There are two simplistic ways to do economic history. The first is the muddy, materialistic, and miserly (plus Marxist) approach. The second is the airy, heavenly, and idealistic approach. I want to propose a third.
In the first, all the dependent variables are functions of material incentives. Why did the Industrial Revolution happen? Because property rights were secured, and long-term capital investments became worthwhile. Why is church attendance going down? Cable-TV has provided an ample substitute on Sunday mornings. Why did some Communist revolutions succeed and others fail? The successes occurred when the material interests of enough classes aligned. The basic tools of supply and demand explain the earthquakes and avalanches of human society, in all its peaks and valleys. (Figure 1)
The second approach can’t be expressed as a function, or if it can, it’s non-continuous and non-differentiable. Think of a Dirac-delta function. Why did the Industrial Revolution happen? The heroes of the Enlightenment wrote great tracts on liberty unleashing the spirit of human creativity and flourishing. Why is church attendance going down? The same spirit of Enlightenment has shown the old gods to be obstacles to human advancement. Why did some Communist revolutions succeed and others fail? Because some failed to properly enliven the proletariat with ideas, rhetoric, and revolutionary spirit. Supply and demand may have its place, but the primary agents of change are exogenous ideas. Ideas fall like manna from heaven. They’re a free lunch and we all get a slice. (Figure 2)
Both of these are caricatures, and I don’t believe any serious economist believes them in totum. The materialistic approach runs counter to the lived experience of being a human. Most people are motivated in business, love, and war by ideas. But the idealistic approach also runs counter to life on a material planet. Just as many people are motivated by money, pleasure, and navel-gazing self-interest. Most of life is shoving your meat bag around the planet as efficiently as you can. There’s a tension between both styles of explanation. I want to propose a third approach that hopefully incorporates the insights of both.
What is the primary actor in biological evolution? Is it the mutations of the DNA, or is it the shape of the environment? Well, the environment, after all, is what “naturally selects”, but without mutations there would be no gas for evolution to get going. One could contend that as long as mutations occur, the environment is actually the final decider waiting for the one mutation that will survive, but why do we have to presume that there is only one potential mutation that the environment will select for? Suppose there are three possible mutations that we can evolve into (A, B, and C). If the environment tells us that B will not survive, then it is still up to the randomness of mutations to decide whether we go for A or C. If the environment selects against people that are five-foot tall, we may evolve into either four-foot tall or six-foot tall creatures. From that point on, the mutations that were chosen in the past create the new environment that selects for future mutations. There are two independent operations, the source that chooses mutations and the choice that selects for them. But when put into action over time, the environment selects the mutations that survive, and the mutations that survive create the environment. This understanding of evolution as a guide to human history is primarily motivated by William James’ essay “Great Men and their Environment”.
How many counterfactual histories depend on questions about individuals? What if Hitler had gone to art school? What if Columbus hadn’t gotten the funding for his voyage? What if Mary told Gabriel no? Individual human lives, ideas, and the spirit that they infuse the world with are like novel mutations on the human soul. But the society of incentives and interests that they’re born into remains ever-powerful. Wycliffe’s reformation didn’t work, but Luther’s did. The Reds beat the Whites on the battlefield and determined the 20th century for Russia. Sometimes the commodities market does matter more than the marketplace for ideas.
Beliefs and Institutions. A chicken and an egg problem or are they two sides of the same coin? When somebody says that they are Catholic, does this mean that they are part of an institution or that they hold a set of beliefs? Jesus was the meeting place of heaven and earth, “The Word made flesh”. Institutions are “beliefs made flesh”. Institutions aren’t just necessary for the proliferation of beliefs, they are also the product of beliefs themselves.
One of my walking routes on campus is through the Music and Theater Building bridge that borders College Hall. It’s a spot for either econ students or music students, and lucky me this time got to see my good pal Hayden Busby. Hayden was sitting with a friend of his, Luke Ratcliffe. Luke and I have a lot in common. We both are half-Armenian, we both visited the homeland this summer, and have unorthodox (and ironically heterodoxical orthodox) theological views. Oh, and we both listen to progressive metal. It was a wonderful friend meet friend moment that happens all too rarely. And I had another one a couple of nights ago in my mind when I realized that C.S. Lewis and F.A. Hayek have an eerily similar conception of freedom.
William James had a famous articulation of the relationship between God and Man as a chess-game.
“Suppose two men before a chessboard, the one a novice, the other an expert player of the game. The expert intends to beat. But he cannot foresee exactly what any one actual move of his adversary may be. He knows, however, all the possible moves of the latter; and he knows in advance how to meet each of them by a move of his own which leads in the direction of victory. And the victory infallibly arrives, after no matter how devious a course, in the one predestined form of check-mate to the novice’s king. Let now the novice stand for us finite free agents, and the expert for the infinite mind in which the universe lies.”
(James 1896, 180.)
