtuous. The ‘philosophers’ of Plato, the goddess of reason of the ‘philosophes’, the ‘industrialists’ of Saint-Simon, Hegel’s ‘general class’, Comte’s ‘scientific class’, Marx’s ‘proletariat’, the class ‘sui generis’ of Durkheim, and Hitler’s ‘race’ all aspire to an ‘architectonic science’ of society in which each citizen ‘can have no more freedom than a soldier in the army’.139 This is the militarization of society. The virtue of the ‘hero’ opposes the corruption of the ‘merchant’. However, when the ‘privileged point of view on the world’ eliminates the control made possible by liberty, there are fewer conditions to prevent men from doing the worst when they are at their worst. We often forget this, because we do not realize that civilization not only gives us direct advantages, of which we may also be uncertain, but also permits us to avoid some very sad ‘failures’. We do not imagine that ‘the worst’ man can do, when we renounce the institutions of liberty and entrust ourselves to the presumed omniscience of someone, includes all possible kinds of degradation, infamy and bestiality.

Notes

1 Introduction 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Hayek (1949), pp. 1–32. Hayek (1982), vol. 2, p. 20. Burckhardt (1929), vol. 1, p. 267. Weber (1991), p. 148. Ibid. Burckhardt (1929), vol. 1, p. 459. Op. cit., pp. 460–1. Plato (L), 909 d–e. Op. cit., 910 c–d. Op. cit., 907 e. Op. cit., 704 e. Op. cit., 705 a. Jaeger (1948), p. 275. Ortega y Gasset (1948), p. 13. Hayek (1982), vol. 1, p. 36. Constant (1822), p. 36. Op. cit., p. 39. Constant (1988a), p. 175. Ibid., my italics. Op. cit., p. 176. Op. cit., p. 292. Tocqueville (1994), vol. 2, p. 34. Op. cit., pp. 108–9. Op. cit., pp. 121–4. Op. cit., p. 111. Hayek (1982), vol. 1, p. 37. Tocqueville (1994), vol. 2, p. 110. Ibid.

2 The liberty of the ancients compared with that of moderns 1 Constant (1988b). 2 Meyer (1895).

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9 10 11 12 13 14

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Popper (1966). Acton (1877), Leoni (1991). Constant (1988b), p. 312. Op. cit., pp. 315–6. Op. cit., p. 327. The thesis of Rodbertus (1865) and Bücher (1912) was taken up again by Max Weber, who wrote (1976, p. 394): ‘In Antiquity […] the development of international trade was connected with the consolidation of unfree labour in large slave households. Therefore, the exchange economy was a sort of superstructure; beneath it was a constantly expanding infrastructure of natural economy in which needs were met without change.’ The historical ‘break’ represented by Athens escapes Weber (1968, vol. 3, pp. 1343–9), who is not capable of emphasizing the profound differences between the polis of Athens and Sparta. Nevertheless, Weber sees the economy organized on the principle of òikos as ‘state socialism’ (1976, pp. 37–79) and relates the lack of political liberty to the lack of economic liberty. Meyer (1895), p. 710. Meyer even maintains that in Athens industry and commerce were as important as they were in England in the eighteenth and nineteenth centuries (op. cit., p. 726). Op. cit., p. 712. Op. cit., p. 714. Op. cit., p. 717. Op. cit., p. 726. Ibid., note 1. Here Meyer states that Athenian and Roman cosmopolitanism influenced Christianity. It is worthwhile to cite what Ehrenberg says on the subject (1969, p. 249): ‘Within the widespread mixture of Greeks and Orientals, the relations between Greeks and Jews deserve special mentioning […]. Influence was at first small and one-sided, from the Greeks upon Jews; of the latter the upper classes were Hellenized. Influence the other way round cannot be denied, though Jewish and later Christian universalism largely grew from Greek roots’; see also Ehrenberg (1951), p. 164. Popper (1966, vol. 1, p. 176). It is useful to recall here that Ortega y Gasset (1960b, p. 411), who was also one of the beneficiaries of Meyer’s historical research, wrote: ‘Greek culture, if we call so what goes to make up our “classicism”, began long before in the colonies. Above all, science and philosophy were originally a colonial adventure’. Apropos of this, Jaeger (1965, pp. 99–100) specifies: ‘Their [of Ionians] work in the development of the Greek spirit was to set the individual free—and it was so even in political life. In general, then, the Ionian colonies were incapable of co-ordinating the energies of their free individual citizens, and of using them to strengthen their own power; but it was Ionia which first released the political forces which, in the firmer framework of the mainland Greek cities, helped to create a vitally new ideal of the state’. And Russell (1947, p. 20) maintains: ‘What may be called in a broad sense, the Liberal theory of Politics is a recurrent product of commerce. The first known example of this was in the Ionian cities of Asia Minor,

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which lived by trading with Egypt and Lydia. When Athens […] became commercial, the Athenians became Liberal […]. The reasons for the connection of commerce with Liberalism are obvious. Trade brings men into contact […], and in so doing destroys the dogmatism of the untravelled’. See also Kirk (1974) pp. 276–9. Popper (1966, vol. 1, pp. 177–8). Regarding the fact that the inhabitants of Piraeus were ‘more’ democratic than ‘those of the city’, see also Aristotle (C), 5, 3, 1303b. It is helpful to point out here that Fustel de Coulanges (1980, p. 320) considers Athens the same as other Greek cities and maintains that ‘the Greeks did not have a clear idea of liberty; individual liberty never had any guarantee among them’. Nevertheless, Fustel de Coulanges writes: ‘the cities were almost always brought to the strait of putting arms into the hands of the lower orders. It was in this way that at Athens, and in all the maritime cities, the need of a navy and the battles upon the water gave the poor classes that importance which the constitution refused them. The Thetes raised to the rank of rowers, of sailors, and even of soldiers, and holding in their hands the safety of their country, felt their importance, and took courage. Such was the origin of the Athenian democracy’ (op. cit., pp. 318–9). Fustel de Coulanges admits also that in Sparta eloquence was unknown, while in Athens ‘men reflected and weighed reasons. Discussion was necessary’ (op. cit., p. 324). Moreover, he writes: ‘The aristocracy of wealth had another merit; it impressed upon society and the minds of men a new impulse. Having sprung from labor in all its forms, it honored and stimulated the laborer. This new government gave the most political importance to the most laborious, the most active, or the most skillful man […] made instruction the first need, and intelligence the most powerful spring of human affairs. We are not, therefore, surprised that under this government Greece and Rome enlarged the limits of their intellectual culture, and advanced their civilization’ (op. cit., pp. 316–7). Nevertheless, it should be stressed that Fustel de Coulanges attributed the ‘opening’ of Athens to warfare. This could more appropriately be said of Rome. We shall deal with this point later on. Thucydides (A), II, 38. Polanyi (1977), pp. 172–3. Op. cit., p. 167. Op. cit., p. 165. Finley (1958), pp. 26–7. Thucydides (A), II, 40. In reference to this, it should be mentioned that in the Acts of the Apostles (17), where St Paul speaks of Athens, he stresses that ‘the Athenians in general and the foreigners there had no time for anything but talking or hearing about the latest novelty’. This is an affirmation of the method of critical discussion. Thucydides (A), II, 37. Ibid. Glotz (1996), p. 128. Op. cit., p. 129. Pohlenz (1947), p. 116.

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29 Glotz (1996), p. 130. In this connection, it is also helpful to recall what Pohlenz (1947, p. 116) writes: ‘every citizen must maintain his freedom to think and to act independently and to express his opinion, while the state should intervene as little as possible in the private life of individuals’. 30 Constant (1988b), pp. 314–6. 31 Popper (1966), vol. 1, p. 181. 32 Meyer (1895), p. 711. In reference to the same subject, Thomson (1950, p. 200) wrote: ‘The industrial development in Attica had been hampered in its early stages by shortage of labour. That […] is why Solon […] passed laws against idleness and encouraged the immigration of foreign artisans. These immigrants […] could acquire civic rights by obtaining admission to the phratries’. 33 Thucydides (A), II, 39. 34 Ehrenberg (1951), p. 9. Ehrenberg (op. cit., p. 8, note 1) quotes also the following statement of Burckhardt: ‘Aristophanes, welcher, sobald er von bestimmten Einzelnen redet, der stärkste Verleumder sein darf, kann, wo er Handlungsweisen überhaupt schildert, nur Sachen gesagt haben, welche jedermann kannte und kenntlich fand’. In reference to the plays of Aristophanes as a source for the economic life in Athens, see also Nicosia (1935). 35 Ehrenberg (1951), p. 37, my italics. Ehrenberg (op. cit., p. 42) states: ‘There is a telling story reported in the two anonymous Lives of Aristophanes that the tyrant Dionysios wanted to know all about politeia of Athens, that is to say, its people and its institutions, and that Plato sent him the plays of Aristophanes’. 36 Op. cit., p. 138. 37 Op. cit., p. 141. 38 Op. cit., p. 141. Ehrenberg (op. cit., p. 219) adds: ‘Money appears in its real function, as the permanent and necessary basis of life for every individual human being. We are left in no doubt that money was in fact the basic factor in Athenian economy’. 39 Op. cit., p. 133. 40 Op. cit., p. 127. 41 Op. cit., p. 149. 42 Op. cit., p. 160. 43 Op. cit., p. 150. 44 Op. cit., pp. 161–2. Ehrenberg also stresses that it is ‘a historical fact that these leading politicians belonged to the middle class of businessmen. They gradually displaced the aristocratic leaders, the men from the great houses’ (op. cit., p. 120). 45 Op. cit., p. 152. 46 Ibid. 47 It should be mentioned here that the exchanges accepted by the market obviously required contractual freedom, which will be discussed more fully later in this chapter. What must be pointed out now is that contractual freedom exists in a normative habitat; namely, it requires a more profound rule, which we will discuss in the next section. 48 Acton (1877), p. 9.

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49 Op. cit., p. 10. 50 Ibid., my italics. It is helpful to recall what Fustel de Coulanges (1980, p. 306) writes on this subject: The code of Solon […] corresponded to a great social revolution. The first peculiarity that we remark in it is that the laws are the same for all. They establish no distinction between the Eupatrids, the simple free men, and the Thetes […]. Solon boasts in his verses of having written the same laws for the great and the small’. 51 Acton (1877), p. 10. 52 Op. cit., p. 11. 53 Op. cit., p. 12. 54 Ibid. 55 Op. cit., p. 14. 56 Leoni (1991), p. 4. 57 Ibid. 58 Op. cit., p. 9. 59 Leoni points out how prices also originate from ‘the convergence of spontaneous actions and decisions on the part of a vast number of individuals’ (op. cit., p. 10). Leoni here is obviously indebted to Mises, who will be discussed in Chapter 6. 60 Op. cit., pp. 78–9. Leoni adds: ‘Of course, proponents could freely argue before the general legislative assembly against the nomotetai in order to support their own bills, so that the whole discussion must have been based more on a comparison between the old and the new law than on a simple oration in favor of the latter. But this was not the end of the story. Even when the bill had been passed at last by the assembly, the proponent was held responsible for his proposal if another citizen, acting as a plaintiff against the proponent himself, could prove, after the law had been approved by the assembly, that the new legislation had the same grave defects or that it was in irremediable contradiction with older laws still valid in Athens’. 61 Op. cit., p. 88. 62 Ibid. For a more complete reading of the passage, see Cicero (A), II, 1. 63 Jhering (1915), p. 2. 64 Jaeger (1965), p. 102. 65 Op. cit., pp. 102–3. 66 Op. cit., p. 103. 67 Ibid. See also Jaeger (1947), pp. 352–72. 68 Hesiod (A), 85. 69 Hesiod (B), 35–40. 70 Op. cit., 320–35. 71 Op. cit., 270. 72 Op. cit., 310. 73 Op. cit., 345. For more about Hesiod as ‘discoverer’ of scarcity, see also Polanyi (1977), p. 149. 74 Jaeger (1994), p. 19. For a comparison of Hesiod and Solon, see also Masaracchia (1958), p. 217. 75 Jaeger (1965), p. 99 and p. 442, note 20. 76 Solon (A), 36.

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77 Ferrara (1964), p. 94. 78 Solon (A), 16. Solon’s awareness of human ignorance is shown by the following passage from Plutarch (A, 2, 2): ‘others assure us that he travelled rather to get learning and experience than to make money. It is certain that he was a lover of knowledge, for when he was old he would say that “each [he] day grew older, and learnt something new”’. 79 Plutarch (A), 14,8. It is useful to refer to the following passage from Aristotle (D,11): ‘the common people had believed that he would bring about a complete redistribution of property, while the nobles had hoped he would restore the old order or at least make only insignificant changes. Solon, however, set himself against both parties, and while he would have been able to rule as a tyrant if he had been willing to conspire with whichever party he wished, he preferred to antagonize both factions while saving the country and giving it the laws that were best for it, under the circumstances’. 80 Plutarch (A), 15, 1. 81 Solon (A), 16. 82 Plutarch (A), 15, 2. 83 Op. cit., 18,7. Apropos, Pericles said: ‘we respect the authorities and laws, especially those which are ordained for the protection of the injured as well as those unwritten laws which bring upon transgressor admitted dishonor’ (Thucydudes, A, II, 37). 84 Plutarch (A), 25, 6. 85 Leoni is a particularly strong supporter of the idea of certainty of the law in Athens and Rome (1991, pp. 76–94). 86 Ferrara (1964), p. 104. 87 Solon (A), 4. 88 Ibid. 89 Ferrara (1964), p. 79. 90 Solon (A), 11. 91 Op. cit., 9. 92 Cf. note 63 above. 93 Solon (A), 36. 94 Jacoby (1949), p. 38. 95 Ehrenberg (1969), p. 244. See also Ehrenberg (1996), pp. 50–76. It is worthwhile here to quote the following passage from Gundert (1942, p. 150): Solon contributed ‘the idea which made it really possible to form the polis […], the idea of law, of Dike’. On the same subject, G.De Sanctis (1939, vol. 1, p. 483) writes: ‘[…] nor were many ancient or modern legislators as even tempered or humane as he was or as respectful of the dignity of the individual and the sanctity of the law’. For an outstanding juridical treatment of Solon’s work, see also Cantarella (1957), pp. 837– 45. 96 Constant (1988b), pp. 321–3. 97 Op. cit., p. 311. Cf. also Ortega y Gasset (1960b), pp. 413–7. 98 Constant (1988b), p. 311. 99 Ibid.

