Spontaneity and order




Ten years ago, I began a piece in The Economist about Hong Kong with a paragraph that was, in this particular context, intended to be surprising:

FRIEDRICH VON HAYEK and Walter Eucken parted company over the issue of power formation in the private sector. Hayek, a leader of the Austrian school of liberalism, believed that keeping government small was enough to preserve competition. Eucken, who founded the school’s German branch, felt that anyone with excessive power, whether a government or a company, could threaten economic freedom. It is a pity that neither was alive this week to analyse the case of Hong Kong….


Eucken (click for credits)


Our local readers in Hong Kong quite enjoyed this framing of what they considered their “little” hometown business controversies, since they don’t usually see their city connected to the big debates among Western intellectuals.

I, however, was fascinated by precisely those local controversies, for two reasons:

  1. I consider Hong Kong the freest place in the world (and thus worth studying), and
  2. I have a personal connection to that debate between Hayek and Eucken, which I’ll tell you about at the end of this post.

Liberalism vs Libertarianism

What reminded me of all this was a post the other day by one of my colleagues about the two isms, Liberalism and Libertarianism. He concludes that the difference is basically about the precise role of government and

which approach is likeliest to lead to the most freedom.

So, because I’ve been parsing Liberalism here on The Hannibal Blog for a couple of years now, I thought I’d add a “continental” twist for those of you who are connoisseurs of all things liberal.

Between Freiburg and Vienna


Mises (click for credits)


For a lot of “Anglo-Saxons”, in my experience, the first surprise is that that there is a continental twist at all. Surprise turns into shock when the twist turns out to be specifically Germanic. Could Germans really have much to say about freedom?

Well, yes, a whole lot. The liberal tradition is long and deep in the German-speaking countries. Obviously it suffered a near-death experience during the Nazi years, but then it came roaring back in the post-war years.

More to the point, a lot of what we now tend to think of as “Anglo-Saxon” ideas actually have an intellectual pedigree that goes back to these “Germanic” (mainly German and Austrian) thinkers.

Ludwig von Mises (above) was the first giant of the so-called “Austrian School”, and in turn influenced the even more gigantic Friedrich von Hayek. Hayek in turn influenced Milton Friedman, who in turn influenced Ronald Reagan and Margaret Thatcher, thus re-branding Austrian Liberalism in the minds of many people as an “Anglo-Saxon” thing.




Walter Eucken, on the other hand, founded the so-called “Freiburg School” of Liberalism (after the university town where they hung out), which included liberal thinkers such as Alexander Rüstow (above) and Wilhelm Röpke (below).




How spontaneous is order?

The first and most important thing to understand about all these thinkers is that they were friends. They liked each other’s company and liked debating one another. They viewed themselves not on opposing sides of anything, but on the same side: the side of individual freedom (which is what all classical Liberals agree on).

The subtlety that kept them busy (and I deliberately oversimplify) had to do with order. The Latin for order is Ordo, so the Freiburg School eventually even called themselves Ordoliberals.

Order, as opposed to anarchy, is necessary for individuals to be free. The question, however, is whether or not order comes about spontaneously.

Option 1: Yes

If the answer is Yes, as the “Austrians” basically believed, then the conclusion has to be that we simply need to keep government out of the equation entirely.

The “market” (and this could apply to more than material things — ie, ideas, culture, etc) will then “order” itself spontaneously, though competition. The prerequisite is merely the rule of law.

Option 2: Jein

The Ordoliberals did not counter that the answer is No. Instead, I would call their answer Jein (a contraction of Ja and Nein in German). Yes, markets can spontaneously create order. But that order is not always stable. Worse, that order could be of a sort that robs individuals of liberty.

What they had in mind were cartels, tycoons, cabals, and anybody else who amassed an unhealthy amount of power.

So whereas the “Austrians” worried almost exclusively about excessive government power, the Ordoliberals worried about all excessive power, whether in the private or public sector.

This led the Ordoliberals to the conclusion that government must, yes, stay limited, but must also supplement the “spontaneous” ordering of markets with “corrective” ordering. Government had to crack down hard on cartels and monopolies, for example.