In this case, God’s power is not diminished and free-will is allowed. The novice player has free will in its moves, but can never defeat the master. This model has a double practical punch. First, it places God in time. He will be making moves in the future that we cannot yet foresee. Second, it gives meaning to each individual move that we make in the here and now. Though, we know who wins the game, our moves now are a part of that tapestry.
The power of this metaphor transferred over to C.S. Lewis. In the second chapter of The Problem of Pain, Lewis is addressing the technical issues of God’s Omnipotence. A standard objection to the Augustinian theodicy (that God has granted us free will thus resolving the problem of evil) is that even if we freely choose evil, God ought to intervene repeatedly to correct all of our errors.
“We can, perhaps, conceive of a world in which God corrected the results of this abuse of free will by His creatures at every moment: so that a wooden beam became soft as grass when it was used as a weapon, and the air refused to obey me if I attempted to set up in it the soundwaves that carry lies or insults. But such a world would be one in which wrong actions were impossible, for the cerebral matter which we use in thinking would refuse its task when we attempted to frame them. All matter in the neighborhood would be liable to undergo unpredictable alterations.”
(Lewis 1944, 24-25)
If God was to take this course, we would actually lack the freedom he wants to give us. Omnipotence means that God can do anything but impossibilities are not even things in the first place. If the arena of my free action is entirely controlled, I was in fact never free. Free will is not a mere attribute of a soul, but rather a by-product of the interaction between a being and its environment.
Miracles, however, do happen and are an important part of the Christian faith.
“That God can and does, on occasions, modify the behavior of matter and produce what we call miracles, is part of the Christian faith; but the very conception of a common, and therefore stable, world, demands that these occasions should be extremely rare. In a game of chess you can make certain arbitrary concessions to your opponent, which stand to the ordinary rules of the game as miracles stand to the laws of nature. You can deprive yourself of a castle, or allow the other man sometimes to take back a move made inadvertently. But if you conceded everything that at any moment happened to suit him – if all his moves were revocable and if all your pieces disappeared wherever their position on the board was not to his liking-then you could not have a game at all. So it is with the life of souls in a world: fixed laws, consequences unfolding by causal necessity, the whole natural order, are at once limits within which their common life is confined and also the sole condition under which any life is possible. Try to exclude the possibility of suffering which the order of nature and the existence of free wills involve, and you will find that you have excluded life itself.
(Lewis 1944, 25)
Lewis invokes the same metaphor of a chessboard to get his point across. God can make exceptions to his own rules and preserve the stable environment for free action, but he can’t go all the way.
The Constitution of Liberty (1960) is Hayek’s first comprehensive shot at articulating his political vision. He is not talking about a mystical document, but rather asking “What constitutes Liberty?” It’s very difficult for him to articulate directly what Liberty is. Most of the book is a description of the institutional conditions of liberty. Liberty, simply put for Hayek, is the absence of coercion. He then goes to great lengths to show what coercion is. Coercion (though he squirms on his own definition) is when one person’s will absolutely dominates another. When one man’s mind is made into the tool of another’s. Hayek curiously finds like Lewis that control of the environment is tantamount to control of the other’s actions.
“By ‘coercion’ we mean such control of the environment or circumstances of a person by another that, in order to avoid greater evil, he is forced to act not according to a coherent plan of his own but to serve the ends of another…Free action, in which a person pursues his own aims by the means indicated by his own knowledge, must be based on data which cannot be shaped by the will of another. It presupposes the existence of a known sphere in which the circumstances cannot be so shaped by another person as to leave one only that choice prescribed by the other.”
(Hayek 1960, 71)
In more political language, one may have freedom of thought, and freedom of desire, but if they have no freedom of property, their previous freedoms are meaningless. Whoever controls the means controls the actual ends. As Hayek took lengths to point out in The Road to Serfdom, one cannot be liberal in their politics, but be socialist in their economics.
Unfortunately, coercion is sometimes necessary to prevent coercion. To preserve a sphere of freedom, the defensive coercion must be institutionalized in rules which are generally fixed and announced beforehand. The realm of government action may include coercion, but it must be in a fixed rule. Thus, the executors of government power have little control over its actual scope.
“Coercion according to known rules, which is generally the result of circumstances in which the person to be coerced has placed himself, then becomes an instrument assisting the individuals in the pursuit of their own ends and not a means to be used for the ends of others.”
(Hayek 1960, 72)
I hope the similarity is not lost. Government, like God, has the power to manipulate the environment, though in a much more limited sense. In both cases, God to man and government to citizen, individuals are only free if the rules instituted above are generally untampered with. They are “fixed and announced beforehand”. The actor’s free constructions can only be erected on stable ground. The expectation that a certain zone will not be tampered with is an important facet of the willingness to build anything out of it in the first place.