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100 Op. cit., pp. 311–2. 101 Fustel de Coulanges (1980), p. 213. Unfortunately, the episode recounted by Fustel de Coulanges was repeated in the totalitarian regimes of the twentieth century. 102 Constant (1988b), p. 317. 103 I am using an expression of Ortega y Gasset (1957), pp. 79–98. In reference to the same subject, Scheler (1954, p. 88) wrote: ‘Man becomes more of an animal by associating himself with the crowd, and more of a man by cultivating his spiritual independence. Thus everything that tends to promote an absolutely collective existence […] will tend to make the individual more of a hero, and at the same time more of a clod, in that it stultifies as a spiritual personality’. 104 I am using Spencer’s expression (1884), p. 46. 105 The dissenter is considered an external enemy and becomes the ‘scapegoat’ for any failure of the group in power. Social life is ‘interpreted’ by means of a ‘conspiracy theory of society’. See Popper (1966), vol. 2, p. 94. 106 I am using Weber’s expression (1968), vol. 3, p. 1360. 107 Plutarch (B), 4,1. Herodotus (A,I,65) recounts ‘that it was from Crete that Lycurgus brought’ the legislation of Sparta. 108 Plutarch (B), 4,4. 109 Op. cit., 4,7. 110 Op. cit., 5,4, where it is possible to read the following passage: ‘he goes to Delphi to consult Apollo there; which having done, and offered his sacrifice, he returned with that renewed oracle, in which he is called beloved of God, and rather God than man; that his prayers were heard, that his laws should be the best, and the commonwealth which observed them the most famous in the world’. 111 Op. cit., 8,1–9. 112 Rostovtzev (1926), p. 210. 113 Op. cit., p. 211. 114 Op. cit., pp. 211–2. 115 Popper (1966), vol. 1, p. 172. To corroborate what Popper says, we should add that militarism exists in symbiosis with the hero and with charismatic power. This, as Weber says (1968, vol. 3, p. 1115), ‘knows no abstract laws and regulations and no formal adjudication’. There is a ‘privileged point of view on the world’, a situation in which objective law flows from the highly personal experience of divine grace and god-like heroic strength and rejects all external order solely for the sake of glorifying genuine prophetic and heroic ethos’ (ibid.). In reference to the same subject, Ortega y Gasset (1960a, p. 140) writes: ‘Only closed, selfcontained populations, whose life is confined and geared toward themselves, have […] a temperature […] high enough to heat plain and simple reality and make it incandescent […] by transforming it into mythological fulguration’. This is exactly what did not happen in Athens, where ‘the picture of the gods which the comic poets paint reveals a profound and moving disillusionment. “Myth did perish”’ (Ehrenberg, 1951, p. 266).

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116 This is also shown by the totalitarian regimes of the twentieth century. 117 The word ‘refuge’ is Constant’s (1988b), p. 318. Perhaps it is not by chance that in Greek philosophy, which was produced by a society that recognized individualism, ample space was reserved for the idea of the ‘soul’. See also Polanyi (1977), p. 147. 118 Jaeger (1965), p. 95. 119 Ibid. 120 Ehrenberg (1969), p. 245. 121 Op. cit., pp. 244–5. 122 Op. cit., p. 245. 123 Popper (1966), vol. 1, p. 176. 124 Palmer (1950), pp. 149–68. Biscardi (1982, p. 354) comments on Palmer’s view: ‘Thus, we immediately come upon the acceptable idea of law as a limit to the claims of individuals’. In addition, Biscardi (op. cit., pp. 355–6) rightly points out that this is equivalent to a liberation from the ‘principle of heteronomy’ of closed societies. 125 Paoli (1976), pp. 461 and ff. 126 Demosthenes (A), 208–14. 127 Biscardi (1982), p. 11. Cf. also Paoli (1933), pp. 177–86. 128 Jhering (1965), p. 440. On this subject, there is a very significant essay by Paoli (1976, pp. 31–78) on Comici latini e diritto attico. 129 Ibid. 130 This also led to an attempt to overcome the ‘crisis’ caused by the ‘opening to the world’ by turning to an imperial solution, which concealed a serious form of illegitimacy, because ‘legally and constitutionally the emperors received their power from the hands of the senate and people of Rome. In actual fact, the principate of the successors of Augustus depended on the good-will of the army’ (Rostovtzev, 1957, vol. 1, p. 77). See also Ferrero (1921, vol. 1, pp. 1–74) ; Ortega y Gasset (1941b, pp. 53–107; 1960a, pp. 148–55). 131 Cicero (D), 146. 132 Maine (1977), p. 196. 133 Op. cit., p. 100.

3 The gnoseological roots of liberty and tribalism 1 2 3 4 5 6 7 8 9 10 11

Cf. note 81 of the previous chapter. Solon (A), 3. Cf. note 86 of the previous chapter. Cf. note 90 of the previous chapter. It is an expression of Constant: cf. note 7 of the previous chapter. Cf. note 23 of the previous chapter. Cf. note 25 of the previous chapter. Popper (1966), vol. 1, p. 189. Plato (C), 320 d. Op. cit., 320 d–e. Op. cit., 321 c.

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12 The idea of using technology to compensate for insufficient natural traits was developed in more recent times by Scheler (1973), Ortega y Gasset (1939) and Gehlen (1988). 13 Plato (C), 322 b–c. 14 Protagoras (A), 1. 15 Op. cit., 4. 16 Jaeger (1986), p. 119. 17 Op. cit., p. 38. The ‘confutatory’ part of Socrates’ work is what induced Antiseri (1999, p. 216) to consider the Socratic position the same as fallibility. There is also the ‘exhortative’ part, which will be referred to later in the text. 18 Popper (1966), vol. 1, p. 189. Obviously, Socrates’ criticism was so feared by the tyrants that, under the government of the Thirty, Critias and Charicles ordered Socrates to stop teaching. See Xenophon (A), I, 2, 31–8. 19 Popper (1966), vol. 1, p. 189. 20 Ibid. 21 Plato (A), 38 a. 22 Ibid. 23 I am adopting an expression used by Hayek in another context (1978) p. 23. 24 Plato (A), 22 c. Therefore, Socrates did not believe in the superiority of any professional occupation. He relied instead on the special knowledge connected with each profession. Xenophon (A, IV, 7, 1) says: ‘For I never knew a man who was so careful to discover what each of his companions knew. Whatever it befits a gentleman to know he taught most zealously, so far as his own knowledge extended; if he was not entirely familiar with a subject, he took them how far a well-educated man should make himself familiar with any given subject’. 25 Plato (A), 23 b, where Socrates adds: ‘that is why I still go about even now on behalf of the God, searching and inquiring among both citizens and strangers, should I think some one of them is wise; and when it seems he is not, I help God and prove it’. 26 Op. cit., 19 b–c. 27 Popper (1999), p. 84. 28 Plato (A), 35 c. 29 Plato (B), 53 c. Socrates’ respect for the law is confirmed in this incident recounted by Xenophon (A, I, 1,18): ‘For instance, when he was on the Council and had taken the counsellor’s oath by which he bound himself to give counsel in accordance with the laws, it fell to his lot to preside in the Assembly when the people wanted to condemn Thrasyllus and Erasinides and their collegues to death by a single vote. That was illegal, and he refuted the motion in spite of popular rancour and the threats of many powerful persons. It was more to him that he should keep his oath than that he should humour the people in an unjust demand and shield himself from threats’. The episode is also mentioned in Plato (A), 32 b. 30 It is here useful to recall what Calamandrei writes (1933, p. XXVII): ‘At the heart of Greek history, there is a trial, in which an innocent person

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31 32 33 34 35

36 37 38 39

40 41

42

Notes

rises to defend the sanctity of the sentence that unjustly condemned him to death. The noblest words ever pronounced about the intangibility of sentences and the most convincing apology ever offered for the political needs that require an unjust sentence to be carried out, come from that prison where Socrates, by refusing to flee from punishment, sublimely expresses that principle and bears witness to it with his sacrifice’. Plato (A), 31 e. See also Maier (1978, vol. 1, pp. 100 and ff.), Jaeger (1986 pp. 62–3) and Popper (1966, vol. 1, pp. 29–30 and 306–13). Xenophon (A), I, 2, 61–2.. Op. cit., I, 2, 64. Scheler (1923), p. 250. Obviously, the tragedy would not be possible ‘in a world that was a part of an “ethical, cosmic order”, in a world in which human powers were directed according to the needs of unification and harmony’ (ibid.). And it is also obvious that ‘a ‘satanic’ world would suppress the tragic, neither more nor less than a divine world’ (ibid.). Ortega y Gasset (1960a) pp. 414–5, my italics. In reference to liberty as a possibility of choice, see also Minogue (1968), pp. 165–81.. Popper (1966), vol. 1, p. 187. Meyer (1895), pp. 27–8. op. cit., p. 28, my italics. It is worthwhile recalling what Popper says about this (1966, vol. 1, p. 188): ‘Unwilling and unable to help mankind along their difficult path into an unknown future which they have to create for themselves, some of the educated tried to make them turn back into the past. Incapable of leading a new way, they could only make themselves leaders of the perennial revolt against freedom. It became the more necessary for them to assert their superiority by fighting against equality as they were […] incapable of that simple and ordinary generosity which inspires faith in men, and faith in human reason and freedom’. Plato (C), 357 a. Op. cit., 357d, but already in 345 e. See also Plato (E) and Plato (G). In the former case (87 d) we find: ‘if there exists any good thing different from, and not associated with knowledge, virtue will not necessarily be any form of knowledge. If on the other hand knowledge embraces everything that is good, we shall be right to suspect that virtue is knowledge’. Later, (in 88 c) science is considered the same as happiness: ‘everything that human spirit undertakes or suffers will lead to happiness when it is guided by wisdom, but to the opposite, when guided by folly’. And the science of choice as the science of good is an idea that is also found in the Republic: ‘it should be our main concern that each of us, neglecting all other studies, should seek after and study this thing—if in any way he may be able to learn of and discover the man who will give him the ability and the knowledge to distinguish the life that is good from that which is bad, and always and everywhere to choose the best that the conditions allow’ (Plato, G, 618 c). Plato (C), 361 b.

Notes

43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68

69 70 71 72 73 74

75

161

Plato (F), 118 a. For a more detailed discussion, see Popper (1966), vol. 1, pp. 301–2. Plato (E), 81 b. Plato (F), 76 e. Op. cit., 75 a. Op. cit., 76 e. Plato (G), 507 b. Plato (F), 76 a. Plato (G), 478 a. Op cit., 480 a. Op. cit., 514 a–b. Op. cit., 515 b. Op. cit., 515 a. Op. cit., 518 c. Op. cit., 518 c. Jaeger (1986), p. 295. Plato (G), 497 b. Op. cit., 497 b–c. Plato (I), 79 a. Plato (L), 716 c. Plato (G), 473 c–d. Op. cit., 511 b. Jaeger (1986), pp. 158–9. Op. cit., p. 285. Ortega y Gasset (1941c), p. 531. Op. cit., p. 533. On the same page, Ortega y Gasset says that this belief is characterized by the ‘absolutism’ of ‘pure trust’ in ‘definitive knowledge’. ‘Only what is science of the immutable, and therefore is itself immutable, is knowledge’. For a fuller criticism of ‘Eleaticism’, see also Ortega y Gasset (1941a). Plato (G), 500 d. Op. cit., 500 c. Op. cit., 501 a. Ibid. Plato (L), 735 b–c. Op. cit., 735 d–e, italics added; see also 736 a–b–c. It is also useful to quote the following passage: ‘They may purge the city for its better health by putting some of the citizen body by sending off colonies like bees swarming off from a hive, or they may bring people in from other cities and naturalize them so as to increase the number of citizens. So long as they work on a reasoned scientific principle following essential justice and act to preserve and improve the life of the state so far as may be, we must call them real statesmen according to our standards of judgement and say that the state they rule alone enjoys good government and has a real consitution’ (Plato (H), 293 d–e). Therefore, the Platonic Republic is different from Athens and is not ‘open to the world’. As we shall see, the model followed is that of Sparta. Plato (G), 462 d.

162

76 77 78 79 80 81 82

83 84 85 86 87 88 89 90 91 92 93 94 95 96 97

98

99 100 101

Notes

Ibid. Op. cit., 462 c. Op. cit., 416 d–e, 417 a, my italics. Op. cit., 459 d–e. Op. cit., 459 e. Op. cit., 460 a. Op. cit., 460 b. If we also consider that the age for marriages was established by the state (op. cit., 460 d–e) and that the idea is to improve the race (op. cit., 459 a–c), we can understand that, as will be clearer later, we are here faced with true eugenetic prescriptions. Op. cit., 460 b. Op. cit., 460 c. Op. cit., 460 d. Which, as Plato says (op. cit., 423 b) jeopardizes its ‘unity’, namely the centralized government. Op. cit., 372 d. Xenophon (C), VII. Plutarch (B), 24, 3. Op. cit., 19, 10. Xenophon (C), I. Cf. also Plutarch (B), 15, 12. Xenophon (C), I. Cf. also Plutarch (B), 15, 13. Plutarch (B), 16, 7. Op. cit., 16, 2. Op. cit., 9, 4 and 27, 7. Op. cit., 27, 6. In fact, Plutarch says (op. cit., 24, 1, my italics): ‘Their discipline continued still after they were full-grown men. No one was allowed to live after his own fancy; but the city was a sort of camp, in which every man had his share of provisions and business set out, and looked upon himself not so much born to serve his own ends as the interest of his country’. Apropos of the communism of Sparta, see Pöhlmann (1912) vol. 1, pp. 75–99). Moreover, the requirement in the Republic of making the ‘boys spectators of war’ (467 c) originates with Tyrtaeus, as we see in Laws (624 e, 661 a); see also Jaeger (1986, p. 409, note 270). See Chapter 2, pp. 25–9. In Plato we find: Minos ‘ordained for his people these very laws, which have made Crete happy through the length of time, and Sparta happy also, since she began to use them; for they are divine’ (Plato, (M), 320 b). Plato (L), 683 a. Op. cit., 799 a. In the Egyptian system, there was a lack of private property, the state pervaded all aspects of life, and it was inconceivable to have a personal life separate from the official or public one. I am using the expression ‘Oriental despotism’ as Wittfogel (1957) does, when he speaks of the ‘hydraulic civilizations’, which included Egypt. Because of the huge ‘hydraulic’ works, the state was, in these systems, the only owner of the land and means of production. From the eighteenth century on, the expression ‘Asiatic society’ was used to refer to this type

Notes

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103 104 105 106

107 108 109 110 111 112 113 114 115

116 117 118 119 120 121 122 123 124

163

of social order. If we use Wittfogel’s schema, we can say that modern socialism is nothing more than an ‘Asiatic restoration’. Though Marx and Engels were critical of the ‘Asiatic mode of production’, they proposed it again as a way of overcoming western capitalistic systems. On the connection between private property and freedom, see Chapter 4. For the influence of Critias on Plato, see Jaeger (1986), p. 248; and Popper (1966), vol. 1, p. 187. The idea that, in order to make critical discussion and political liberty impossible, it is necessary to prevent economic freedom is also found in the utopias of Hippodamus of Miletus and Phaleas of Chaledon, whom Aristotle speaks of in Politics. Meyer (1895, p. 28, note 1) maintains that the ‘ideal’ of these utopias, like all of the ‘reactionary theory’, was the constitution of Sparta. Pöhlmann (1912, vol. 1) also agrees that these projects were profoundly anti-democratic. Plato (G), 369 b–c. See note 105 of Chapter 2. Plato (L), 903 b–c–d, italics added. The idea that individuals are subjected to a state of intellectual and moral minority, while the sapient minorities embody everything, is the basis of twentieth-century totalitarian experiences. The passage from Plato shows how deep the roots of this idea are and how in more recent times it has generated the so-called ‘sociologistic theorem’, according to which the whole is greater than the sum of its parts. When examined closely, this means that one part is superior to the others and must have a greater value than they do. For a wider discussion of this point, with reference to Rousseau, Hegel, Comte, Marx and Durkheim, see Infantino (1998a). It is not by chance that, in the Republic (506 e), we find: ‘let us dismiss for the time being the nature of good in itself. Plato (G), 558 c. Plato (L), 757 a. Plato (D), 486 a–b. Op. cit., 503 c–d Op. cit., 485 a. Thucydides (A), II, 40. Plato (A), 33 a. This idea was far from the thought of Democritus (A, 247), who said: ‘I would rather find a single causal law than be the king of Persia!’. Using German terminology, the Sophists can be compared to Privat-Dozenten, paid exclusively by those who seek them out. Popper (1966) vol. 1, p. 120. Ibid. Antiseri (1995), p. 20. Popper (1966), vol. 1, p. 121. Ortega y Gasset (1958), p. 156. Aristotle (A), II, 19, 100 a–b, 15–2. Aristotle (B), VI, 3, 2. Aristotle (A), II, 19, 100 b, 8–10. Popper (1991), p. 151. Jaeger (1948, p. 261) says that Aristotle’s political doctrine ‘presupposes Plato’s later theory of Ideas’.