My personal interest

I mentioned a personal connection to the debate. Well, I wrote my Master’s thesis at the London School of Economics about it (or rather, about an obscure aspect of it). My dad had once written his PhD thesis about another obscure aspect of it. And that was probably because his uncle and godfather was somebody by the name of Ludwig Erhard (“Uncle Lulu“). Here they are in the sixties, Lulu on the left, dad on the right:

And if Hayek influenced Ronald Reagan and Margaret Thatcher, and thus “Anglo-Saxon” policy, the Ordoliberals shaped Ludwig Erhard and thus post-war West German policy, for Uncle Lulu was West Germany’s first economics minister and then its second chancellor.

Postscript: Liberal v Libertarian (again)

So back to those two isms.

In essence, I think that Libertarians trace their evolution back to the Austrians featured here, and Liberals to the Ordoliberals.

However, those Austrian and Ordo-Liberals themselves, if we were able to bring them here today, would be puzzled by the debate. They would abhor some of the intellectual excesses committed in both names, and remind us that they were originally almost indistinguishable.

High on freedom and honest debate

I find that a great test of whether your instincts are liberal (as classically and correctly defined to mean freedom-loving) is how you approach the question of legalising marijuana.

In the current issue of The Economist I try to summarize the debate in California about Proposition 19 in November, a ballot measure that would legalize cannabis for those 21 or older.

And in an accompanying podcast, I interview an opponent and a proponent of legalization, both carefully chosen, in an attempt to get beyond mere gut instincts to clarify the arguments for and against. I wonder how you guys would interpret that conversation.

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Individuals, tribes & classes

How do genuine liberals (as correctly defined) view the world? As a collection of individuals.

How do conservatives view it? As a collection (clash?) of cultural communities.

Socialists? Economic communities (or blocks).

Communists? Classes.

Fascists? Tribes, nations or races.

People have drawn many diagrams to depict the political spectrum. But they don’t make sense to me. So I drew my own (in the new Google Draw. Try it.) Here it is:

This way of looking at the spectrum might help you to explain “left” and “right” to a child, should you ever need to. (More about the historical and arbitrary origins of “left” and “right” in a subsequent post.)

If you view the spectrum not as a matrix or a line but as a loop or circle, things become clearer. Liberalism then reveals itself to be not the “place in the middle,” the “split-the-difference” no-man’s-land of compromise and moderation, but the extreme and radical opposite of collectivism, which includes everything from Nazism to Communism.

Yes, Liberals care most about freedom, whereas collectivists tend to care more about “equality” (insofar as it pertains to the group of interest to the respective collectivist — ie, the class or the tribe.)

But the debate is not merely about the desired outcomes — freedom vs equality — of policy. It goes deeper. It is a debate about the unit of analysis. What — or rather whom — do we care about? What matters?

As a liberal, I instinctively choose individuals. People matter.

Now, it’s easy to lampoon this instinct. The caricature usually involves a quote from Margaret Thatcher, when she allegedly said:

There is no such thing as society. There are only individuals.

Here is what she actually said. As you can tell, it doesn’t come close to Ayn Rand in shrillness.

Individuals do form families and other groups, and liberals do care about those. But those are groups that individuals volunteer to form. (By contrast, I never volunteered to be American, German or middle class. Most of the time, I’m not even sure what those group memberships are supposed to mean.)

Let’s talk about Arizona

Enough prologue. Let’s talk about the new Arizona law against illegal immigration.

In my article in the new issue of The Economist, I try to analyze how the law and the backlash against it might affect American politics. My editor wrote a “leader” (ie, opinion editorial) to go along with it. And both of those pieces follow a short piece I whipped up the other day, when the law was first signed.

Now, it may not surprise you to learn that, in addition to the hundreds of, shall we say, passionate comments on our website, I have also been getting reader letters.

I have already regaled you with you my cavalier amusement at the tone of the American reader letters I get. But I must say, the mail bag of late has taken another turn for the worse. I leave it to your imagination.

So let’s step back and try to understand why I, and The Economist, would instinctively be

  • for more open borders,
  • for more liberal migration laws,
  • for freer movement of people.

Is it because I love Latinos, as some of my reader letters suggest (albeit in a different vocabulary)?

