Jeffrey Friedman

ABSTRACTHow can political actors identify which putative expert is truly expert, given that any putative expert may be wrong about a given policy question; given that experts may therefore disagree with one another; and given that other members of the polity, being non-expert, can neither reliably adjudicate inter-expert disagreement nor detect when a consensus of experts is misguided? This would not be an important question if the problems dealt with by politics were usually simple ones, in the sense that the answer to them is self-evident. But to the extent that political problems are complex, expertise is required to answer them—although if such expertise exists, we are unlikely to know who has it. This conundrum is illustrated by the financial crisis. The consensus views of financial regulators prior to the crisis appear to have been mistaken, in that the regulators not only failed to anticipate a crisis of the type that occurred, but adopted regulations that may have encouraged the concentration of mortgage risk in financial institutions. Similarly, once the crisis broke, academic financial experts, financial regulators, and journalists—who communicate information from one branch of the division of epistemic labor to another—converged on a narrative of the crisis that, once again, may plausibly be described as inaccurate, but that nonetheless has come to shape the understanding of the crisis shared by the rest of the polity.

Palmer's defense of libertarianism as consequentialist runs afoul of his own failure to provide any consequentialist reasons for libertarian conclusions, and of his own defense of nonconsequentialist arguments for the intrinsic value of capitalism‐cum‐negative freedom. As suck, Palmer's article exemplifies the parasitic codependency of consequentialist and nonconsequentialist reasoning in libertarian thought. Sciabarra's defense of Ayn Rand's libertarianism is even more problematic, because in addition to the usual defects of libertarianism, Rand adds a commitment to ethical egoism that contradicts both her concern for the consequences of capitalism and her commitment to the rights of everyone, not just herself.

_Pathologies of Rational Choice Theory_, a book written by Donald Green and Ian Shapiro and published in 1994, excited much controversy among political scientists and promoted a dialogue among them that was printed in a double issue of the journal Critical Review in 1995. This new book reproduces thirteen essays from the journal written by senior scholars in the field, along with an introduction by the editor of the journal, Jeffrey Friedman, and a rejoinder to the essays by Green and Shapiro. The scholars—who include John Ferejohn, Morris P. Fiorina, Stanley Kelley, Jr., Robert E. Lane, Peter C. Ordeshook, Norman Schofield, and Kenneth A. Shepsle—criticize, agree with, or build on the issues raised by Green and Shapiros critique. Together the essays provide an interesting and accessible way of focusing on competing approaches to the study of politics and the social sciences.

The goal of the left has been predominantly libertarian: the realization of equal individual freedom. But now, with the demise of leftist hope for radical change that has followed the collapse of ?really existing?; socialism, the world is converging on a compromise between capitalism and the leftist impulse. This compromise is the democratic, interventionist welfare state, which has gained new legitimacy by virtue of combining a ?realistic?; acceptance of the unfortunate need for the market with an attempt to libertarianize capitalism as much as possible, by intervening in its operation and redistributing the wealth it produces. Since the neoliberal economic critique of socialism seems to have been borne out by the events of 1989, neoliberal economists might now be expected to provide a similar critique of the new interventionist consensus. Yet there are few signs of their interest in doing so. This might be due to their acceptance of an erroneous interpretation of liberty which equates it with capitalist property relations, and which, they believe, provides an overarching moral justification for their opposition to state intervention in the market. Acceptance of this moralistic, ?libertarian?; version of neoliberalism may obscure the need for a synthetic critique of the new consensus which would integrate the many extant consequentialist arguments against it. Before reviewing the libertarian motives behind both socialism and intervention?ism, criticisms of moralistic neoliberal ?libertarianism?; are offered. These are intended to clear the way for a consequentialist critique of the interventionist welfare state. Finally, it is suggested that the problems with such a critique point toward a different project: a critique of the culture that gives rise to interventionism.

Libertarian arguments about the empirical benefits of capitalism are, as yet, inadequate to convince anyone who lacks libertarian philosophical convictions. Yet “philosophical” libertarianism founders on internal contradictions that render it unfit to make libertarians out of anyone who does not have strong consequentialist reasons for libertarian belief. The joint failure of these two approaches to libertarianism explains why they are both present in orthodox libertarianism—they hide each other's weaknesses, thereby perpetuating them. Libertarianism retains significant potential for illuminating the modern world because of its distance from mainstream intellectual assumptions. But this potential will remain unfulfilled until its ideological superstructure is dismantled.