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125 Aristotle (B), I, 2, 1–2. 126 Op. cit., I, 2, 4–8, my italics. For the prescriptive nature of the laws, see also op. cit., V, 3. 127 Plato (H), 259 e, 260a. 128 Aristotle (C), I, 5, 1260 a, 7, my italics. Jaeger (1948, p. 275) correctly writes: ‘Aristotle is by no means subordinating the state to the welfare of the individual, as a liberal would do, but is deriving, as Plato does, the categories for judging the value of the state from ethical standards that apply to the soul of the individual’. 129 Aristotle (B), I, 13, 1–3. 130 Aristotle (C), III, 8, 1284a, 1–2. In this passage from Politics, it would seem that the political man must be a philosopher. However, in Nicomachaen Ethics (X, 7, 1) Aristotle asserts that ‘intellect’ is ‘the divinest part of us’, free of all obligations, which is not true of political activity. Consequently, the philosopher, who is the possessor of true knowledge, must indicate to the politician the purpose of the action. 131 Aristotle (C), VII, 1326 a, 4, 5. It is here useful to add that Aristotle (C, 1076a) shares Homer’s idea, according to which ‘the rule of many is not good: let one be the ruler’. 132 Op. cit., VII, 4, 1326b, 7. 133 Op. cit., I, 3, 1256 b, 9. 134 Op. cit., I, 3, 1257 a, 12. 135 Op. cit., I, 3, 1257 a, 13. 136 Op. cit., I, 3, 1257 a, 10. It should be pointed out that the expression ‘chrematistics’ had already been used by Plato in Gorgias (477 e), where he asserts that ‘chrematistics’ liberates people from poverty. And yet Plato adds that, among chrematistics, medicine and justice, the latter is the most important (478 b). Therefore, it is essential that the political power rigidly control economic activities. 137 Aristotle (C), I, 3, 1256 b, 9. In keeping with the condemnation of ‘chrematistics’, there is also a condemnation of interest on loans (op. cit., I, 3, 1258 b, 13). 138 Op. cit., VII, 8, 1328 b, 1–2. 139 Op. cit., VII, 8, 1328 b, 2. 140 Op. cit., VII, 9, 1330 a, 9. 141 Op. cit., VII, 9, 1329 b, 1. 142 Op. cit., II, 1, 1261 b, 9. 143 Ortega y Gasset (1958), p. 239. 144 Aristotle (C), II, 2, 1263 b, 9. 145 Ibid. 146 Op. cit., I, 1, 1252 b, 8. However, complete awareness of the advantages of the division of labor is already found in Xenophon (B), VIII, 2, 5–6. 147 Op. cit., VII, 13, 1333 b, 12. 148 Op. cit., IV, 1, 1288 b, 2. 149 Op. cit., II, 5, 1269 a, 14. 150 Op. cit., VI, 3, 1320 a, 4. 151 Op. cit., IV, 4, 1292 a, 4.

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152 Op. cit., IV, 4,1292 a, 3. Cf. also IV, 5, 1293 a, 5. Moreover, see Aristotle (B), V, 10, 1134a, 3. 153 Aristotle (C), III, 6,1282 a, 10. In addition to the idea that every one of us is the best judge of his needs, it could be said that the so-called ‘consumer’s sovereignty’ includes the fact that each one possesses different information. This theme will be treated at length in the following chapters. 154 Op. cit., I, 3, 1257a, 11. 155 Aristotle (B), V, 5, 1133 a, 18–23. However, Aristotle adds (op. cit., V, 5, 1133 a, 32): money ‘exists not by nature but by law’, not taking into account that the monetary order is spontaneous and not constructed. 156 Aristotle (C), I, 1, 1252 a, 3. On Aristotle as a source for Menger’s ‘methodological individualism’, see Chapter 6. 157 Polanyi (1971), pp. 64–94. See also Berti (1993), pp. 298–9. 158 Simmel (1978), p. 114. 159 Op. cit., p. 116. 160 Popper (1979), p. 147. 161 For economic in a ‘strict sense’, I mean monetary exchange. See Mises (1981b), pp. 156–8. 162 Popper (1979), p. 148. 163 Op. cit., p. 147. 164 Aristotle (B), V, 8, 1129 a–1133 b. Jaeger (1948, pp. 259–92) maintains that Politics (from which we have taken the positions least hostile to the open society) contains various levels of writings that reflect an evolution in Aristotelian thought. This thesis is hard to accept, because parts Jaeger considers written at the same time contain contradictions. It seems more acceptable to say, as has been stated in the text, that Aristotle discovered economics but not the social process. This creates a permanent ‘confusion’ (Rothbard, 1996, vol. 1, p. 14); see also Schumpeter (1997, pp. 60–5). It should be added that this ‘ambivalence’ and perhaps also his ‘extreme sensuism’ (Ortega y Gasset, 1958, p. 165) made it possible for Aristotle to become the official philosopher of a Catholicism that did not want to (and could not) be ‘the abolition of the old Adam’. The expression ‘abolition of old Adam’ is from Passarin d’Entrèves (1952), p. 36. 165 We shall deal with this in chapter 5. 166 See note 131 of Chapter 2. 167 Livy (A), XXV, I. 168 Ortega y Gasset (1960a), p. 143. 169 Cicero (C), III, 10, 42. 170 Op. cit., III, 18, 73. 171 Op. cit., III, 15, 61. 172 Op. cit., III, 18, 75. 173 Ibid.. 174 Op. cit., III, 19, 75. 175 Ibid. 176 Op. cit., III, 19, 75–6. 177 Op. cit., II, 11, 40.

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178 See note 62 of Chapter 2. 179 Pohlenz (1959), vol. 2, p. 269. 180 On praise of the ‘wise man’, see in particular Cicero (C), III, 3, 14 and III, 4, 16–7. Cf. also Cicero (A), I, XXIX, where he says: ‘A wise man should be acquainted with these changes, but it calls for great citizens and for man of almost divine powers to foresee them when they threaten, and, while holding the reins of government, to direct their courses and keep them under his control’. Therefore, the politician imposes his will on the world. 181 Op. cit., III, 5, 23. 182 Cicero (A), I, XXXIV. 183 Op. cit., I, XXXVIII. Therefore, ‘what you have just mentioned was a great misfortune. For it was the institution of this office [Tribunate] that brought about the decline in the influence of the aristocracy and the growth of the power of the multitude’ (Cicero, B, III, VII). 184 Cicero (A), II, IX. 185 Cicero (A), III, fr. VI. 186 Cicero (B), I, XX. 187 Cicero (C), I, 42, 150. 188 Cicero (A), II, IV, my italics. To complete this, it should be remembered that Cicero (C, I, 20, 68) suggests that ‘there is nothing more honorable and noble than to be indifferent to money’.

4 The failure of psychologism and the question of private property 1 Spencer (1860), pp. 90–1. In his Principles of Sociology, Spencer (1921, vol. 1, p. 592) repeats the criticism he made in his essay of 1860. 2 Popper (1966), vol. 2, p. 93. 3 Grote (1867), vol. 3, p. 186. 4 Op. cit., p. 187. 5 Op. cit., vol. 1, p. XI; see also Zeller (1888), pp. 484–5. In Pohlenz’s (1966, p. 164) different assessment, there is no awareness of the social consequences of Plato’s theory of knowledge. 6 Grote (1867), vol. 1, p. VIII. For Grote’s work, it is helpful to see the extended comment of John Stuart Mill (1978), where among other things Mill says: ‘its [Plato’s] weak side is that it postulates infallibility, or something near it, in rulers […]; or else ascribes such a depth of comparative imbecility to the rest of mankind’ (op. cit., p. 436). 7 Plato (N), 340 c. 8 Kelsen (1938), p. 106. 9 Jaeger (1961), p. 66. 10 Parmenides (A), 1. 11 Jaeger (1964), p. 96, my italics. Apropos of Parmenides, it is also useful to recall what Popper (1991, p. 12) writes: ‘The revelation received by Parmenides, and his conviction that a few may reach certainty about both the unchanging world of eternal reality and the unreal and changing world of verisimilitude and deception, were two of the main inspirations of Plato’s philosophy. It was a theme to which he was for ever returning, oscillating between hope, despair, and resignation’.

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12 Ryle (1947), p. 169. Ryle’s assertion is stated in his review of Popper’s The Open Society and Its Enemies, a work which inflicted a hard blow on Platonism. See also Antiseri (1997). 13 Ortega y Gasset (1960b, p. 415) maintains that political revolutions begin with philosophy. As Ortega knew, philosophy came with the affirmation of the open society. Therefore, it is not critical reason that reacts against liberty, but its opposite: nostalgia for tribalism, which often adopts the name of philosophy to achieve its animistic projections. 14 Popper (1991), pp. 13–5. 15 Op. cit., p. 5. 16 Cited by Ortega y Gasset (1960a), p. 401. Apropos of Parmenides, see also Ortega (op. cit., p. 402). 17 Descartes (1960, p. 45). Hayek called attention to this passage repeatedly: cf. Infantine (1998a), p. 5. 18 Aristotle (C), I, 1252b, 8. 19 Op. cit., I, 3, 1280b, II. Also Plato refers to Lycophron in his Gorgias and Republic. See Popper (1966), vol. 1, pp. 116–19. 20 Locke (1924), p. 158. More exactly, men join together in society ‘for the mutual preservation of their lives, liberties and estates, which I call by the general name—property’ (op. cit., p. 180). 21 Op. cit., p. 159. 22 Op. cit., p. 160. 23 Op. cit., p. 180. See also p. 123. 24 To confirm this, it is useful to read more of Locke (1954, p. 111): ‘this law of nature can be described as being the decree of the divine will discernible by the light of nature and indicating what is and what is not in conformity with a rational nature, and for this very reason commanding or prohibiting. It appears to me less correctly termed by some people the dictate of reason, since reason does not so much establish and pronounce this law of nature as search for it and discover it as a law enacted by a superior power and implanted in our hearts. Neither is reason so much the maker of that law as its interpreter, unless, violating the dignity of the supreme legislator, we wish to make reason responsible for that received law which it merely investigates’. Correctly, Sabine (1963, p. 530) points out: ‘even if some moral values are admitted to be self-evident, it is far from obvious that they take the form of innate individual rights’. Leyden (1954, p. 46) writes: ‘Locke’s starting point is simple: it consists in the factual statement that men can reason […]. His next step […] is to show that men not only can reason but are obliged to use their reason, inasmuch as it, i.e. reason as the discursive faculty, is an essential property of theirs and their special function is to exercise this faculty […]. Thus the very question at issue, namely, whether or not reason is an essential quality of humanity, is decided affirmatively by reason itself. Moreover, it is from a merely factual statement concerning man’s essential nature that moral proposition is inferred that he has a duty to live in conformity with this nature’. Bobbio (1971, p. 36) notes that in Locke ‘frequent remarks about natural law […] are astonishingly naive and acritical’.

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25 Strauss (1959), p. 49. Apropos of Strauss, see also Cubeddu (1996), pp. 382–4. 26 Cf. note 106 of Chapter 2. 27 Sombart (1923, p. 9) writes: ‘We have to look for the founders of modern sociology among the famous adversaries of natural law and, particularly, of contractual theory’. Sombart’s statement is very partial. He misses the point that it is not natural law and contractualism as such that prevent the birth of the social sciences (and not only of sociology); the real obstacle is belief in a manifest truth, which in one way or another justifies the ‘privileged point of view on the world’. For a fuller discussion of Sombart’s essay, see Mongardini (1970, pp. 77–132) and Sartori (1979, pp. 201–2). That Locke’s natural law could not serve as the basis for economic theory was forcefully shown by Parsons (1968). However, Parsons was not aware that Mandeville, Hume, Smith and the Austrian School of Economics base their theories on the idea of ‘social process’. See Infantino (1998a). 28 Kelsen (1949), p. 156. 29 Op. cit., p. 157. 30 Ibid. 31 Op. cit., pp. 157–9. 32 Pipes (1999), p. 34. 33 Op. cit., p. 32. 34 Ibid. 35 Harrington (1924), p. 15. 36 Ibid. 37 Bernier (1914), p. 223. 38 Op. cit., pp. 224–5. 39 Op. cit., p. 225. 40 Op. cit., pp. 225–6. 41 Op. cit., p. 226. 42 Ibid. 43 Op. cit., p. 229. 44 Op. cit., p. 230. 45 Op. cit., p. 232. 46 Gomperz (1905), vol. 3, p. 106. 47 Russell (1962), pp. 28–9. 48 Russell (1947), pp. 12–3. See also Russell (1991), pp. 121–5. 49 Cf. Hoernlé (1937), pp. 166–82. 50 The similarities between communism and national socialism will be treated at greater length in Chapter 7. For further critical remarks about Plato, see Fite (1934), Winspear (1940). In defence of Plato, cf. the classical work of Levinson (1953); see also Popper’s (1966, vol. 1, pp. 323–43) response to it. In addition, cf. the volume edited by Bambrough (1967). 51 Popper (1966), vol. 1, p. 38. 52 Ibid. 53 Marx-Engels (1953), pp. 97–8. 54 Op. cit., p. 99. 55 For a more extensive treatment, see Infantino (1983), pp. 30–8.