Well, yes it is. I do love them. Though no more so than I love Eskimos, Wasps and Tibetans. I love them all, but only as individuals.

There was a time, not all that long ago, when only diplomats carried passports. Other people moved freely where they wanted to go. Just read Casanova’s memoirs. 😉

This sounds like an ideal world: Free individuals and families moving wherever they want to go, with a minimum of hassle (besides the natural stress of moving).

I admit that this was before some countries had welfare states which might attract poor migrants and thus be overwhelmed. This issue — whose taxes pay for whose benefits in a given land — must be addressed.

And I also admit that this was before terrorists (who already existed) had access to weapons of mass destruction. So this issue — how do we keep murderous migrants out — also must be addressed.

On the other hand, I do not admit that immigrants in general, whether legal or illegal, are more likely than natives to commit crimes, because research proves this not to be true.

Garden of Earthly Delights

So what would a liberal Utopia look like?

All individuals anywhere would be free to move to and live where they please, within basic and minimal parameters to address the two issues above.

Americans, for example, would be allowed to go to Latin America or Europe to pursue careers, loves and dreams. Latin Americans and Europeans would be just as free to come to America to do the same.

This would apply to the “high-skilled” migrants, such as Indian graduates from the Indian Institutes of Technology (IIT), probably the best university system in the entire world today. And it would apply equally to “low-skilled” migrants, because they, too, have contributions to make and dreams to pursue.

Is this realistic? Probably not.

But is it desirable?

That depends whether you view the world largely as tribes, classes or, as I do, individuals.

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The best tax for America

It is Tax Day again in America and some people left their returns to the last minute (as you can see on this photo, which I took in Los Angeles yesterday.) So I’ll take this occasion to muse about the relationship between America’s tax system and freedom.

One year ago today, I offered some “tax day thoughts on complexity in American life.” The gist of that post was that the complexity of America’s tax system, not the rate of taxation, is what harms freedom in this country. Contrary to what you might think if you go to Tea Party rallies, we are not overtaxed, we are badly taxed.

But I did not offer a better — meaning simpler — alternative system. In this post, which I expect to be controversial, I want to do that. (As always, keep in mind that the views expressed on The Hannibal Blog are mine alone, not necessarily those of The Economist.)

There are many proposals out there for a simpler and more efficient tax system: A flat tax, value-added tax, et cetera. I won’t review them all, but instead pick the proposal that I consider simplest, cleanest and boldest.

The Idea

It is the so-called FairTax Plan.

Part of its strength (ie, simplicity) is that I can describe the entirety of America’s proposed tax code in a few short lines:

  • America’s existing income and other taxes would be abolished. (Not cut, but eliminated!)
  • The IRS and America’s other organs of proto-authoritarian oppression would also be abolished.
  • Instead, all Americans would pay a national sales tax, as most Americans already pay state or local sales taxes.
  • In addition, all Americans would get a prebate — ie, at the beginning of each year, everybody gets a check.

And that’s it!

The drafters of the proposal think that the rate of this new national sales tax needs to be about 23% to provide the same revenues that we now get from the income tax. It might be 28% or 19%. I’m not the least bit interested in that.

The idea is that we raise as much money as we would otherwise raise through an income tax. As it happens, we would need to collect quite a bit less than we currently do, because we would no longer incur the enormous costs of the IRS bureaucracy, auditors and accountants!

Now for the discussion of the advantages and alleged disadvantages of this new tax system:


I think the advantages are self-explanatory:

  • You would keep your whole pay check. Ie, your take-home pay would spike right away.
  • You would not have to file a tax return.
  • No more record-keeping! You no longer maintain mountains of paper for wages, the cost basis of your investments, mortgage deductions, childcare and nannies, et cetera et cetera.
  • IRAs, 401(k)s, Roth IRAs, Keoghs…..: You can throw them all into the trash, because all your investments are by definition untaxed.
  • Thanks to your annual prebate (which gives you a certain amount of subsequent sales tax “back”), a portion of your consumption is untaxed, too.
  • But beyond that, all your consumption is taxed, thus making you think twice about frivolous and unnecessary consumption, which reduces your carbon footprint and clutter.
  • Whenever you do consume (either goods or services), you can see the tax you pay on the receipt, in the clearest and simplest manner possible.
  • All this amounts to: transparency (replacing opacity) and freedom (replacing anxiety and bureaucracy).