In “Popper, Weber, and Hayek,” I claimed that the economic and political world governed by social democracy is too complex to offer hope for rational social‐democratic policy making. I extrapolated this conclusion from the claim, made by Austrian‐school economists in the 1920s and 30s, that central economic planning would face insurmountable “knowledge problems.” Israel Kirzner's Reply indicates the need to keep the Austrians’ cognitivist argument conceptually distinct from more familiar incentives arguments, which can tacitly reintroduce the assumption of omniscience against which the Austrian economists rebelled. Callahan's Reply illustrates the need to keep in mind the hypothetical, conditional nature of economic arguments. Notturno's Reply changes the subject by asserting the intrinsic value of social‐democratic participation, regardless of its outcomes—even while, like Talisse's Reply, ignoring the evidence that public ignorance and elite dogmatism probably can't be mitigated by more information or by appeals to be open minded. And Hill focuses on the very real imperfections of market and other private‐sphere decision making, without weighing the shortcomings of the political alternatives. Markets and other private‐sphere decision arenas don't have to be perfect for them to improve upon public‐sector processes. In the latter, cognitive demands tend to be much greater, because of the divergence of modern social problems from the conditions that would have faced the hunter‐gatherers whose cognitive apparatus we have inherited.

Karl Popper's methodology highlights our scientific ignorance: hence the need to institutionalize open‐mindedness through controlled experiments that may falsify our fallible theories about the world. In his endorsement of “piecemeal social engineering,” Popper assumes that the social‐democratic state and its citizens are capable of detecting social problems, and of assessing the results of policies aimed at solving them, through a process of experimentation analogous to that of natural science. But we are not only scientifically but politically ignorant: ignorant of the facts that underpin political debate, which are brought to our attention by theories that, as Max Weber emphasized, can be tested only through counterfactual thought experiments. Public‐opinion and political‐psychology research suggest that human beings are far too unaware, illogical, and doctrinaire to conduct the rigorous theorizing that would be necessary to make piecemeal social engineering work. F.A. Hayek realized that the public could not engage, specifically, in piecemeal economic regulation but failed to draw the conclusion that this was due to a specific type of political ignorance: ignorance of economic theory.

“The Nature of Belief Systems” sets forth a Hobson's choice between rule by the politically ignorant masses and rule by the ideologically constrained—which is to say, the doctrinaire—elites. On the one hand, lacking comprehensive cognitive structures, such as ideological “belief systems,” with which to understand politics, most people learn distressingly little about it. On the other hand, a spiral of conviction seems to make it difficult for the highly informed few to see any aspects of politics but those that confirm the cognitive structures that organize their political perceptions. This is a troubling situation for any consequentialist democratic political theory, according to which what is crucial is the electorate's (and subsidiary decision makers') ability to make informed policy judgments, not their possession of willful but uninformed political “attitudes.” Any political theorist who does not take democracy to be an end in itself (regardless of its consequences) should be concerned about Converse's findings.

“Postmodernism” denotes efforts to replace foundationalist philosophy with contextu‐alist, immanentist forms of reason. “Postlibertarianism” denotes efforts to transcend contemporary minimal statism, questioning both its “libertarian” moral superstructure and its underlying consequentialist claims and seeking to determine whether the latter can be generalized in a way that displaces the former. Efforts to reach minimal‐statist conclusions by postmodern means seem bound to aggravate the problem that plagues contemporary minimal statism: its failure to be true to its consequentialist foundations, reflected in its long‐standing devotion to dubious arguments for the intrinsic good of laissez‐faire capitalism. For postmodernism fosters the illusion that one can do without any foundations at all. Rather than recovering its consequentialist roots, therefore, postmodern minimal statism tends to rely unquestioningly on the normative foundations already accepted by the libertarian “speech community,” neither responding to alternative interpretations of the value of liberty, nor transcending the arid conversation of “liberty” in favor of investigations of the real world of contemporary capitalism and the welfare state.

ABSTRACTNormative political epistemologists, such as epistemic democrats, study whether political decision makers can, in principle, be expected to know what they need to know if they are to make wise public policy. Empirical political epistemologists study the content and sources of real-world political actors' knowledge and interpretations of knowledge. In recent years, empirical political epistemologists have taken up the study of the ideas of political actors other than voters, such as bureaucrats and politicians. Normative political epistemologists could follow this lead if they were to focus on the technocratic orientation of nearly all political actors in the West: that is, on their desire to solve social and economic problems. Since most technocratic policy is made by political elites, the reliability of elites' knowledge of the causes of and cures for social and economic problems is a natural topic for normative political epistemology.

Against my claim that free‐market environmentalism cannot solve major environmental problems, my critics deny that such problems exist. Against my contention that FME depends on the democratic policymaking it decries, they retreat from FME to libertarian environmentalism. Against my argument that LE is incoherent, they resort to anti‐intellectualism. These responses stem from demonstrable precommitments to libertarian ideology, suggesting that the debate over FME and LE has profound implications, not only for their practitioners, but for all libertarians and many free‐market social scientists.