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5 Mandeville and the Scottish moralists 1 Locke (1983), p. 26. 2 Op. cit., p. 33. 3 Mandeville (1924), vol. 1, p. 333. It is helpful to add that Mandeville defined Descartes as a ‘vain reasoner’ (op. cit., p. 181). 4 Hume (1930), vol. 2, pp. 176–7. 5 Op. cit., p. 177. 6 Ibid. 7 Smith (1976a), p. 320. 8 We have here to recall that Kant (1993, p. 494) writes that ‘the former knowledge of our ignorance, which is possible only on a rational basis, is science’. Kant also speaks of Hume as ‘one of those geographers of human reason’ (ibid.). In the attempt to separate what is science from what is not, Kant himself took on the role of ‘geographer of human reason’. It is useful to mention the propositions he set down toward the end of ‘transcendental analytic’: ‘We have now not only traversed the region of the pure understanding, and carefully surveyed every part of it, but we have also measured it, and assigned to everything therein its proper place. But this land is an island, and enclosed by nature herself within unchangeable limits. It is the land of the truth (an attractive word!), surrounded by a wide and stormy ocean, the region of illusion, where many a fog-bank, many an iceberg, seems to the mariner on his voyage of discovery, a new country, and while constantly deluding him with vain hopes, engages him in dangerous adventures […] before venturing upon this sea […] it will not be without advantage if we cast our eyes upon the chart of the land that we are about to leave, and to ask ourselves, firstly, whether we cannot rest perfectly contented with what it contains, or whether we must not of necessity be contented with it, if we can find nowhere else a solid foundation to build upon; and, secondly, by what title we possess this land itself, and how to hold it secure against all hostile claims’ (op. cit., p. 205). The ‘stormy ocean’ is obviously the endless battlefield of metaphysics. In referring to phenomenal knowledge, however, Kant considered Newton’s theory true. For a critique of Kant’s theory of knowledge, cf. Popper (1991), pp. 184–200 and also see note 36 of this chapter. Apropos of the problem of metaphysical theories, Popper made a distinction between metaphysical ones—which as such cannot be confuted—and rational ones, criticizable because they can be compared with some well-established piece of ‘world 3’ (a scientific theory, a mathematical theorem, a logical conclusion, another metaphysical theory) that we are not willing to renounce. On this point, see Popper (1991; 1983, vol. 3), Bartley (1984), Antiseri (1999). 9 Hume (1930), vol. 2, p. 167. 10 Mandeville (1924), vol. 2, p. 183. 11 Op. cit., p. 350. 12 Op. cit., p. 349. 13 Hume (1930), vol. 2, p. 199. 14 Ibid.

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19 20 21 22

23 24 25 26 27

28 29 30

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Smith (1976c), p. 487. Ibid. Op. cit., p. 488. Mandeville (1924), vol. 2, p. 189. To use the words of Hayek, Mandeville’s position allows us to free ourselves ‘from the erroneous conception that there can be first a society which then gives itself laws […] erroneous conception […] which from Descartes and Hobbes through Rousseau and Bentham down to contemporary legal positivism has blinded students to the true relationship between law and government’ (Hayek, 1982, vol. 1, p. 95). Ibid. Hume (1930), vol. 2, p. 198. Ibid. Smith (1976a), p. 110. According to Popper (1976, p. 111, note 7), this passage suggests that a child brought up in a desert until adulthood ‘could not develop a self. It means that ‘we are not born as selves’ or, more exactly, ‘we have to learn that we are selves’ (op. cit., p. 109); this happens through social relationships with others. Popper adds: ‘the upshot of all this is that I do not agree with the theory of the “pure self”. The philosophical use of the term is due to Kant and suggests something like “prior experience” or “free from (the contamination of) experience”; and so the term “pure self suggests a theory which I think mistaken: that the ego was there prior to experience, so that all experiences were, from the beginning, accompanied by the Cartesian and Kantian I think’ (op. cit., p. 111). Mandeville (1924), vol. 1, p. 52. Hume (1930), vol. 2, pp. 82–3. Smith (1976a), p. 114. Op. cit., p. 159, italics partially added. For a fuller treatment of this point, see Infantine (1998a), pp. 24–7 and pp. 30–1. In his Essay on the History of Civil Society, Ferguson (1966) reached the same conclusions as Mandeville, Hume and Smith. Nevertheless, Hume (1983, vol. 1, p. 263) had advised against the publication of that work; Smith considered it partially plagiarized from his Lectures (Carlyle, 1810, p. 299). The Essay contains numerous ‘errors’, including praise of Sparta, because there was the rule ‘to preserve the heart entire for the public’ (Ferguson, 1966, p. 247). According to Schumpeter (1997, p. 184, note 16), Ferguson ‘enjoyed’ an ‘unmerited reputation’. See also Lehmann (1930), Kettler (1965), Schiavone (1961) and Attanasio (1999). Rather than using Ferguson’s Essay, here we shall use his Principles of Moral and Political Science, which is a much later and more mature work. Smith (1976c), p. 493. For a fuller treatment, see Infantine (1998a) pp. 34–6. The expression ‘spontaneous secretion’ comes from Ortega y Gasset (1937, p. 118), who also says (op. cit., p. 117): ‘living together and society are equipollent terms. Society is what is produced automatically by the simple fact of living together. It unavoidably secretes customs, habits, language, law’, and so on. This is why de Jasay (1996, p. 55) writes:

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33

34

35 36 37 38 39 40

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‘Regarding politics as a last resort, a desperate remedy to be used when all else fails, is far from being the sickly symptom of the negation of man as a social being, and of an unnatural “atomistic” and “abstract” individualism […]. On the contrary, it is man as a social being who has the least need to resort to politics, precisely because he commands […] voluntary cooperation’. See also de Jasay (1997), pp. 143–85. I am using an expression from Ferguson (1966), p. 122. ‘Darwinian before Darwin’ is an expression Sir Frederick Pollock (1890, p. 42) used to refer to Burke and Savigny. Nevertheless, as we shall see in the next section, Burke was influenced by Hume and Smith. In reference to this, see Hayek (1967, pp. 103–4, note 21). Hume (1997, p. 162) said: ‘No form […] can subsist, unless it possess those powers and organs, requisite for its subsistence. Some new order or economy must be tried, and so on, without intermission; till at last some order, which can support and maintain itself, is fallen up’. Hayek (1967, p. 119, note 53) maintains that Erasmus Darwin transmitted the ideas of Hume to his nephew Charles. On Smith as an evolutionist before Darwin, see also Huxley (1900), p. 78 note 1. Nozick (1974, p. 314) writes that evolution is a process chosen by ‘a modest deity, who does not know precisely what the being he wishes to create is like’. More exactly, one should say that evolution is the only path left to those who recognize their ignorance and fallibility. Obviously, this is an ‘active evolutionism’ in the sense that man is an indefatigable seeker of new environments. Hume (1930), vol. 2, p. 196. Mandeville (1924, vol. 2, p. 349) had already sustained: ‘if you want or like a thing, the Owner of it, Whatever Stock or Provision he may have of the same, or how greatly soever you may stand in need of it, will never part with it, but for a Consideration, which he likes better, than he does the thing you want’. Thus, for Mandeville, value clearly has a subjective basis, which comes from personal evaluation. Smith (1976b), vol. 1, p. 47. Op. cit., p. 82. Locke (1924), pp. 28–31. Wieser (1923), p. 86. Stephen (1900), vol. 2, pp. 191–3. Smith (1976b) vol. 2, p. 660. It is also interesting to read the following passage: ‘Every faculty in one man is the measure by which he judges of the like faculty in another. I judge your sight by my sight, of your ear by my ear, of your reason by my reason, of your resentment by my resentment, of your love by my love. I neither have, nor can have, any other way of judging about them’ (Smith, 1976a, p. 19). Smith knew that social values begin with a personal evaluation. This is what we obtain from Napoleoni (1970). Marx (1972), part 3, pp. 498–523. On the economic language used by Marx as a cover for his psychologistic projections, see Infantino (1998a), pp. 52–6.

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44 For a complete analysis of Hutcheson’s influence on Smith, see Scott (1900, 1937). 45 Hutcheson (1747), p. 209. Cf. also Hutcheson (1755), vol. 2, pp. 53–5. 46 Carman (1896), p. XXVI. It should be mentioned that, among the texts Hucheson had his students use, there was Pufendorf’s De officio hominis et civis, translated by his predecessor Gershom Carmichael (Scott, 1937, p. 34). 47 Pufendorf (1769), p. 460. 48 Ibid. See also Grotius (1925, vol. 2, p. 426), even though there is also reference to the cost of production (op. cit., p. 427). 49 Pufendorf (1769), p. 460. 50 Reference to labor as a measure of value is also found in Hutcheson (1747, p. 210; and 1755), p. 54). 51 Apropos of the economic theories of the Scholastics, Schumpeter (1997, p. 98) says: ‘they listed all the price-determining factors, though they failed to integrate them into a full-fedged theory of demand and supply. But the elements for such a theory were all there and the technical apparatus of schedules and of marginal concepts that developed during the nineteenth century is really all that had to be added to them’. On the theory of the Scholastics, see also Grise-Hutchinson (1952), Rothbard (1976, pp. 52– 74, 1996, vol. 1, pp. 99–133), Kauder (1965), De Roover (1974) and Chafuen (1986). It is worthy of note that, if we carry the economic theories of the late Scholastics to the extreme consequences, we have a kind of overturning of the traditional image of Scholasticism and make way for theoretical Franciscan Scholasticism and its nominalistic conclusions. 52 Schumpeter (1997), pp. 116–8. 53 On the concepts of ‘legal price’ and ‘natural price’, see Pufendorf (1769, p. 464). 54 Rothbard (1996, vol. 1, pp. 435–74) judges Smith harshly for, among other reasons, the ‘space’ devoted to the labor-value theory in the Wealth of Nations. What must be clear here is that the major responsibility is not Smith’s, but of those who came after and were not capable of understanding that essentialism is not central to Smith’s work and is simply an inheritance he almost totally freed himself from. 55 Smith (1976b), vol. 1, pp. 124–5. 56 Op. cit., p. 456. 57 Op. cit., p. 468. 58 Smith (1976a), p. 233. For Solon, see note 82 of Chapter 2. 59 Ibid. 60 Op. cit., pp. 233–4. Among the men of ‘system’, Smith includes the French physiocrats, so he disagreed with Quesnay’s idea that the ‘political body’ can ‘thrive and prosper only under a certain precise regimen, the exact regimen of perfect liberty and perfect justice’. Smith thinks differently. He maintains that, ‘if a nation could not prosper without the enjoyment of perfect liberty and perfect justice, there is not in the world a nation which could ever have prospered’ (Smith, 1976b, vol. 2, p. 674). It is worthwhile to add the concuring judgment of Tocqueville on the physiocrats (1952, pp. 259–60): ‘According to the economists [the

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65 66 67 68 69 70 71

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physiocrats], the State does not only have the task of governing the nation; it also has the task of moulding it in a particular planned way; it is responsible for forming the spirit of citizens according to a pre-arranged model, equipping them with the principles and sentiments it considers necessary. In reality, its rights and powers have no limits; not only does it reform men, but it also transforms them; if it wished to, it could make them different from what they are! Baudeau says “the State makes of men all that it wishes”. This remarks sums up all their theories’. See also Schatz (1907, pp. 80–112); and Cheinisse (1914, pp. 11–33). Smith (1976b), p. 456. Ibid. Burke (1975a), vol. 1–2, p. 117, my italics. We should remember that it was Hume who put Smith and Burke in contact, when he sent Burke a copy of Moral Sentiments (Fay, 1960, pp. 9–10). Smith was to describe Burke as the only person he knew, whose thinking on economic subjects was exactly the same as his own, even without any previous agreement (see Dunn, 1941). Burke (1975c, vol. 5– 6, p. 141) accepted the ‘invisible hand’ idea, namely, the idea that ‘men, whether they will or not, in pursuing their own selfish interests’ achieve the ‘general good’. Smith’s ‘invisible hand’ will be dealt with in the next section. Burke (1975b), vol. 3–4, p. 346. Op. cit., p. 357. Op. cit., p. 457. Op. cit., p. 440. Even the words Burke used (‘that pitch of presumption’) seem to repeat those of Smith. Op. cit., p. 487. Op. cit., p. 562, my italics. It is useful to mention what John Stuart Mill (1985, p. 120) said: ‘That mankind are not infallible; that their truths for the most part are only half-truths; that unity of opinion, unless resulting from the fullest and freest comparison of opposite opinions, is not desirable, and diversity not an evil, but a good’. Despite this, Mill did not recognize how fertile the social process is, and he did not hesitate to write (1892, p. 531): ‘Human beings in society have no property but those which are derived from, or may be resolved into, the laws of the nature of individual man’. Moreover, he theorized the ‘stationary state’ (Mill, 1965, vol. 2, p. 754). He considered the ‘classic’ theory of value definitively established; and this produced the following comment from Mises (1981b, p. 30): ‘An error of this kind on the part of such a man must ever stand as a warning to all theorists’. It is useful to add that Spencer (1995, pp. 95–100) formulated the ‘law of equal freedom’ to put everyone in condition to exercise his special abilities. On this last point, see also Rothbard (1977, pp. 212–16; 1991, pp. 57–60). For a classic study of ‘latent functions’, see Frazer (1909). Merton, (1968, p. 120) writes that ‘the distinctive intellectual contributions of the sociologist are found primarily in the study of unintended consequences (among which are latent functions) of social practices’. And Hirschman