There is only one major criticism of this sales tax, but it is a big one, so I want to concentrate on it.

The disadvantage is that this sales tax, like any consumption tax, at first glance appears to be regressive.

In the current system, rich people pay not only absolutely but relatively more of their income than poor people. (There is a reason why I italicized that phrase. Keep reading.) In the new system, poor people (who might need to spend, rather than save, all their income) would seem to pay relatively more of their income than rich people.

And this seems unfair.


I’ve pondered this for some time. As you may remember, I am a liberal, correctly defined (ie, libertarian but not loony). And I do worry about inequality, which is inevitable in a free society to some extent but in excess (ie, in America) harms freedom.

Part I

My first response to the above criticism is that our current income tax (ie, that which the FairTax proposes to replace) is not fair either!

Warren Buffett has famously explained how he, as a mega-rich investor who does no “tax planning”, pays a lower tax rate than his secretary, who lives off her meager pay check.

Fairness, it turns out, is not about progressive tax brackets. If you have progressive brackets but exceptions to everything (= “complexity”) you get not fair but unpredictable and arbitrary taxation.

So if you do care about fairness, first join me in stipulating that our current system must go.

Part II

My second response is to ask you to re-examine, as Socrates might, what wealth is.

Is it:

  1. to have vast stores of potential spending power (ie, paper statements of bank balances that produce income)?
  2. or to consume vast amounts of resources, human and natural, with your own or others’ (borrowed) wealth?

Our current conventional wisdom says 1. So if income is the definition of wealth, then a consumption tax is regressive.

I propose that the correct definition is 2. So if consumption is the definition of wealth (as it used to be for almost all of human history), then a consumption tax is fair.

Example: Croesus and Diogenes

Let me illustrate that point playfully by reviving two characters who have previously featured on The Hannibal Blog:

  • Croesus, the ancient king of Lydia who gave us the phrase “rich as Croesus”, and
  • Diogenes, the Greek cynic who chose to live in a barrel (and who is a hero of mine).

Let us assume that Croesus and Diogenes are equally rich in our Number 1) definition: Both get huge amounts of income from assets (Croesus from tribute, Diogenes from the equivalent of a trust fund set up by his benefactor, a wealthy Athenian).

Now let’s think about how the FairTax would treat these two rich guys:

Both Croesus and Diogenes would start every year by getting their prebate check. Their basic cost of living, their subsistence, is thereby pre-paid.

Diogenes can buy the few things he needs (dog food, loin cloth, etc) and his prebate covers the sales tax on these items. He pays no net tax at all, in other words.

(Meanwhile, he has millions in his bank account, sitting idle for him, but being lent out to other Athenians to grow the economy.)

Croesus is different. He sneers at his prebate check, which barely covers the sales tax on a single slave, and spends it in a day. Then he keeps spending: Gold, silver, jewels, women, palaces, feasts, galleys, ….

He consumes immoderately and to the detriment of his planet. But he is free to do so (freedom is one of our goals), and nobody even looks askance at him. However, each time he spends, he pays tax, and he knows exactly how much (transparency and simplicity are our other goals).

The years go by, and Diogenes donates his potential (= hypothetical) wealth to an anonymous Athenian. His wealth has been helping the economy all these years, because it was being lent to entrepreneurs. But now the Athenian recipient spends the wealth. And as he does so, he pays tax.

The taxes on Diogenes’ money were therefore only delayed, until such time as his wealth turned from potential into actual consumption. The taxes on Croesus’ money were immediate, because he chose to spend.

Every single dollar in the economy is therefore taxed, but only when it becomes consumption.

At a very fundamental level, this is how it ought to be. We should not calculate equality based on income but on consumption. If I have more than you but live more modestly than you, I should not pay more than you. This is the mental switch I ask you to attempt.

I believe it is fair that Croesus pays lots of taxes all along, but that Diogenes, who never consumes much, does not.

Effect on politics

A final thought about what the FairTax would do to our political discourse and climate.

