Friday, November 10, 2006

What Went Right?

TIA Daily • November 9, 2006

What Went Right?

Part 2: The Implosion of the Population Bomb by Robert Tracinski

This article is continued from Tuesday's edition of TIA Daily.
The most urgent question of our era is: what went right?
In this series of articles, I will put forward my own preliminary answers to this question, but the first step is simply to recognize that the question has to be asked, and that new evidence may require new answers and new theories about the role of ideas in history.

Let us begin with just one example of recent political and cultural progress.

A few weeks ago in TIA Daily, Jack Wakeland covered the reaction to the news that the 300 millionth American had been born, and he noted the general implosion of the "population bomb" hysteria. For the most part, the 300 millionth person was celebrated as a sign of our healthy growth as a nation, not as a sign of impending scarcity and privation, as the doomsayers of "overpopulation" have been warning for many decades.

Jack attributed this cultural change to the influence of the late economist Julian Simon, whose work on this subject was implicit in numerous articles and commentaries on the latest population milestone. Jack linked to one such article, but an even better example appeared a few days later in the Wall Street Journal arguing that "more people means more prosperity."

At bottom, the debate over population revolves around a single question: Are human beings a burden, or a resource?... [P]eople don't just consume things. They make them too. More bodies means more minds, more innovation, more dynamism, and more progress. The history of the world as America went from 100 million or 200 million to 300 million lends a lot more support to the humans-as-resource view than the humans-as-burden view.

This editorial nowhere mentions Julian Simon's name—but it relies entirely on his ideas. Such is often the fate of an intellectual who succeeds in injecting an important new idea into the culture.
The idea of people as a "resource" and especially of the mind as an economic resource is the central breakthrough of Simon's 1981 book The Ultimate Resource, whose thesis is accurately summed up in its review:

In the contest between resource scarcity and human ingenuity, Simon bets the farm on the ability of intelligent people to overcome their problems…. The key to progress is not state-run conservation programs, he says, but economic and political freedom. Only then can talented minds properly apply themselves to our earthly dilemmas.

This has proven to be an enormously influential idea, providing pro-free-market thinkers and economists a profound argument for liberty. Here, for example, is just one example of the employment of this idea, from an important November 2003 speech by President Bush:

[T]he prosperity and social vitality and technological progress of a people are directly determined by the extent of their liberty. Freedom honors and unleashes human creativity—and creativity determines the strength and wealth of nations…. But…there are governments that still fear and repress independent thought and creativity and private enterprise—the human qualities that make for strong and successful societies. Even when these nations have vast natural resources, they do not respect or develop their greatest resources: the talent and energy of men and women working and living in freedom.

A nation's "greatest" resource is the creativity of its people, which is more important than any natural resource? Where do you suppose that idea came from? Obviously, President Bush has been influenced by the arguments of Julian Simon.

The most interesting thing, from the perspective of Objectivists, is that Julian Simon's argument is nearly identical to the central theme of Ayn Rand's Atlas Shrugged. What Simon demonstrated in economics and demographics, Ayn Rand identified in philosophical terms: that reason is man's means of survival and that man's mind is the source of all of his values, including all of his wealth.

I used to think of Julian Simon's work as the application to the special sciences of Ayn Rand's idea. But then I realized that it was not an "application." Simon did not start out with Ayn Rand's ideas and derive his theories from them. He induced his theory from his own observations and from his knowledge of his specialty. He started out as an economist who accepted the conventional wisdom about "overpopulation," until he began to realize that it was not actually supported by the data and by the science of economics. This process led him to a crucial moment at which he made his breakthrough. Here is how he describes the origin of his theory:

On a spring day about 1969 I visited the AID office in Washington to discuss a project intended to lower fertility in less-developed countries. I arrived early for my appointment, so I strolled outside in the warm sunshine. Below the building's plaza I noticed a sign that said "Iwo Jima Highway." I remembered reading about a eulogy delivered by a Jewish chaplain over the dead on the battlefield at Iwo Jima, saying something like, "How many who would have been a Mozart or a Michelangelo or an Einstein have we buried here?" And then I thought, Have I gone crazy? What business do I have trying to help arrange it that fewer human being will be born, each one of whom might be a Mozart or a Michelangelo or an Einstein…?

To my knowledge Simon was not significantly influenced by Ayn Rand, though I presume he must have known about her at some point in his career, especially since so many fans of her work were also fans of his. His integration and Ayn Rand's integration stand as companion ideas. Simon integrated knowledge he had discovered within his own field, and his integration goes beyond Ayn Rand's in one respect: the detail with which he is able to demonstrate the role of man's mind as a fount of wealth-creation. And Ayn Rand's integration goes beyond Simon's in another crucial respect: the scope on which she applies it. The mind as the source of all values is a principle that goes far beyond economics, and Ayn Rand is able to draw implications from it in art, morality, politics.

Julian Simon's achievement was important, but it is not the only example of an economist who has pushed forward the cause of human liberty by advancing the state of knowledge in his own field.

In August, I linked to a review of a book titled Knowledge and the Wealth of Nations, which recounts a late 20th-century development in the science of economics, in which (according to this review), "knowledge" was recognized as one of the basic factors of economic production, and growth in knowledge was identified as the primary source of economic growth.

Thus instead of land, labor, and capital—the traditional inputs of economic theory—it was "people, ideas, and things" that mattered, driving technological change and entrepreneurial creativity…. More and more, economists came to see that it was knowledge that made the difference in modern societies—e.g., in software, drugs, industrial processes, biotechnology, and other parts of the economy where the upfront costs were large, the payoffs enormous, and the benefits widespread. Economists inevitably turned their attention to the institutions or invisible structures—constitutions, customs, property rights, cultural sentiments (like trust)—that help to generate knowledge and sustain its effects.