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74 75 76 77 78 79 80 81 82

83 84 85 86

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(1991, pp. 35–6) states: ‘One of the great insights of the science of society —found already in Vico and Mandeville and elaborated magisterially during the Scottish Enlightenment—is the observation that, because of imperfect insight, human actions are apt to have unintended consequences of considerable scope. Reconnaissance and systematic description of such unintended consequences have ever since been a major assignment, if not the raison d’e^tre, of social science’. What Hirschman does not state explicitly is that we can become aware of our ‘imperfect insight’ only when there is no ‘privileged point of view on the world’. If he had stressed this, he could not have claimed at the same time that attention to unintentional consequences is a basic characteristic of ‘reactionary rhetoric’. The Whigs were not reactionary. Duo si idem dicunt non est idem. On the problem of ignorance in the social sciences, see also Moore and Tumin (1949) and Schneider (1962). Here it is necessary to add that even the natural sciences study nonplanned results, a task, as explained in the text, that leads to identifying the conditions which make certain events, that we consider positive or negative, possible or impossible, respectively. Hartley (1989), p. 137. Cropsey (1987, p. 635) declares that in Smith there is a ‘close conjunction of economics and political philosophy’. Perhaps it would be more exact to say that there is a close tie between economics and theory of knowledge. Hume (1930), vol. 2, p. 191. Ibid. Ferguson (1792), vol. 2, p. 510. Op. cit., p. 477. Forbes (1966), p. XXIV. It would probably be more correct to say that merit for the destruction of the ‘legislator myth’ goes to Mandeville and the Scottish moralists. The expression ‘science of a legislator’ is Smith’s (1976b), vol. 1, p. 468. See also Winch (1978, pp. 159–60) and Haakonsen (1981, p. 92). Smith (1976a), pp. 232–3. For his part, Hume (1903, p. 499, note 1) had already asserted: ‘Of all mankind, there are none so pernicious as political projectors, if they have power, nor so ridiculous, if they want it: as, on the other hand, a wise politician is the most beneficial character in nature, if accompanied with authority, and the most innocent, and not altogether useless, even if deprived of it’. It is not by chance that Hume (op. cit., p. 50) himself criticized ‘Plato’s plans of government’ and also (Hume, 1903, p. 159) the ‘platonist’: ‘thou art thyself thy own ideal. Thou worshippest thy imaginary perfections; or rather, sensible of thy real imperfections, thou seekest only to deceive the world and to please thy fancy, by multiplying thy ignorant admirers. Thus, not content with neglecting what is most excellent in the universe, thou desirest to substitute in the place what is most vile and contemptible’. Smith (1976a), p. 234. Ibid. Smith (1976b), vol. 1, p. 468. Smith (1976a), p. 218. Smith (op. cit., p. 82) also says: ‘Mere justice is,

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upon most occasions, but a negative virtue, and only hinders us from hurting our neighbour. The man who barely abstains from violating either the person, or the estate, or the reputation of his neighbours, has surely very little positive merit. He fulfils, however, all the rules of what is peculiarly called justice, and does every thing which his equals can with propriety force him to do, or which they can punish him for not doing. We may often fulfil all the rules of justice by sitting still and doing nothing’. Millar (1803), vol. 4, p. 267. Ibid. Ferguson (1792), vol. 2, p. 458. See also Hume (1930), vol. 2, pp. 203–4. Ortega y Gasset (1941b, pp. 71–3) correctly maintains that the concept of ‘liberty’ held in Rome was of the juridical type. However, he adds that modern liberalism has replaced that idea with a ‘certain number of freedoms’ in the plural. What Ortega does not understand here is that the ‘freedoms’ (in the plural) are the product of liberty or, in other words, freedom is the counterpart of liberty. Smith (1976b), vol. 2, p. 833. Ferguson (1792), vol. 2, pp. 425–6, my italics. Hume (1930), vol. 2, pp. 228–9. It is worthwhile quoting what Smith (1976b, vol. 2, pp. 729–30) writes about the ‘Asiatic society’ which, as said in Chapter 3, is a system where there is no private ownership of the means of production. ‘In China, and in several other governments of Asia, the executive power charges itself both with the reparation of the high roads, and with the maintenance of the navigable canals. In the instructions which are given to the governor of each province, those objects, it is said, are constantly recommended to him, and the judgement which the court forms of his conduct is very much regulated by the attention which he appears to have paid to this part of his instructions. This branch of publick police accordingly is said to be very much attended to in all those countries, but particularly in China, where the high roads, and still more the navigable canals, it is pretended, exceed very much every thing of the same kind which is known in Europe. The accounts of those works, however, which have been transmitted to Europe, have generally been drawn up by weak and wondering travellers; frequently by stupid and lying missionaries. If they had been examined by more intelligent eyes, and if the accounts of them had been reported by more faithful witnesses, they would not, perhaps, appear to be so wonderful. The account which Bernier gives of some works of this kind in Indostan, falls very much short of what had been reported of them by other travellers, more disposed to the marvellous than he was’. Smith is referring to the Voyages of Bernier (1914), who had understood the lack of private ownership is the material basis of ‘oriental despotism’. Even before Smith, Hume (1903, p. 123), who had learned from Harrington, criticized the Chinese social system. Smith (1976b), vol. 1, p. 456. Furthermore, Hume (1930, vol. 2, p. 231) asserts that the system of private ownership, which arose unintentionally, led to the awareness that the interest of each individual is ‘advantageous to the public’.

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96 Since Smith was looking for the conditions that nourish the social process, Montesquieu comes to mind as his model. And there is no doubt that Inquiry Into the Nature and Causes of the Wealth of Nations owes something to Considerations sur les causes de la grandeur et la dècadence des Romains, where Montesquieu (1949–51, vol. 2, p. 173) writes: ‘There are general causes […] for effects in all monarchies, they glorify them, they keep them in power, and they bring about their downfall. All events depend on these causes and, if a battle, that is, a particular cause, has determined the downfall of a state, there was a general cause to explain why the state had to perish in a single battle. In brief, the general trend carries along all particular events’. In other words, Montesquieu believed that social science should seek the conditions that make a specific event possible or impossible. When Millar was describing Smith’s lessons to Dugald Stewart, he said that Smith ‘followed the plan that seems to be suggested by Montesquieu; endeavouring to trace the gradual progress of jurisprudence […] from the rudest to the most refined ages’ (Stewart, 1976, pp. 274–5). Forbes (1954, p. 646) observes that ‘this notoriously is what Montesquieu does not do’. Actually he stressed the importance of free choice (Montesquieu, 1990, pp. 70–1); he recognized that the provisions adopted by Solon and the love of work that existed in Athens were pertinent (op. cit., p. 21); he repeatedly mentioned that Sparta had borrowed its system from Crete; he underscored that the ‘laws of Minos, of Lycurgus and of Plato suppose a particular attention and care, which the citizens ought to have over one another’s conduct’ (op. cit., p. 17); and he read Bernier. Nevertheless, he did not hesitate to state that Lycurgus brought Sparta to ‘grandeur and glory’, by means of ‘so infallible’ institutions that ‘it signified nothing to gain a victory over that republic without subverting her polity’ (op. cit., p. 16). And he pointed out ‘another example’ in the Paraguay of the Jesuits (ibid.). 97 Mandeville (1924) vol. 1, p. 190, my italics. 98 Hume (1903), p. 40. Obviously, all of Smith’s work goes in the same direction. Apropos, Hayek (1949, p. 11) writes: ‘the main point about which there can be little doubt is that Smith’s chief concern was not so much with what man might occasionally achieve when he was at his best but that he should have as little opportunity as possible to do harm when he was at his worst. It would scarcely be too much to claim that the main merit of the individualism which he and his contemporaries advocated is that it is a system under which bad men can do least harm’. 99 Smith (1976b), vol. 1, p. 386. 100 Op. cit., pp. 417–8. 101 Ferguson (1792), vol. 1, p. 314. 102 Smith (1976b), vol. 1, p. 404. 103 Op. cit., p. 405. 104 Ibid. 105 Ibid. 106 Ibid. 107 Ibid., my italics. 108 Op. cit., p. 418.

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109 110 111 112 113

Ibid. Op. cit., p. 420. Op. cit., p. 421. Op. cit., p. 422, my italics. In addition to Smith’s, Ferguson’s and Millar’s explanation of the origin of capitalism, it is useful to cite Guizot (1924, p. 33): ‘the empire fell because none wished to be of the empire, because citizens desired to be only of their own city. Thus we again discover, at the fall of the Roman empire, the same fact which we have detected in the cradle of Rome, namely, the predominance of the municipal form and spirit. The Roman world had returned to its first condition; towns had constituted it; it dissolved; and towns remained’. Guizot also points out ‘the idea of the empire’ and the ‘Christian Church’ (ibid.). And he asserts: ‘Whilst, in other civilizations, the exclusive, or, at least, the excessively preponderating dominion of a single principle, of a single form, has been the cause of tyranny, in modern Europe, the diversity of elements, which constitute the social order, the impossibility under which they have been placed of excluding each other, have given birth to the freedom which prevails in the present day. Not having been able to exterminate each other, it has become necessary that various principles should exist together—that they should make between them a sort of compact […] in Europe liberty has been the result of the variety of the elements of civilization, and of the state of struggle in which they have constantly existed’ (op. cit., p. 26). For a recent discussion of the theory according to which capitalism originates in ‘feudal anarchy’, see Baechler (1971) and Pellicani (1988). Cf. also Minogue (1998). 114 See also Infantine (1998b), pp. 63–4 and the bibliography cited. 115 Smith (1976b), vol. 2, p. 910. 116 Op. cit., vol. 1, p. 426.

6 Austrian marginalism 1 2 3 4 5 6 7 8

Hayek (1949), p. 4, note 3. Menger (1996), p. 153. Op. cit., p. 154. Ibid. Op. cit., pp. 154–5. Op. cit., pp. 157–8. On this point, see Hayek (1967) pp. 103–4, note 21 and the bibliography. When Menger speaks of rationalistic ‘one-sidedness’, which is what we have called psychologism, he is undoubtedly indebted to Savigny (1831, p. 136). To illustrate Savigny’s thinking, it is useful to mention that he particularly insisted on the unintentional origin of language and law (op. cit., pp. 26–7). The following statements are helpful in understanding his opposition to the psychologism of the French tradition. First of all: ‘When we lose connection with the great entirety of the world and its history, we necessarily see our thoughts in a false light of universality and originality.

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There is only the historical sense to protect us against this’ (op. cit., p. 135). Moreover: ‘An important historical problem is never so exhausted or settled, as that no further progress is possible’ (op. cit., p. 142). And finally: ‘All this effort to improve the legal conditions by sweeping stroke from above, which aims to govern everything more and more, is nothing but another extension of the unfortunate trend that has characterized public life for so long […]. The supporters of this view think that the world can be greatly improved by orders and regulations. Though their intentions may be very noble, most of those who embitter our lives with excessive regulations claim they are doing it for our own good, and expect our gratitude’ (Savigny, 1816, p. 2). Savigny’s statements are a permanent argument against the myth of the omniscient legislator. Jaffé (1976), p. 521. Milford (1996), pp. XXX–XXXI. Menger (1994), pp. 286–8 and pp. 292–5. Aristotle (B), V, 8, 1133 a, 27–9. One of the reasons why Menger misunderstood Smith might be the fact that in the Wealth of Nations the origin of exchange is a presumed human ‘disposition’, while the idea of scarcity, which is present in Mandeville and Hume, can be found in the Lectures of Glasgow, which were found and published after Menger’s main works were published. Menger (1994), p. 154. Op. cit., p. 108. Op. cit., p. 120. Op. cit., p. 54, note 4. Op. cit., p. 121. Menger’s theory would obviously have been subscribed to by Protagoras who, as we know from Chapter 3, maintained that ‘man is the measure of all things’. Apropos of Menger’s influence on Simmel, see Infantine (1998a), pp. 106–14. Menger (1994), p. 192. Ibid. Op. cit., pp. 192–3. Op. cit., p. 191. See Chapter 3, note 156. The term ‘compositive’ comes from a manuscript note of Menger, found by Hayek (1979, p. 67, note 4). The expression ‘methodological individualism’ was coined by Schumpeter (1908, p. 90). Menger (1996), p. 173. Op. cit., p. XIV. See also Menger (1889), p. 2. Menger (1889), p. 2. Ibid. Ibid. Ibid. Menger (1996), pp. 23–4. Op. cit., p. 24. Boehm-Bawerk (1890), p. 261. Op. cit., p. 260. Ibid.

Notes

179

36 Mises (1981b), p. 28. 37 Ibid. For a detailed description of Mises’ method, cf. Infantine (1998b), pp. 79–139. 38 Menger (1996), pp. 24–5. 39 Op. cit., p. 60. 40 Op. cit., p. 59. 41 For an extensive treatment of Menger’s methodology, see Antiseri (1998), pp. 5–45. 42 Mises (1981b), p. 45. 43 Op. cit., p. 44. 44 Op. cit., p. 49. 45 Op. cit., p. 47. 46 Op. cit., p. 46. 47 Op. cit., p. 44. 48 Op. cit., p. 30, my italics. Here Mises seems to be in direct opposition to the idea of ‘conclusive verification’ à la Schlick. 49 Menger (1996), pp. 65–6. 50 Op. cit., p. 66. 51 Ibid. 52 Op. cit., p. 178, note 129 53 Boehm-Bawerk (1962a), p. 61. 54 Mises (1957), p. 251. This is an idea that appears in all of Mises’ writings, beginning with Nation, Staat und Wirtschaft (Nation, State, and Economy) and Gemeinwirtschaft (Socialism). 55 Hayek (1982), vol. 1, p. 36. 56 Menger (1996), p. 158. 57 Hayek (1982), vol. 1, p. 37. For a complete explanation on ‘Austrian’ bases of the evolutionary theory of social institutions, see Hazlitt (1998). 58 Although it emerges from the text, it should be stressed that the positions of the German School of Law are very different from those of the German Historical School of Economics. The former, influenced by Burke, includes the idea of the social process and rejects the claim of an ‘architectonic science’ of society. The objective of the latter is completely the opposite. Evidence of this contrast is the fact that Schmoller (1883, p. 250), did not hesitate to accuse Menger of being an exponent of the ‘Burke-Savigny school’. 59 Hegel (1991), p. 275. It is not by chance, therefore, that Weber (1949, p. 7) reproached his ‘honored master’ Schmoller, who wanted to make the university the center for training employees ‘loyal’ to the state, to transform the university itself into a ‘theological seminary’—except that it does not have the latter’s ‘religious dignity’. 60 Menger (1996), p. 226. 61 Mises (1969), p. 14; Mises (1983a), p. 27. 62 Jevons (1888), p. 37. 63 Op. cit., p. 25. Obviously, all this weakened the subjectivism of the marginalist theory, which would also be criticized by Marshall (1969, p. 676), in the attempt to give new life to the theory of the cost of production. More recently, the claim to rehabilitate even the theory of

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66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83