Our current tax system is as complex as it is because it is the tote bag for our politicians: Any weird political give-away — to owners of gold mines or race horese, homeowners or Prius drivers…. — gets dressed up in Congress as a “tax break” and stuffed into the code. Each time that happens, society as a whole loses, but nobody notices because, well, the tote bag is too messy to see any individual item in it.

Complexity, in short, is the tool politicians and lobbies use to hide things from our attention.

If we switch to the FairTax, the tote bag is dumped and replaced by two and only two numbers:

  1. rate of sales tax, and
  2. the amount of the prebate check

Every American could understand this system and therefore participate in our debates about government, funding and fairness.

Should more people be exempt from all taxation? Fine, raise the prebate amount.

Is government too big? Fine, cut the sales-tax rate.

But what what if we still want to help particular groups of people? Earthquake victims or people whose homes are being foreclosed, for example.

Today, we would stuff more gibberish into our tote bag and nobody would notice the cost.

Under the FairTax, we could still help these people, but we would no longer do it through the tax code. We would pay these groups actual cash.

This, of course, would be transparent and easy to measure. Once again, we could all debate whether home owners in foreclosure actually deserve this cash (perhaps not) or whether earthquake victims do (probably).

We would understand what’s going on in our country as well as in our own finances, and understanding is the beginning of freedom.

A shocking thought, isn’t it?

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Intelligence and liberalism

Probably Republican

The Hannibal Blog recently introduced you to Satoshi Kanazawa, a controversial evolutionary psychologist.

A willingness to be controversial, when paired with actual research and intelligence, is a trait The Hannibal Blog applauds. Even so, you guys appropriately rang the alarm bells about some of Kanazawa’s more out-there views in the comments under my post.

That said, those views were not the ones that I found interesting (or had even been aware of). So allow me to re-introduce you to some of Kanazawa’s thinking.

1) The Savanna Principle

Evolutionary psychology starts with the premise that our brain, like our liver or eye or gonads, has evolved. This immediately leads to interesting insights, such as The Savanna Principle, a term that Kanazawa coined.

It states that we (Homo sapiens sapiens), having spent most of our evolutionary time in the African savanna, have adapted to its circumstances. We have not had much time (in terms of generations) to adapt to modern life. Therefore

the human brain has difficulty comprehending and dealing with entities and situations that did not exist in the ancestral environment.

(The word difficulty is important: Dealing with modern circumstances is not impossible, merely difficult.)

Thus, humans will see a banana as yellow (= recognizably edible) under all conditions except in a parking lot at night, because sodium vapor light did not exist in the savanna.

Let’s take another easy example. I recently railed against driving while texting or talking on the phone (the former is worse than drunk driving, the latter is as bad). Why are both activities so dangerous (whether or not you use “hands-free” devices)? Well,because

carrying on a conversation with someone who is not present in front of you is evolutionarily novel. Our ancestors never carried on a conversation with anyone who is not present in front of them or whom they could not see during the conversation. We have had the telephone (which allows us to have such conversations) for more than a century now, but it is still evolutionarily novel. Our brain has not adapted to the telephone in the last century. So it is possible that telephone conversations per se, not necessarily cell-phone conversations, are cognitively taxing and distracting because they are evolutionarily novel.

Everyone (legislatures and publics alike) assumed that what was causing the accidents was the manual and mechanical handling of the device, not the conversations per se. After all, drivers have conversations with fellow passengers all the time, with seemingly no effect on safety. [But] drivers who use hands-free devices are just as likely to cause road accidents as those who use hand-held devices.

2) Relevance to intelligence

More recently, Kanazawa has been thinking about how intelligence might have evolved in the Savanna, given that it would have been mostly useless there.

By intelligence he means general intelligence, as opposed to any set of specific adaptations to address specific threats in the Savanna (such as the specific ability to recognize a cheater in a social setting). Put differently, how and why would Homo sapiens have evolved to deal with any novel threat?

Well, it must have evolved since we left the Savanna. Our departure meant that we started encountering one (evolutionarily) novel situation after another, and those of our ancestors who happened, by mutational chance, to be better equipped to think about these new situations would have had a reproductive edge.