How can one examine the sources of people's beliefs, tastes, and preferences without falling into the self‐refuting determinism that has so often characterized the most systematic theory of preferences, Marxism? Cultural Theory's attempt to do so posits five anthropologically derived, competing “ways of life"— individualism, egalitarianism, hierarchism, fatalism, and withdrawal from social life—that are intended to apply to all forms of culture and, therefore, to provide a universal framework for explaining people's preferential biases. Richard Ellis's defense of Cultural Theory, however, does not adequately address the concerns expressed in my critique of it. Ellis fails to instance a single case of a premodern culture containing the five ways of life; he does not show that exclusivist premodern versions of “individualism” and “egalitarianism” are more than superficially comparable to the inclusive modern variants of these alleged universals; and he adds new evidence to support my claim that in modern societies, people's preferences are largely unlinked to the particular social relations identified by Cultural Theory. While Ellis overtly denies that Cultural Theory is deterministic, his search for links between preferences and social relations shows that this denial cannot be sustained.Cultural Theory's reductionism stems from its neglect of historically contingent cultural traditions that thwart a priori attempts to predict culture. This ahistori‐cism transforms a myopic view of American politics as a battle of egalitarianism against individualism into a timeless truth, providing ideological self‐affirmation for “individualists” but diminishing the prospects for being able to explain or criticize individualism—or any other political preference.

The debate over Green and Shapiro's Pathologies of Rational Choice Theory sustains their contention that rational choice theory has not produced novel, empirically sustainable findings about politics?if one accepts their definition of empirically sustainable findings. Green and Shapiro show that rational choice research often resembles the empirically vacuous practices in which economists engage under the aegis of instrumentalism. Yet Green and Shapiro's insistence that theoretical constructs should produce accurate predictions may inadvertently lead to instrumentalism. Some of Green and Shapiro's critics hint at a better approach, which would eschew predictive testing in favor of testing the applicability of the theory to particular cases.

In Capitalism and the Jews, Jerry Z. Muller attempts to resolve Milton Friedman's paradox: Why is it that Jewish intellectuals have been so hostile to capitalism even though capitalism has so greatly benefited the Jews? In one chapter Muller answers, in effect, that Jewish intellectuals have not been anticapitalist. Elsewhere, however, Muller implicitly explains the leftist tendencies of most intellectuals—Jewish and gentile—by unspooling the anticapitalist thread in the main lines of Western thought, culminating in Marx but by no means ending with him. Thus, Milton Friedman saw a paradox where none existed. This may have been because Friedman was an economist, and economics is the one strand of Western thought that is, by and large, procapitalist. To an economist, opposition to capitalism may be paradoxical; to noneconomists, economics is alienating in its form and in its content. There is thus no mystery as to why intellectuals, including Jewish intellectuals, tend to shun economics and therefore gravitate to the left.

The financial crisis was caused by the complex, constantly growing web of regulations designed to constrain and redirect modern capitalism. This complexity made investors, bankers, and perhaps regulators themselves ignorant of regulations previously promulgated across decades and in different “fields” of regulation. These regulations interacted with each other to foster the issuance and securitization of subprime mortgages; their rating as AA or AAA; and their concentration on the balance sheets (and off the balance sheets) of many commercial and investment banks. As a practical matter, it was impossible to predict the disastrous outcome of these interacting regulations. This fact calls into question the feasibility of the century-old attempt to create a hybrid capitalism in which regulations are supposed to remedy economic problems as they arise.

Liberalism sanctifies the values chosen by the sovereign individual. This tends to rule out criticisms of an individual's “preference” for one value over another by, ironically, establishing a deterministic view of the self that protects the self's desires from scrutiny. Similarly, rational choice approaches to social theory begin with previously determined individual preferences and focus on the means by which they are pursued, concentrating on the results rather than the sources of people's values.A striking new attempt to go behind the liberal and rational‐choice starting point in order to understand political preferences is found in Aaron Wildavsky's Cultural Theory. Yet Cultural Theory does not facilitate the criticism of preferences, because its understanding of them is fundamentally liberal. Even while rejecting methodological individualism, Cultural Theory's monocausally social theory of preference formation retains in a new guise the liberal preservation of preferences from criticism by reestablishing a deterministic view of the formation of values, leading it to share with liberalism an a historical view of their origins.

Economists tend to view ignorance as “rational,” neglecting the possibility that ignorance is unintentional. This oversight is reflected in economists’ model of “information search,” which can be fruitfully contrasted with “information browsing.” Information searches are designed to discover unknown knowns, whose value is calculable ex ante, such that this value justifies the cost of the search. In this model of human information acquisition, there is no primal or “radical” ignorance that might prevent people from knowing which information to look for, lacking omniscience. Unlike ignorance that is rationally chosen on the basis of an accurate cost/benefit calculation, radical ignorance can explain human error. An account of error as grounded in radical ignorance bypasses the need to appeal to irrationality in order to explain economic (and other) mistakes.