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labor-value would come from Cambridge. On this point, see Robinson (1956) and the critical comments of Lachmann (1958). Walras (1896), vol. 1, p. IV. Op. cit., vol. 2, p. 459. Clearly, as will soon be explained in the text, Walras’s objective of a ‘physics of behavior’ contradicts his own discovery of the subjective base of value. Here there is the introduction of a mechanistic hypothesis, which goes back further than Newton to Descartes and strongly influences English utilitarianism and French positivism. As Guyau (1885, p. 5) correctly points out: ‘Bentham’s disciples compared their master to Descartes. ‘Donnez-moi la matière et le mouvement, said Descartes, ‘et je ferai le monde’. Bentham could say, in his turn, ‘Give me human affections, joy and sorrow, pain and pleasure, and I shall create a moral world. I shall produce not only justice, but also generosity, patriotism, philanthropy, and all the amiable and sublime virtues in their purity’. The following remarks of Rudolf Eucken (1912, p. 195) are pertinent to the subject: ‘The concept of law has passed from the domain of man to that of nature, and here receiving a new form, has returned with it to man […]. This is a striking example of the manner in which man projects his own image into the cosmos and receives it back again, enlarged and transformed. From the one point of view this appears a mere circle, an anthropomorphic process’. For a fuller treatment of this problem, see Taylor (1967), pp. 37–69. Walras (1896), vol. 2, p. 457. Walras (1909), p. 295. See Kauder (1965), p. 92, note 7 and its bibliography. Op. cit., p. 100. Ibid.. Cf. also Antonelli (1953), pp. 269–87. Infantine (1988a), pp. 34–6. Ricossa (1988), pp. 11–12. Menger (1996), p. 159. Mayer (1937), p. 654. Here Mayer cites, among others, Rosenstein-Rodan and Morgenstern, two scholars in the Austrian tradition. Ibid. Op. cit., pp. 654–5. Op. cit., pp. 655–6. Op. cit., p. 660. Ibid. Ibid. Op. cit., pp. 660–1. Op. cit., p. 670. All this show how necessary it is to separate the Austrian position from the Walrasian one, which Boudon (1986, p. 63) does not do. It is, however, important to mention here that Pareto (1972, p. 171) believed it was impossible to replace the market with the system of equations of general economic equilibrium: ‘in the case of 100 individuals and 700 goods there would be 70,699 conditions (in reality a great number of particular details, which we have disregarded so far, would increase this number further); then we would have to solve a system of 70,699

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equations. As a practical matter, that is beyond the power of algebraic analysis, and it would be still further beyond it if we considered the fabulous number of equations which a population of forty million individuals and several thousand goods would entail. In that case the roles would be changed; and it would no longer be mathematics which would come to the aid of political economy, but political economy which would come to the aid of mathematics. In other words, if all these equations were actually known, the only means of solving them would be to observe the actual solution which the market gives’. Barone (1935, p. 288, some italics added) in his sensible essay on The Ministry of Production in the Collectivistic State specifies: ‘Some collectivist writers […] hope that with organized production it is possible to avoid the dissipation and destruction of wealth which such experiments involve, and which they believe to be the peculiar property of “anarchist” production. Thereby these writers simply show that they have no clear idea of what production really is, and that they are not even disposed to probe a little deeper into the problem which will concern the Ministry which will be established for the purpose in the Collectivistic State’. Barone also explicitly states that the equations of equilibrium ‘are not soluble a priori., on paper’ (ibid.). Nevertheless, in the preface to the German edition of Barone’s Principii di economia politica (Grundzüge der Theoretischen Nationalokonomie, 1935, p. 10) and then again in Capitalism, Socialism and Democracy (1987, p. 173) Schumpeter gives credit to the idea that Barone had solved the problem of calculation in a socialist economy, namely, that he had shown how to replace the market with a system of equations. It should be added that Pareto (1935, p. 1473, para. 2137) would realize that, to determine the maximum of society, ‘some hypothesis’ must be introduced to makes it possible to compare the ‘heterogeneous’ individual preferences and put them in order. In other words, the ‘privileged point of view on the world’ must be introduced. Mises (1981b), p. 117. Menger (1994), pp. 260–1. Boehm-Bawerk (1959), vol. 2, p. 216. Op. cit., p. 172. Boehm-Bawerk (1962b), p. 260. Schumpeter (1961, p. 32) maintains, without however drawing all the necessary conclusions, that BoehmBawerk was ‘indeed the first who expressly said that the whole value of the product must in principle be divided between labor and land, if the process of production is to proceed with ideal perfection. This, of course, requires that the whole economic system be accurately adapted to the production undertaken, and that all values be appropriately adjusted to the data; that all economic schemes work harmoniously together and that nothing disturb their execution’. We now know that Menger had already reached those conclusions. This is the basis of Kirzner’s (1973) theory of entrepreneurship, where profits arise from conditions of disequilibrium. In other words, the entrepreneur identifies what needs are unsatisfied by the current offer and tries to satisfy them. If there were no disequilibrium there would be no entrepreneurship and no profit.

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93 94 95 96

97 98 99

100 101 102

Notes

Wieser (1893), pp. 60–1. Op. cit., p. 61. Mises (1981a), p. 207. Ibid. The thesis usually connected with Mises’ name is the one in which planning is destined to failure because the abolition of private ownership and the market destroy the system of prices and make economic calculations impossible (op. cit., pp. 97–130). This thesis, which develops Wieser’s ideas (1893, pp. 66–74), casts a shadow on the fact that Mises’ primary objection to planning is gnoseological, because it is concerned with the impossibility of there being an omniscient planner. However, a few words should be said about the so-called apriorism of Mises and its compatibility with gnoseological fallibilism, which Mises himself maintains at various times in his writings. Mises (1966, p. 57) asserts: ‘The a priori sciences—logic, mathematics, and praxeology—aim at a knowledge unconditionally valid for all beings endowed with the logical structure of human mind’. All of this is incompatible with gnoseological fallibilism, and leads us to believe in the existence of a ‘pure self prior to experience. The idea of a ‘pure self is completely in contrast to the evolutionism of the Austrian School of Economics and Mises too. Different is the concept of the primacy of theory in the construction of science. This only means that research always starts off from a nucleus of initial hypotheses and that it make use of the deductive method. But these hypotheses are not asserted by any ‘pure self, free from contamination of life and its problems (cf. Infantine 1998b, pp. 31–9 and the bibliography indicated there). Mises (1977), pp. 59–60. Mises (1981a), p. 275. Ibid. Ibid. To support Mises’ thesis, it is useful to cite Rostovtzev (1957, vol. 1, p. 509): ‘the imperial power […] lost almost completely, save for some irrelevant formulae, the last remnants of its constitutional character as the supreme magistrature of the people of the Empire. It now resembled the Persian monarchy of the Sassanidae and its predecessors in the East, the monarchies of Babylonia, Assyria, Egypt, and the rest’. In other words, the autonomy of civil society and free mobilization of knowledge were suppressed. Mises (1981a), p. 276. Hayek (1949), p. 50. See Hayek (1949), pp. 1–32 and Hayek (1979). It is also useful to stress that in Mises the division of labor includes the division of knowledge, and competition is in any event a means of mobilizing different knowledge. See Rothbard (1991), pp. 27–30. Hayek (1949) pp. 45–6, my italics. Op. cit., p. 46. It is well known that Hayek makes his first strong attack on the theory of general economic equilibrium in Economics and Knowledge. When this essay was first published it contained a note in which Hayek stated that ‘some of the most stimulating suggestions on problems closely related to

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those treated here have come from his [Mayer’s] circle’ (Hayek, 1937, pp. 34–5, note 1). And he cited the following works: Mayer (1932) and Rosenstein-Rodan (1930, 1934). When Hayek included Economics and Knowledge in Individualism and Economic Order, the note in question was eliminated. Boehm (1992, pp. 20–2) claims that in this way Hayek’s debt to Mayer and Rosenstein-Rodan and Morgenstern disappears. Kirzner (1995, vol. 2, pp. VII–XIX) maintains that this accusation is unjustified and shows the ‘break’ among those authors and Hayek. It should be added that Hayek’s criticism of the general theory of economic equilibrium, which was different or perhaps more direct than Mayer’s, strikes at the gnoseological presuppositions of general equilibrium. And it should also be borne in mind that in those years, in London, Hayek closely examined Menger’s methodological studies, because he edited a reprint of Menger’s works. He also acquired broader knowledge of the Scottish tradition, which puts the problem of the dispersion of knowledge at the center of its paradigm. Hayek (1949), p. 95. Hayek (1978), p. 179. Op. cit., p. 181. Op. cit., p. 179. Hayek (1949), p. 92. Op. cit., p. 101. Op. cit., pp. 83–4. Ibid. Op. cit., p. 85. Op. cit., p. 86. Prices act as an irreplaceable parameter and, as Smith says (1976b, vol. 2, p. 630) make it possible to channel resources ‘in the proportion which is most agreeable to the interest of the whole society’. In other words, for economic action in the narrower sense prices are what social norms are for action in general. Prices and the ‘impartial spectator’ are points of reference for individual action. If price is the relationship in which one good is exchanged for another, the norm is the relationship in which one service is exchanged for another. See Infantine (1988a), pp. 34–6. Hayek (1949), p. 86. Op. cit., p. 87. Hayek (1979), p. 152. Here too we see the connection between Hayek’s position and the Scottish one. Op. cit., p. 154. Op. cit., p. 152. Op. cit., p. 159. Hayek (1960), p. 28. Ibid. Hayek (1988), p. 66. Hayek (1960), p. 148. Hayek (1979), pp. 391–2. Hayek (1960), p. 24. Hayek (1952) devoted a work of theoretical psychology to the inability of the mind to understand and explain itself.

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137 138 139 140 141

142 143

144 145

Notes

See also Mises (1966, pp. 90–1; 1978a, p. 15) on the brain as a ‘spontaneous order’. Hayek (1979, 1960, 1988). Hayek (1960), pp. 24–5. Hayek (1988), p. 78. Wieser (1923), p. 96. Menger (1994), p. 97. Boehm-Bawerk (1962a), p. 55. Boehm-Bawerk (1962c), p. 160. Ibid. Mises (1981a), p. 34. Mises (1985), p. 25. Mises (1981a), p. 34. Op. cit., p. 32. It is useful to remember what Simmel said (1978, p. 99) apropos of this: ‘inter-individual exchange […is] a peace treaty and both exchange and regulated exchange […] originated together’. Weber (1965, pp. 20–1) made a distinction between ‘adventurer’ and capitalistic entrepreneur, placing the latter within a framework of certainty of the law. Mises (1981a), p. 34. Op. cit., pp. 32–3. Hayek (1982), vol. 1, 55. Op. cit., p. 110; see also op. cit., vol. 2, pp. 35–6. It is useful to mention here what Weber wrote (1978, vol. 2, p. 667, my italics): ‘From the juridical point of view, modern law consists of “legal propositions”, i.e., abstract norms the content of which asserts that a certain factual situation is to have certain legal consequences’. A paradigmatic example of an abstract, empty social norm is ‘salutation’. It acts as habitat for all possible social relationships. On this point, see Ortega y Gasset (1957), pp. 201–11. Hayek (1982), vol. 2, p. 11. Hayek (op. cit., p. 114) expresses the same concept as follows: ‘an abstract order […] must leave undetermined the degree to which the several particular needs will be met’. In treating this theme, Weber (1978, vol. 1, p. 75) said that the ‘pure laissez-faire state […] would leave the economic activity of individual households and enterprises entirely free and confine its regulation to the formal function of settling disputes connected with the fulfillment of free contractual obligations’. Furthermore, (op. cit., vol. 2., p. 657): ‘every concrete legal decision be the application of an abstract legal proposition to a concrete fact situation’; perhaps it would be more correct to say that ‘every concrete legal decision’ fits into an abstract legal proposition. Hayek (1982), vol. 1, p. 52. Op. cit., vol. 2, pp. 42–4. It is necessary to add that, if we had the knowledge required to define justice in positive terms, we would not need social and moral norms. Writing against Bentham and his school, Hayek (op. cit., p. 20) rightly says that they ‘must proceed on a factual assumption of omniscience which is never satisfied in real life and which, if it were ever true, would make the existence of those bodies of rules

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which we call morals and law not only superfluous but unaccountable and contrary to the assumption’. And moreover (ibid.): ‘the factor which makes rules necessary […is] our ignorance’. Finally (op. cit., p. 127): ‘Both freedom and justice are values that can prevail only among men with limited knowledge and would have no meaning in a society of omniscient men’. Obviously, as we shall see later on in the text, general abstract norms are the ones that defend us better from ignorance. Hayek rightly says (op. cit., p. 110): ‘So long as collaboration presupposes common purposes, people with different aims are necessary enemies who may fight each other for the same means’. Ibid. Op. cit., vol. 2, p. 12. Ibid. Op. cit., pp. 114–5. Op. cit., vol. 1, p. 85. Ibid. Op. cit., vol. 3, p. 39. Mises had already written on this question in the twenties (1985, p. 170): ‘The […] basic defect of these parties is that the demands they raise for each particular group are limitless. There is, in their eyes, only one limit to the quantity to be demanded: the resistance put up by the other side. This is entirely in keeping with their character as parties striving for privileges on behalf of special interests […]. People have been coming to recognize this ever more clearly and have begun to speak of a crisis of the modern state and of a crisis of the parliamentary system. In reality, what is involved is a crisis of the ideologies of the modern parties of special interests’. Later on, Mises (1998, p. 91) added: ‘it is a tragic error to believe that democracy and freedom are compatible with interventionism’. Hayek (1982), vol. 1, pp. 56–7. Here I am using an expression of Simmel (1978), p. 212. See Mises (1983a), pp. 1–20 and the bibliography indicated. Mises (1981a), p. 79, my italics. Op. cit., pp. 156–8. Cf. also Mises (1981b), pp. 107–9. Mises (1969), pp. 51–2. Mises (1966), p. 287. Hayek (1976), p. 92.

7 The intellectualistic hubris and destruction of liberty 1 Plato (L), 797 d. 2 For more about Plato’s political ‘vocation’, cf. Reale (1997), vol. 2, pp. 285–8. On the idea of ‘intellectual proletariat’, see Pareto (1974), p. 182. For a complete treatment of the role played in modern times by the ‘proletarianized intellectuals’, cf. Pellicani (1975; 1995). 3 Jaeger (1961), pp. 41–2. 4 Ortega y Gasset (1958), pp. 261–2. 5 Popper (1966), vol. 2, p. 194.