But intelligence can be misunderstood. As Kanazawa says:

more intelligent individuals are better than less intelligent individuals at solving problems only if they are evolutionarily novel. More intelligent individuals are not better than less intelligent individuals at solving evolutionarily familiar problems, such as those in the domains of mating, parenting, interpersonal relationships, and wayfinding (finding your way home in a forest), unless the solution involves evolutionarily novel entities. For example, more intelligent individuals are no better than less intelligent individuals at finding and keeping mates, but they may be better at using computer dating devices. More intelligent individuals are no better at finding their way home in a forest, but they may be better at using a map or a satellite navigation device.

3) Relevance to politics

The controversy starts right about now.

One by-product of this recently evolved general intelligence, according to Kanazawa, is an ability to empathize with people to whom we are not genetically related.

In the Savanna we only cared about kith and kin, because we hardly knew anybody else. (We lived in groups of up to about 150 individuals, the so-called Dunbar number.) Modern cities or countries did not exist.

But they exist today, as evolutionary novelties. Does general intelligence help us to deal with the situation?

Yes, says Kanazawa, by making us “liberal”. He uses not the correct and traditional definition but the modern American definition of liberalism

as the genuine concern for the welfare of genetically unrelated others and the willingness to contribute larger proportions of private resources for the welfare of such others. In the modern political and economic context, this willingness usually translates into paying higher proportions of individual incomes in taxes toward the government and its social welfare programs. Liberals usually support such social welfare programs and higher taxes to finance them, and conservatives usually oppose them.

And indeed, he has found a certain correlation between intelligence and liberalism:

And by the way, Kanazawa considers himself conservative.

So, as he says in a follow-up post, this is not to imply that liberals are “smart” and conservatives “dumb” in the conventional sense.

In fact, it may well be that liberals lack, and conservatives have, “common sense” — if by common sense we mean precisely that more pristine and specific intelligence that allowed our ancestors to survive and reproduce in the Savanna.

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Hayek on healthcare: Don’t be serfs, Americans!



I’ve only mentioned Friedrich von Hayek tangentially on The Hannibal Blog so far, although he probably deserves his own post in my great-thinker series quite soon. Hayek was one of the great liberals, properly defined. He was close intellectually and personally to my great-uncle Ludwig Erhard. His book The Road to Serfdom should be required reading.

So I was glad to see Andrew Sullivan revisit The Road to Serfdom to see whether Hayek addressed the topic of health care that so captivates America these days. Hayek did, it turns out, and I had forgotten.

(Recall that I, also with classical liberal instincts, concluded, in my amateurish way, that health care is different enough from other industries to warrant one of two clean and equally acceptable solutions: universal private insurance or universal government–ie, “single-payer” insurance. Anything, in short, but America’s current, fragmented, employer-government-individual hodgepodge.)

Here is Hayek, from Chapter 9 of The Road to Serfdom, via Andrew:

Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision…. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance – where, in short, we deal with genuinely insurable risks – the case for the state’s helping to organize a comprehensive system of social insurance is very strong… Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make the provision for the consequences, such communal action should undoubtedly be taken.

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Your pinko, Commie snob

Well, things change when you take a new beat, as I recently did (and as we regularly do at The Economist). In this case, I switched from a rather geeky beat–Silicon Valley–to a more general beat–politics and society in the Western states. Mostly, I’m thrilled about this new, and much bigger, hunting ground. But it comes with, shall we say, rather different reader letters.

Our reader letters at The Economist can be witty but tend to be flamingly, aggressively, rantingly, lividly hostile. What varies is the level of sophistication. Some readers really know what they are talking about, and really know The Economist, and eviscerate us effectively and brutally.

Others are, well, just plain amusing.

Here is one of the dozen or so I am perusing this morning, all informing me of my wanton and despicable ignorance and depravity. This particular letter writer reminds me that one of my recent articles

once again shows the elite arrogance and display of socialist bias on the part of The Economist.

Elite arrogance. Hmmm. Socialist bias. Hmmm.

That’s a classical liberal/libertarian from a classical liberal family writing for the world’s oldest classical liberal magazine, displaying a consistently elitist and socialist bias. Gotta love our readers. Can’t wait to read the next batch.