Hayek stresses in his first chapter, that he is not speaking about metaphysical but simply personal liberty. I’d like to push against him on this. The Bible can be read as a social story between God and his creation. If we are in a relationship with a personal God, then metaphysical liberty is just a form of personal liberty that Hayek articulates. Both God and government, if they are to offer us freedom (which God does and government can), establish the rules by which they operate and only rarely deviate. Churches must operate in the same way so that parishioners are not the theological slaves of their priests. There’s a lot more to unpack here in church history and economics of religion that I hope to work on in the future.
Appendix: Tolkien’s Theodicy
In the 2nd chapter of the Quenta Silmarillion titled Of Aulë and Yavanna, we find a wonderful example of the chess-playing God at work. Eru had created the world, and the Valar (the pantheon of archangels/gods) were hard at work preparing it for the coming of the Firstborn Children of Illúvatar, the elves. Aulë, Valar of stone, became impatient with the dumbness of the world, and he made the first dwarves and hid them under a mountain. Eru, in a very Garden of Eden fashion, sees under the mountain and rebukes Aulë for his impatience. The elves are the intended firstborn, and the dwarves are a deviation from Eru’s plan. Eru commands Aule to destroy his own creation with his hammer, but at the last moment stays his hand (in a very Abraham and Isaac fashion).
Eru, though displeased with Aulë’s disobedience, sees that the dwarves are good handiwork and permits Aulë to keep them as long as they stay asleep until the elves awaken. Yavanna, Aulë’s wife and Valaress of Arda’s flora and fauna, become worried at the prospect of the dwarves. Dwarves, when they awaken will have no affinity for the trees, but they will need lumber for their mining operations. To counter this propensity in the dwarves, Yavanna creates the ents as shepherds of the trees.
Neither the dwarves, nor the ents, were necessarily part of Eru’s design, but he allows his creation the ability to go in that direction. Regardless, every fixed element of his plan still goes as follows. The elves are still his firstborn children to experience the world, and the rest of Arda’s history unfolds despite several new tensions that arise.
Religious liberty (along with freedom of speech and other pals huddled together in the First Amendment) is one of the less controversial aspects of our Classical Liberal Heritage. The purpose behind freedom of religion, however, I believe has become incredibly muddled. Two major defences of religious liberty have emerged. One believes that religion essentially doesn’t matter all that much, and the other that religion is of the utmost importance in the lives of individuals as well as the well-being of society. Just because they have the same conclusion does not mean that both defences are of equal value. They may have divergent implications under different external pressures.
The first defence I will call the lollipop religion defence. In a lollipop conception of religion, each religion is a different flavour that you can pull out of a bag. “Oh wow, I like a Jesus super-duper whole lot !”, the Christians say. “Yipee”, the Buddhists exclaim, “I’ve reached Nirvana”! Thus, from the supposedly “objective and secular” position, we are supposed to conclude that both religions are just fine and dandy little hobbies that people have. Criticizing what flavours others enjoy is clearly erroneous. It obviously makes them happy. What could you have against that? When one flavour club tries to sabotage another flavour club, they are clearly acting out of a bizarre irrational faith-based delusion. Religious Liberty is the much-needed replication of de gustibus non disputandum in the realm of beliefs about ghosts or burning bushes or whatever.
The second defence is the aspirational defence. This conception takes the truth in religion or any all-encompassing worldview seriously. The purpose of religious liberty, in this case, is to take control of religion out of any single or small group of human’s hands. No political or priestly class can wholly control the content nor application of any religion. The separation of Church and State is the separation of religious belief and the use of violence. Not the separation of religion from what forms people’s public lives. The lollipop defence of religious liberty asks everyone to partake in a public secular religion of the Enlightenment and practice their religious beliefs in private. The aspirational defence lets people live their religious lives to the fullest but limits the extent to which anyone, religious or not, can use the power of the state for their ends. In Civil Society, religions are able to clash and conflict. Muslims and Christians are allowed to proselytize as long as they respect the secular rules of property, contract, and consent. Nobody is asked to replace God with the State in this instance, but the excesses of religious fanaticism can be similarly curbed.
Freedom of Religion does not imply “Coexist” in the same way that freedom of speech does not imply all opinions are equally valid. The limits on the powers of the government must by extension cover all ideologies and plans, not just religion. Otherwise freedom of religion would be a policy that punishes religious worldviews over secular ones and would encourage religions to secularize themselves in order to compete with non-religious worldviews. Thoughts?
Edit: This is a quote from Mises’ Liberalism that I thought appropriate to clarify: “[W]hat impels liberalism to demand and accord toleration is not consideration for the doctrine to be tolerated, but the knowledge that only tolerance can create and preserve the condition of social peace without which humanity must relapse into the barbarism and penury of centuries long past” ([1927] 1985, 34) quoted in Peter Boettke’s F.A. Hayek: Economics, Political Economy, and Social Philosophy (2018) pg. 267