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19 20 21 22

23

24 25 26 27

Notes

Bartley (1984), p. 109. Op. cit., p. 84. Plato (L), 645 b. Popper (1966), vol. 2, p. 194. Ehrenberg (1951, p. 266) writes: ‘It was not only myth that perished. Myth is always subject to poetic license or rationalistic interpretation and skepticism. It was faith itself, expressed in cult and prayer, of which the inner decay was characterized by a great number of parodies of both cult and prayer’. See Chapter 3. Jaeger (1964), p. 72. Op. cit., p. 23. Descartes (1960), p. 50. Ortega y Gasset (1941a), p. 16. Ortega y Gasset (1940), p. 191. I am using here an expression from Xenophones (A), 25. Ortega y Gasset (1921, p. 99) says that utopianism, the idea that the principle of reality can be cancelled, is ‘magic’. In reference to Marx’s utopianism, Boehm-Bawerk (1959, vol. 1, p. 297) spoke about ‘dialectical hocus-pocus’. See note 74 in Chapter 3 and its related text. I am using an expression from Scheler (1923, pp. 265–6). Ibid. On the problem of uncertainty, Hayek (1949, p. 66, note 21) rightly says: ‘The point is that, while it is easy to protect a particular person or group against the loss which might be caused by an unforeseen change, by preventing people from taking notice of the change after it has occurred, this merely shifts the loss onto other shoulders but does not prevent it. If, e.g., capital invested in very expensive plant is protected against obsolescence by new inventions by prohibiting the introduction of such new inventions, this increases the security of the owners of the existing plant but deprives the public of the benefit of the new inventions. Or, in other words, it does not really reduce uncertainty for society as a whole if we make the behavior of the people more predictable by preventing them from adapting themselves to an unforeseen change in their knowledge of the world. The only genuine reduction of uncertainty consists in increasing its knowledge, but never in preventing people from making use of new knowledge’. This means that, by permitting mobilization of knowledge, liberty defends us from uncertainty. Hume’s law, dealing with the impossibility of deriving prescriptive propositions from descriptive ones, puts an end to the pretense of giving a rational basis to our political-ethical absolutism. Apropos of this, Weber (1991, p. 118) considered it completely ‘vulgar’ to use ‘ethics as a means of being in the right’. Bartley (1984), p. XXI. Ibid. Ibid. Popper (1991), p. 25.

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34 35 36 37 38 39 40 41 42 43 44 45

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Ibid. Ibid. Hartley (1990), p. 173. Popper (1991), p. 24. Bartley (1984), p. 113, see also p. 182. Reference to Marx and Marxism is obligatory here. The idea that thought is determined by one’s class gives rise to what Mises called ‘polylogism’. Obviously, this is a path anyone can follow. The exponents of the German Historical School of Economics even maintained that the logical structure of thought and human action is subject to change in the course of historical evolution. Racial ‘polylogism’, which assigned a specific logic to each race, came afterward. As Mises (1981b, p. 189) correctly observed, this is only a way to ‘dethrone’ the cognitive process and affirm the ‘privileged point of view on the world’; in addition, this is ‘inconsistent’ with the premises themselves of ‘polylogism’, because no reason is given to explain why the thought of one faction or group should not be subject to social determinism. Mises (1957, p. 145) also raises these objections toward Mannheim and ‘sociology of knowledge’, proponents of ‘polylogism’. Popper (1966, vol. 2, p. 217) accuses sociology of knowledge of neglecting the ‘social aspect of science’ and overlooking the fact that the results achieved do not depend on who states a proposition but on the controls it is publicly subjected to. Apropos of this, see also Schumpeter (1997), Stark (1958) and Merton (1968). Burke (1975b, vol. 3–4, p. 239) said that the power or weakness of a theory does not reside in the party ‘it comes from’. Popper (1966), vol. 1, pp. 7–10 for ‘historicism’; vol. 2, pp. 224–80, for ‘oracular philosophy’. Op. cit., vol. 2, p. 238. Voegelin (1952), p. 126. Op. cit., pp. 162–3. Op. cit., p. 110. See also Voegelin (1975). Voegelin (1952), p. 110. Op. cit., p. 167. Op. cit., p. 170. Op. cit., pp. 61–75. Op. cit., pp. 124, note 25. Parmenides (A), 8. Jaeger (1961, p. 106) says: ‘It is significant that all these properties are obtained by negating certain properties of the sense-world’. The world to come—the social process—is only appearance; the world of being is the truth. This is why Jaeger (ibid.) asserts: ‘He has no intention that his doctrine of the Existent should explain the natural world of multiplicity and motion; but in his remarkable doctrine of the world of appearance he endeavors to explain the errors of those men who have put duality in place of One, as the primal substance, and motion in place of that which persists unchanged’. What occurs is that ‘facts and places of the divine’ are projected on ‘the mythical screen’. They are ‘steps towards a new identity, an attempt to reconstruct on different bases an image of an individual in

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46 47 48 49 50 51

52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71

Notes

crisis. The intellect that works under the influence of the gnostic myth strives to regain its original unity’ (Filoramo, 1983, p. 84). Jaeger (1961), p. 54. Ibid. Filoramo (1983), p. 10. Popper (1966), vol. 2, p. 242, my italics. Ibid. On gnosticism, in addition to Filoramo (1983), see Jonas (1963), Doresse (1973), Puech (1973), Grant (1966), Pétrement (1984) and Benelli (1991). It should be pointed out that my position contradicts Durkheim (1959, p. 54), according to whom Plato’s collectivism and modern collectivism cannot be assimilated, because the ‘sentiments’ of the former are ‘at the roots of communism’ and are ‘of all times’, while the latter is the product of a more specific social process. Pellicani (1996), p. 693. On the more general subject of gnostic activism, see Pellicani (1975, 1995) and Talmon (1960). On Utopia, see Buber (1949), Munford (1923), Cioranescu (1972) and Baldini (1994). See note 17 of Chapter 4. Cf. note 96 of Chapter 5. Constant (1988b), pp. 318–9. Op. cit., p. 319. Op. cit., p. 318. Mably (1767), pp. 183–4. Rousseau (1997a.), p. 11. Rousseau (1997b), p. 175 Rousseau (1997c), p. 8. Helvétius (1973), pp. 289–90; Holbach (1999), vol. 2, p. 312. Diderot (1963), p. 202. Praise of Sparta can also by found in the Encyclopedic under the heading Lacédémone (Republique de); on the same subject see Guerci (1979), p. 97. Talmon (1952), pp. 64–5. Babeuf (1965), pp. 209–10. Saint-Just (1946), p. 282, my italics. Op. cit., p. 292. Op. cit., p. 294. Op. cit., pp. 303–4, my italics. Op. cit., p. 304. In addition: ‘all children will wear the same kind of clothing until they are sixteen years old; from sixteen to twenty-one they will wear the uniform of the worker, and from twenty-one to twenty-five that of the soldier’ (ibid.). See also Morelly (1950), pp. 314–5. The removal of children from their parents is one of the primary and most lasting objectives of all collectivist regimes. Even without taking into consideration the pathological fantasies of Fourier (1967, pp. 89–131), it should be mentioned that even Marx and Engels (1988, p. 227) proposed the abolition of the ‘bourgeois family’ and the replacement of ‘home education’ with ‘social’ education, which really means political education. On this subject, see also Bebel (1988, pp. 229–32).

Notes

72 73 74 75 76 77 78 79 80 81 82 83 84

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104

189

Ferrero (1986), pp. 121–2, my italics. Op. cit., p. 122, my italics. Burke (1975b), vol. 3–4, pp. 524–5 Op. cit., p. 335. Op. cit., p. 334. Op. cit., p. 311. Ibid. Op. cit., p. 302. Op. cit., p. 280. Op. cit., p. 303. Op. cit., p. 369. Op. cit., p. 345. Burke (1975c, vol. 5–6, p. 168). Burke’s attitude toward the English revolution of 1688 was very different: he strongly defended it and it is easy to understand why. Lord Acton (1907, pp. 118–9) asserted: ‘to speak truly, our two greatest writers, Burke and Macaulay, have taken pains to show that the Revolution of 1688 was not revolutionary […], that it was little more than a rectification of recent error, and a return to ancient principles. It was essentially monarchical. The king was acknowledged to be a necessity in the then state of England […]. Nothing was done to determine whether the future belonged to the Tory or the Whig’. Actually, that ‘revolution’ did nothing more than restored political legitimacy and the certainty of the law. Therefore, as Hannah Arendt (1963) also noted, this explains the success of the American revolution, which was exclusively directed toward establishing an institutional framework favorable to individual freedom and economic development. Burke (1975c), vol. 5–6, p. 168. Tocqueville (1848), p. 2418. Tocqueville (1952) p. 112. Op. cit., p. 129. Op. cit., p. 135. Op. cit., p. 210. Op. cit., p. 209. Op. cit., p. 213. Ibid. Cochin (1979), p. 140. On the French revolution, see also Cobban (1964), Furet and Richet (1973), Furet (1966). Talmon (1952), p. 135. Crouzet (1967), p. 173. Tocqueville (1952), p. 135. Acton (1862), pp. 410–7. Pellicani (1974), p. 200. Mises (1969), p. 23. Op. cit., p. 31. Hayek (1967), p. 168. Ibid. Spengler (1924), p. 1.

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105 106 107 108 109 110 111

Op. cit., p. 2. Ibid. Ibid., my italics. Sombart (1937), p. 5. Op. cit., p. 146. Marx (1988), p. 103. Sombart (1937), p. 194. Mises (1983b, p. 34) had the following to say about the evolution of the German Historical School of Economics: ‘Such was the progress of German Academic economics from Schmoller’s glorification of the Electors and Kings of Hohenzollern to Sombart’s canonization of Adolf Hitler’. Mises (1978b, p. 103) also recounts that Sombart would have liked to change the title Die drei Nationalökonomie to the more significant one of Das Ende der Nationalökonomie (The End of Economics). Sombart confessed to Mises that he did not do it ‘out of consideration for his colleagues, who were earning a livelihood from teaching economies’. What is important to note here is that the objective of the open society’s enemies is always the same: to eradicate the market and the science that studies its laws, in order to reassert the primacy of politics. See respectively Mises (1969), p. 32 and Hayek (1967), p. 169, note 1. This is why Spengler (1924, p. 8) praised Bebel, in whose party there was something ‘soldier-like’ that distinguished it from the ‘socialism of all countries: the marching step of battalions of workers, the silent determination, the discipline, and the courage to die for something that transcend the individual’. He also praised the ‘spartacists’ (ibid.). And Sombart (1937, p. 160) said that Lassalle, ‘in the time of the bleakest Manchester period, under the spell of his teacher, Fichte, represented the idea of the state in eloquent words’. Mises (1969), p. 148 Hume (1930), vol. 2, p. 236. Tocqueville (1952), p. 135. On Nazism and Plato, see Hoernlé (1937), pp. 178–81 and Rawson (1991), pp. 331–43. Mises (1981a), p. 485; Mises (1969), p. 56; Mises (1998), p. 6. Ibid. This is an opportunity to clarify a point. When the market is manipulated through political interventionism, private ownership no longer guarantees the contractual freedom of the social actors, even if it is formally in effect. In other words, if relevant economic data are altered so is the choice of the operators. Pascal (1938, p. 177), going back to Robertson, maintains that the condition of private ownership is an indication of the relationships that exist between the holders of political power and the civil society. To tell the truth, as Smith had already done, Robertson (1835, p. 104) delved more deeply. Indeed, in reference to the Turkish system of government, he wrote: ‘It is the distinguishing and odious characteristic of eastern despotism, that it annihilates all other ranks of men, in order to exalt the monarch; that it leaves nothing to the former, while it gives everything to the latter; that it endeavors to fix in

112

113 114 115 116 117 118

Notes

119 120 121

122 123 124 125 126 127 128 129

130 131 132 133 134 135 136

191

the mind of those who are subject to it, the idea of no relation between men, but that of a master and of a slave; the former destined to command and to punish, the latter to tremble and to obey’. Robertson understood very well that the most important characteristic of closed systems is to raise political power to the rank of ‘privileged point of view on the world’. Even when this does not lead immediately to formal abolition of private ownership, it causes its substantial suppression. Marxism followed the former route, Nazism the second. The objective of the Scottish moralists, who believed in a regime of liberty, was to eliminate the ‘privileged point of view on the world’ and rigorously protect private property. By considering the ‘philosopher class’ a privileged source of knowledge and advocating the abolition of private property, Marx turned their position upside down. ‘Control’ of private property and its abolition function as protection of the ‘privileged point of view on the world’. On Marx and the Scottish moralists, see Pascal (1938), Forbes (1954), Meek (1954) and Lehmann (1960). Mises (1969), p. 47. Ibid. Op. cit., p. 46. In keeping with this, see Schoenbaum (1967); Turner (1985); Barkai (1990). On Fascism, cf.: De Felice (1966); Sarti (1971); Melograni (1972); Settembrini (1978); Sternhell (1978); Milza (1991); Griffin (1993) and Neocleous (1997). Ortega y Gasset (1981), p. 35, my italics. Ortega y Gasset (1958), p. 267. Nozick (1974), p. 310. Op. cit., p. 311. Ibid. Bartley (1990), p. 243, my italics. See note 87 of Chapter 2. See note 120 of Chapter 6. It is worthwhile adding what Popper (1991, pp. 28–9) says: ‘The more we learn about the world, and the deeper our learning, the more conscious, specific and articulate will be our knowledge of what we do not know, our knowledge of our ignorance. For this, indeed, is the main source of our ignorance—the fact that our knowledge can be only finite, while our ignorance must necessarily be infinite’. On ignorance in economics, see also Stigler (1961), Sowell (1980), O’Driscoll and Rizzo (1985). Kelsen (1929), p. 100. Op. cit., p. 101. Op. cit., pp. 101–2. Bartley (1990), p. 14, my italics. Smith (1976a), pp. 228–9, my italics. Mises (1977), p. 17. Rightly Settembrini (1982) spoke of ‘true revolution’ and ‘false revolution’ in reference to the advantages produced by an open society and the damage caused by many so-called political ‘benefactors’ or

192

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‘heroes’. Previously, Settembrini (1978) had spoken of Fascism as a ‘counter-revolution’, and, what is more, an ‘imperfect one’. 137 Jaeger (1986), p. 299. 138 The expressions in quotation marks are from Jaeger (1964), respectively from p. 36 and p. 174. 139 Here I am using an expression from Mises (1969), p. 52.