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Frenemies: Freedom and equality


Marianne, above, did not flash her boobs to all those corpses for nothing. She did it for the trinity (as in the tricolore she carries) of liberté, égalité, fraternité. Let’s leave fraternity, which is a rather mushy notion, to one side. That leaves liberty and equality. Do those two belong together?

I knew I would have to address this issue sooner or later in my ongoing ‘freedom lover’s critique of America‘. But the fascinating debate in the comments below this post brought it to the fore. Fortunately, that comment thread neatly summarizes the entire spectrum, across the world and history, of views on the subject. As I see it, the three options are:

  • You can’t have freedom without equality.
  • You can’t have freedom with equality.
  • It’s complicated.

The Classical Liberal view

Broadly, classical liberals (as properly defined) are passionately in favor of equal opportunity and just as passionately against enforced equal outcomes, exactly as “Hizzoner” paraphrased Friedrich von Hayek here.

Which is to say: If you (ie, the government) predetermine that everybody will be the same (think the same, dress the same, drive the same car, live in the same house…) then nobody in your society can be free, if ‘free’ means being able to be yourself, ie different than others. Why create, why achieve, why risk, if the fruits of your effort and ingenuity will be confiscated (“redistributed”) in the name of equality?

I personally glimpsed the extreme form of just such a dystopia when I peaked into East Germany months before it crumbled (although I didn’t know that it would crumble, of course). They were all driving, or on the waiting list for, the same damn Trabi. And while I was ogling their Trabis, many East Germans were already flooding into the West German embassy in Hungary, trying to escape and eventually forcing their leaders to let the Berlin Wall crumble.

That same example, East Germany, also showed what Hayek correctly predicted would happen in reality in an ‘egalitarian’ society. As Orwell might put it: Some were more equal than others. The difference was that the ‘more equal’ ones didn’t use wealth to assert their supremacy but more nefarious means–party connections, or what the Chinese call guanxi. The resulting horror was captured intimately on screen here.

And so, to those of us, like me, who were devotees of Ayn Rand, the answer was clear. Equality is the enemy of individualism, and thus of freedom.

How it got complicated for Liberals

Even at the time, however, there were some contradictions that gnawed at me. Even in the ‘free world’, we were often invoking equality. For instance, democracy, which we (perhaps wrongly) associated with freedom seemed to be based on the equality of one citizen = one vote, even as capitalism seemed to be based on the opposite, ie unequal outcomes.

Then there was the bit about equal opportunity, which we were all supposed to be for. Well, this was messy, because, inconveniently, we were biological organisms and as such insisted on looking after our offspring. Anybody who ‘makes it’ devotes his entire life, and all his resources, to ensuring that his offspring get a head start. And who can blame him?

So if ‘we’ (the government) really wanted to preserve equal opportunity, we would have to get heavy-handed and stop ‘him’ from looking after his kids. We would have to stop him not just from sending his kids to better schools and doctors, but from reading his kids all those bedtime stories, paying for all those piano lessons and SAT prep courses, building all those Lego houses with them–ie, from doing all those things that give kids ‘unequal’ opportunity. In short, we would have to take his freedom away! Obviously, a non-starter.

The triumph of biology

And then I saw a documentary. I tuned in somewhere during the middle and never saw the title, so I can’t be sure it is this one, but it might be. It was based at least in part on Sir Michael Marmot’s Whitehall Study from Britain. Here is how I remember it:

Stress: It is not the same as pressure, which we all feel from time to time. Instead, it comes from ranking low in a hierarchy and lacking power over your own time, your own self (=not being free). You who are at the bottom are at the whim of others. You suffer. And not ‘just’ psychologically, but biologically. You tend to get fat in your mid-section, and your heart, blood vessels and brain change visibly, with entire neurological circuits shriveling up. Meanwhile, the brains and hearts of top dogs expand and thrive.

The most poignant moment came when they cut from our species, Homo sapiens, to monkeys. The researchers observed packs of primates, and sure enough: a monkey at the bottom of the hierarchy got fat in his mid section, had hardened arteries and heart walls and a a shriveled brain.