At the time I criticized the author of the review for naming several previous thinkers who had put forward the same ideas (he mentions Friedrich Hayek), without mentioning Ayn Rand, whom anyone on the right should be aware of. But it is also important to recognize that, as with Julian Simon's theory, the economic theory that ideas and knowledge are engines of production is more than just an "application" of the philosophical principle that reason is man's means of survival. Even if it was inspired by Ayn Rand, either directly or indirectly, such an economic theory would also have to be a first-hand inductive integration on the part of the economists who develop it, who would have to base the theory on the full range of data and observations available to them within their specialty.

And just as these ideas in economics are not and cannot be simply deduced or derived from philosophy, it is important to recognize that those ideas also have a real efficacy in human affairs, even when they are not accompanied by a wider and deeper philosophical explanation. They have a real efficacy, because they constitute real knowledge, a genuine integration built up from observation, and thus a real advance in the mind of anyone who accepts them.

As a demonstration of this fact, let us consider the career of an economist who was working on an even less theoretical level than the ones we have just described, but who had a far greater practical effect.

In his book India Unbound (which I will review in the next issue of TIA), Gurcharan Das describes an economic fad of the 1960s called "dependency theory," which argued that free trade was harmful to Third World economies. He then notes that "There was a mild, noncombative student of economics in Cambridge, England,…who argued for greater openness of trade and for a less controlled economy…. He went on to rebut the prevailing pessimistic view about the poor countries' export prospects by detailed empirical data." Later on, Das informs us that this same Cambridge-educated Indian economist became a civil servant in the bureaucracy of India's finance ministry and by 1991 "he had made a serious effort to understand the East Asian miracle. That is when he realized that India had to abandon many of its old and foolish policies."

In June of 1991, a new prime minister came to office in India vowing to deal swiftly with a massive fiscal crisis. He chose this economist as his Minister of Finance, and with the cooperation of the new Minister of Commerce, the three inaugurated a bold burst of reforms that eliminated the "license raj," a complex network of business licensing requirements that had been used to impose central government planning on the Indian economy. This "Golden Summer of 1991," as Das calls it, was the beginning of India's current economic rise.
The soft-spoken economist of this story is Manmohan Singh, who also happens to be the current prime minister of India.

For our purposes, the most important thing to note is that neither Manmohan Singh nor Julian Simon, nor any of the other pro-free-market economists involved here are Objectivists, nor is there any evidence that they were influenced by Objectivism in any significant way. In fact, many of them hold philosophical ideas that are not consistent with Objectivism and even antithetical to it in some respects.

And yet they are demonstrably helping to save the world.

This creates something of a paradox for the prevailing Objectivist view of the role of ideas in history. The Objectivist theory of history is that ideas move history, particularly fundamental philosophical ideas. Here is how Ayn Rand put it:

There is only one power that determines the course of history, just as it determines the course of every individual life: the power of man's rational faculty—the power of ideas.

But this has been widely interpreted by Objectivists to mean that only fundamental philosophical ideas have efficacy, that they directly and necessarily render irrelevant all other knowledge in a man's mind, so that the wrong explicit convictions in epistemology, for example, render irrelevant good ideas in the special science of economics.

I see this quite frequently when it comes to judging the actions of a political leader or intellectual who has mixed philosophical premises, with some elements of bad ideas and some elements of good ideas. There is a certain temptation to declare that the bad ideas cancel out and make irrelevant the good ideas. The temptation is to take a man, for example, who holds a mixture of American individualism and Christian altruism, and to construct an argument to demonstrate that he is really a consistent altruist. He has to be an altruist, and the individualist elements must be mere window dressing, the argument goes, because the man must necessarily be consistent to his fundamental philosophical ideas.

As with an individual, so with a culture. This view tends to regard the universities as the only significant institution for disseminating ideas and thus for shaping the culture and therefore to project the state of the world based on the latest trends in academic philosophy—which is necessarily always a grim projection.

Given that the philosophy of Objectivism has not swept the university philosophy departments and that it demonstrably has not taken over the culture (although I believe it is growing, slowly but surely, in its influence), this view of the role of ideas in history is only capable of explaining the collapse of civilization. It is only capable of supporting a series of prognostications of imminent chaos and dictatorship, whether fascist or socialist or theocratic. The destination may change, but the direction is always the same: downward.

But this approach cannot explain the non-collapse of civilization. It cannot answer the question: what went right?

The examples we have just examined provide some clues to the answer to that question. We can say that at least part of what went right was the valid, honest, first-hand integrations made by men like Julian Simon and Manmohan Singh—men who did good intellectual work, not on the philosophical level, but within the specialized sciences.

The evidence of the current state of the world tells us that every thinking man who does honest work in his own field is our ally and is helping to move civilization forward. The work of such men is not mere cultural "momentum" from a previous era, but an active addition to human knowledge and achievement. And whatever their philosophical errors, in their professional work these men are creating valid and important ideas that do change the course of events.

I do not mean to deny the crucial importance of fundamental philosophical ideas, but to suggest that the relationship between philosophical ideas and all other ideas, and the means by which ideas are propagated in a culture, is more complex than the standard Objectivist theory has recognized. The conclusion I have come to today is just the beginning of an examination of the role of ideas in history. On Monday, I will continue that examination by looking in more detail at the role of fundamental philosophical ideas, their relationship to the achievements of the special sciences, and to the other intellectual factors that we can see at work in the world today.

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