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Index

absolute monarchy 59, 144 absolutism 3 abstract order 6; and the mobilization of knowledge 120–5 Academy 48 Acton, Lord 8, 16–18, 19 Anglo-Saxon tradition 101 Antisthenes 130 Apothetae 45 Aristophanes, plays of 13–16 Aristotle 4, 66, 101, 103; between tribalism and the market 48–56 arrogance 91 Asia 27 association 7 Athens 2, 3, 5, 8–31, 138, 149; Constant 9; contractual freedom 29–31; habitat of liberty 16–19; ignorance and liberty 32–7; market in plays of Aristophanes 13–16; Meyer 9–10; Pericles 11–13; Popper 10–11, 13; private property 74– 5; Solon and the ‘struggle for law’ 19– 25; and Sparta 25–9, 143 Austrian School of Economics 5, 99–127; conflict with Walrasian approach 108– 12 authoritarian state 25–9 Babeuf, F.N. 139 Bacon, F. 66 barter 52–3 Bartley, W. 89, 129, 130, 132, 148 Bebel, F.A. 146 being, doctrine of 41, 135 Bentham, J. 84, 100 Bernier, F. 70–3, 75 ‘best men’, rule by 59 Boehm-Bawerk, E.von 105, 113, 121–2, 126

Bolshevism 74 Bücher, K. 9 Burckhardt, J. 3 bureaucracy 12 Burke, E. 87–9, 99–100; French revolution 140–2 Bismarck, O.von 145 Cannan, E. 84 capitalism: origins of modern capitalism 94–8; see also economic activity, market Carthage 61 Cato the Censor 19 cavern, myth of the 39–40 centralism 142 change, liberty and 147–50 Charmides 46 children 44–5, 139 China 143 choice 29–30, 37–8, 123; lack of in Sparta 25–9 Christianity 134–6 Cicero 19, 31, 56–61 cities; characteristics of the Platonic city 41–8; and countryside 94–6; maritime cities 4, 10–11, 60–1 civil society 67–9 classical economists 84 Clement 135 closed society 2–4, 128 Cochin, A. 143 collectivism 73–4, 103, 118–19; Aristotle 53–4; Platonic city 43–8 colonization 10–11 commercial courts 30 common good 85, 93, 124 commutative justice 56 competition 113–15, 117, 132

206

Index Comte, A. 150 consensus, government by 16–17 Constant, B. 5–6, 8, 9, 25–6, 26–7, 137–8 consumer sovereignty 54 consumption 83 contractual freedom 29–31 contractualism 67, 79 Convention, the 140 conversion 40; vs critical discussion 62–6 cooperation 21, 30, 33, 124, 148–9; competition and 113–15; Scottish moralists 81–2; Solon 24 Corinth 61 cosmopolitanism 10 countryside, city and 94–6 Crete 27, 46, 52, 149 Critias 46 critical discussion 8–11, 12, 16–19, 75; conversion vs 62–6 critical rationalism 128–9, 133–4 custom, law and 26, 91

207

ethical orientation 108–9 ethics 59–60, 77–82 eunomia (lawfulness) 24 exchange 52–3, 55–6, 81, 101–2; see also economic activity, market exchange value 54–5 fallibilism 1–2, 5 fallibility 100–1, 132–3, 148; ignorance and the study of ‘latent functions’ 85–9 ‘false individualism’ 1 family 44–5 Ferguson, A. 89–90, 92, 93, 94 Ferrero, G. 139–40 feudal anarchy 94 Filangieri, 5–6 food, distribution of 12 Forbes, D. 90 French revolution 137–43, 144 Fustel de Coulanges, N.-D. 26

democracy 8–11, 12, 47–8, 148; habitat of liberty 16–19; Hayek 125; social interaction 37; Socrates 36 Descartes, R. 66, 130–1, 137 development: economic 8–16, 89–94; liberty as the habitat of 89–94; political 8–11, 16–19 Diderot, D. 138 dike 20–1 disequilibrium 113–15, 117 distribution 83–4 distributive justice 56 division of knowledge, problem of 86–7, 115–20 Durkheim, E. 150

general econonomic equilibrium theory 109–12, 116, 117 German Historical School of Economics 101, 103–8, 108–9 Germany 74, 144–7 Girondists 144 Glotz, G. 12–13 gnosis 133–6 God 40–1 Gomperz, T. 73 good: common good 85, 93, 124; supreme good 50–1, 85 Good and Evil 38, 108–9; impossibility of science of 77–82 Grote, G. 63–4 Grotius, H. 84–5

economic activity 71–2; Aristotle 52–6; Cicero 60–1; see also market economic development 8–16; liberty as the habitat of development 89–94 economic value see value Egypt 27, 46 Ehrenberg, V. 14, 25 18th Brumaire revolution 139–40 empiricism 105 Engels, F. 75–6 equality 12–13, 138–9; legal 17–18, 20–2, 29–31 equilibrium 109–12, 116, 117; disequilibrium 113–15, 117 essences 39 essentialist theory of value 84–5

habitat, normative 16–19, 24–5, 56–7, 148; liberty as habitat of development 89–94; mobilization of knowledge 120– 5 happiness 51, 53 Harrington, J. 69, 74 Hayek, F.A. von 7, 99, 100, 120, 127, 129, 148; Germany, socialism and Marxism 145; mobilization of knowledge 120, 123–5; ‘true’ and ‘false individualism’ 1; unification of Austrian and Scottish traditions 115–20 Hegel, G.W.F. 108, 150 Helots 28 Helvétius, C.-A. 138 Hesiod 20, 21

208

Index

Hildebrand 103–4 historical materialism 75 historicism 133–6 Hitler, A. 74, 150 Hobbes, T. 67 Holbach, P.-H. d’ 138 honesty 57–8 hubris, intellectual 22, 24, 47, 120, 131, 143 human nature 62–3 Hume, D. 82, 87, 89, 100, 115, 146; morality 77–82; private interest 94 Hume’s law 78 Hutcheson, F. 84 ignorance 100–1, 148; and disequilibrium 113–15; fallibility and study of ‘latent functions’ 85–9; and liberty in Athens 32–7 immutable, science of the 50 individual: subordination to the state 25–9 individualism 119; methodical 99–101; methodological 55, 103; ‘true individualism’ and the market 1–2 industrial revolution 95–7 institutions 120–3 intellectual hubris 22, 24, 47, 120, 131, 143 intentionally constructed order 5, 52 interpersonal relationships 56–61; see also social process interventionism 124–5 Ionia 21 isonomy 29 Jacobins 138–9, 143 Jacoby, F. 25 Jaeger, W. 4, 20–1, 41, 64, 65, 149 Jaffé, W. 100–1 Jevons, W.S. 109 Jhering, R.von 19–20, 30–1 Joachim of Flora 134 justice 18–19, 33, 35–6, 92–3; the struggle for law 20–3 Kelsen, H. 64, 69, 148 knowledge: growth of 8–11; mobilization of 120–5; partial 105–6; philosophers’ monopoly of 39–41; Plato’s theory of 38–41; ‘privileged’ see ‘privileged point of view on the world’; problem of division of knowledge 86–7, 115–20 labor 82

land 71, 72, 75–6 Lassalle, F. 144, 146 ‘latent functions’ 85–9 law 35–6, 54; abstract order and mobilization of knowledge 120–5; and custom 26, 91; equality before the law 17–18, 20–2, 29–31; independence from legislation 18–19; natural 59–60, 67–9; Solon and the ‘struggle for law’ 19–25 legislation 5–6, 124–5; independence of law from 18–19; science of a legislator 90–2 Lenin, V.I. 74 Leoni, B. 8, 16, 18–19, 29 limitation of power 6 Livy 56–7 Locke, J. 67–8, 69, 77, 82 Lycophron 67 Lycurgus 27, 29, 45–6, 59, 149; see also Sparta Mably, G.B. de 137–9 Maine, Sir H. 31 ‘man of system’ 86–7 Mandeville, B. de 5, 93–4; morality 77–82 ‘manifest truth’, doctrine of 66–9 marginalism see Austrian School of Economics maritime cities 4, 10–11, 60–1 market 4, 8–16, 75, 136; Bernier 71–2; critical discussion, democracy and 8– 11; maritime cities 4, 10–11, 60–1; under Nazism 146–7; Pericles and 11– 13; perfect 116; in plays of Aristophanes 13–16; ‘true individualism’ and 1–2; see also capitalism, economic activity, exchange marriage 44, 45 Marx, K. 75–6, 84, 145, 146, 150 Mayer, H. 110–12, 113 Menger, C 99–109, 110, 112, 113, 121, 126; and Adam Smith 99–101; vs the German Historical School of Economics 103–8; and the subjectivist theory of value 101–3 mercantilism 89 methodical individualism 99–101 methodological individualism 55, 103 metics 15 Meyer, E. 8, 9–10, 37 Milford, K. 101 militarism 27–8, 146, 150 Mill, J. 84, 100

Index Mill, J.S. 84, 100 Millar, J. 92, 96–7 mind, growth of 119–20 minority, right of opposition of 140 Mises, L.von 108, 112, 144, 146; competition 113–15; partial knowledge 106; private property and freedom 126–7; social institutions 122–3; theory 105 mobilization of knowledge 120–5 modernity 133–6 Mogul Empire 71–3, 75 monarchy, absolute 59, 144 money 54–5; manipulations of 125 Montagnards 140 Montesquieu, C. de S. 137 moral rules 59–60, 77–82 national economy 106–7 natural law 59–60, 67–9 Nazism (National Socialism) 74; socialist roots 144–7 needs 79, 81–2, 101–2 Neville, H. 70 Niebuhr, B.G. 100 normative habitat see habitat, normative Nozick, R. 147–8 òikos (self-sufficiency) 9 Olympian gods 3, 33, 128–9 omniscience 117, 118–19 open society 11–13, 15, 38 opposition, right of 140 order: abstract 6, 120–5; intentionally constructed 5, 52; politics and problem of 67–8; spontaneous 4–7 Origen 135–6 Ortega y Gasset, J. 5, 54, 57, 147 Palmer, L.R. 30 Parmenides 41, 64–5 partial knowledge 105–6 Pericles 5, 16–17, 33, 37; market and open society 11–13 philosophy 46, 48, 129–30; philosophers’ monopoly of knowledge 39–41 phronesis 38 physiocrats 143 Pipes, R. 69–70 Piraeus 11, 15 Plato 36, 49, 128, 135, 144, 149–50; characteristics of the Platonic city 41–8; harmful heredity of Platonic philosophy 2–4; private property 4, 73–5;

209

psychologism 62–6; re-establishment of the ‘privileged point of view on the world’ 37–41, 130; and Socrates 33–4, 38, 47–8, 66, 130 plays of Aristophanes 13–16 poets 34–5 Pohlenz, M. 59 Polanyi, K. 11–12, 55 political development 8–11, 16–19 political power 89 politics: object of 50–1; problem of 48–9; and problem of order 67–8 polytheism 3, 33, 128–9 Popper, K.R. 29, 35, 50, 55, 66; Athens 10–11, 13; Christianity 136; fallibility 1–2; historicism 133; market, critical discussion and democracy 8, 10–11; Plato 74–5, 130; psychologism 62–3; Socrates 34, 130; who should rule? 48– 9 poverty 16–17 power: distribution in Athens 16–17; limitation of 6; political 89 preferences, scale of 50–1 presumption 85–7 price 84–5, 102–3, 118 private property 93; Aristotle and 53–4; and freedom 69–76, 126–7; Nazism 146–7; Plato and 4, 43–4 privilege, abolition of 16–17 ‘privileged point of view on the world’ (fundamentum inconcussum) 2, 34–6, 47, 82, 112; bearer of 48–9; collectivism and 73–4; German Historical School 103–4, 107; reestablishment of 37–41, 75; renunciation of 17–18, 128–33 procedures 6 production 83; under Nazism 146–7 Prometheus, myth of 33 property see private property Protagoras 33–4 psychologism 38–9, 41–2, 120, 129, 134, 135; failure of 62–9 Pufendorf, S. 84–5 reactionary theory 37 religion 26, 128–30; Christianity 134–6; gnosis 133–6; polytheism 3, 33, 128–9 representation of burghs 95 Republic, Plato’s 41–8 revolution, French 137–43, 144 Ricardo, D. 83–4, 100 Rodbertus, K. 9

210

Index

Rome 8, 10, 19; contractual freedom 29– 31; interpersonal relationships 56–61 Romulus 59 Rostovtzev, M.I. 27–8 Rousseau, J.-J. 137–8 Russell, B. 74 Saint-Just, L. de 138–9 Saint-Simon, C.H. 150 Savigny, F.von 100 scarcity 79, 101, 126 Scheler, M. 36 Scholastics 84–5 Scottish moralists 5, 7, 77–98; Hayek and unification of Scottish and Austrian traditions 115–20 self-interest 7, 93–4 self-sufficiency (òikos) 9 Simmel, G. 55 slavery 13, 28 Smith, A. 7, 103, 108, 115, 148–9; authority of the state and capitalism 97; city and countryside 94–6; conditions for economic development 89–93 passim; economic value 82, 83–4; feudal anarchy 94; human presumption 85–6, 87–8; Menger and 99–101; moral rules 77–82 social cooperation see cooperation social process 68–9; Cicero 56–61; German Historical School and 103–8; moral rules a product of 77–82 social sciences 104, 108; birth of 7 socialism 143; roots of Nazism 144–7 society 107–8; as spontaneous order 4–7 Socrates 5, 33–7, 90; critic of democracy 34–7; Plato and 33–4, 38, 47–8, 66, 130 Solon 4–5, 25, 32, 49, 52, 86, 148; distribution of power 16; eunomia of 29; institutions compared to money 30, 47; and the ‘struggle for law’ 19–25 Sombart, W. 146 soul 38–9 Sparta 5, 10, 52, 54, 66, 74, 149; Athens and 25–9, 143; French revolution and 137–9, 143; law and custom 26, 91; Plato’s Republic and 45–6 Spencer, H. 62

Spengler, O. 145–6 spontaneous order: and birth of social sciences 7; society as 4–7 state 4; authoritarian 25–9; essential purpose of 68–9 Stephen, L. 83 ‘struggle for law’ 19–25 subjectivist theory of value 84–5, 109–10; Menger and 101–3 supreme good 50–1, 85 Talmon, J. 138 Tavernier, J.-B. 70 themis 20 theories 104–8 Tocqueville, A. de 5, 6–7, 7, 142–3, 146 totalitarianism 139–40, 150 totality of knowledge 105–6 trade see economic activity, exchange, market tragedy, moral 36–7 tribalism 1, 37; Aristotle 48–56; Christianity and 136; Sparta 25–9 ‘true individualism’ 1–2, 5 Twelve Tables 31 tyranny 22 use value 54–5 usefulness, honesty and 57–8 utopia 133–6 value, economic 54–5, 56, 82–5; subjectivist theory of value 84–5, 101– 3, 109–10 values 59–60, 77–82 virtue 51–2 Voegelin, E. 133–5 Voltaire 142–3 Walras, L. 109–10 wealth: Plato’s Republic 43–4; power and 16–17; see also private property Weber, M. 3, 152 Wieser, F.von 82–3, 113, 120–1, 126 women 44 Xenophon 36, 45 Zwangswirtschaft 146–7

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