Equally poignant: One group of monkeys, led by particularly aggressive alpha males, played in a trash dump and was decimated by an epidemic. Another group, more female and egalitarian, moved in and absorbed the survivors of the first group. The egalitarian culture prevailed. And voilà, the health of the surviving monkeys from the first group recovered and improved! They were slim, their hearts and arteries pumped, their brains fired on all neurons.

Let’s take this one more step toward generalization: You recall that I criticized Ayn Rand for getting individualism wrong (which took me many years to figure out). Well, I now know how she got it wrong. She did not allow or understand how inviduals, when forming groups, pick up signals from one another that change who and what they are.

Watch this amazing TED talk by Bonnie Bassler as a mind-blowing illustration of what I mean. It is not about humans per se, but about bacteria. That’s right. Stupid, single-cellular strings of DNA and surrounding gunk. The trick to understanding bacteria (→all biological critters?) is to grasp how they chemically detect the presence of other bacteria, and then suddenly change their own chemistry. Upshot: No bacterium is an island.

The case of America

Let’s now look at America. Without getting into the academic weeds, there is a proxy for social equality called the Gini Coefficient. If the coefficient is 0, everybody has exactly the same; if it is 1, one person has everything, and everybody else has nothing. So countries fall somewhere in the middle between 0 and 1. Now look at this world map:


The first thing you will notice is that the darkest blues and purples–ie, the greatest inequality–tend to be in poor countries, even in nominally “Communist” ones such as China. That’s because poor countries tend to be corrupt and feudal, with a few lords and many serfs. It is hard to consider these countries “free”.

But the second thing is more interesting. If you look at just the “developed” countries (let’s say those belonging to the OECD), you notice that one country stands out.

All the rich countries are in shades of yellow or green, meaning that they are fairly egalitarian societies. Only America is blue. America, in short, is the least egalitarian of all the developed countries.

And so? I’m not sure. The old Hayekian in me would chalk this up as a possible sign of more freedom in America than elsewhere. The new bacteriologist and epidemiologist in me wants to ring the alarm bell. This is not healthy! Sure, the Americans on top of the pecking order might show up at Party Conventions every four years and proclaim that ours is the freest country in the world. But many other Americans are simultaneously dying from their serfdom, whether they are aware of it or not.

For the time being, let’s consider freedom and equality neither friends nor enemies, but frenemies.

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Freedom lessons from Hong Kong (2): democracy


How liberating

Recall, for a moment, the famous lad who went out one Friday night, ordered gin with orange juice and got tipsy. He went out again Saturday night, ordered vodka and orange juice and got tipsy again. He loved being tipsy so much, he went out and bought himself a whole liter of … orange juice.

Let’s now look at the role of democracy in freedom. Is it the gin or the orange juice?

Last time in this thread–an emerging ‘freedom lover’s critique of America‘–I shared with you my experience of living in Hong Kong as an instructive way into understanding life in today’s America. In brief: I felt freer in Hong Kong than anywhere else I have ever lived; I feel less free in America than anywhere else I have lived.

Even as my fingers still touched the keyboard, I started bracing myself for some inevitable rejoinders. Of which the first and most obvious is: Hong Kong is not a democracy, whereas America proudly is!

Coming clean

I once belonged to a salivating pack of expatriate journalists in Hong Kong who loved to scrutinize every Asian government we covered based on its minute-by-minute body language toward democracy.

  • More democracy = approve
  • Less democracy = disapprove

It was an evergreen topic for us, easy to pitch to an editor, easy to write, easy to be smug about. Hong Kong, during its suspenseful transition from British to Chinese rule, was a particularly good place for “democracy” stories. If an errant Falun Gong meditator from Ohio or Liaoning so much as got stuck in his Lotus pose, I was ready to suspect sinister interference from the Mainland.

On the Mainland, whenever I got stuck in an interview, I whipped out that word, democracy. In Taiwan and the Philippines, officials occasionally played the trick on me: They whipped out the word to buy time. After all, what else could I possibly demand as long as the place was, you know, democratic and thus surely free.

In America, George W. Bush was composing entire inaugural addresses around just two words–freedom and democracy–as a way of explaining wars and himself. Very few people called him on that particular association. The two do seem to go together.

Hell is other demos

Actually, they do not. They can, but they need not. In Foreign Affairs, twelve years ago, Fareed Zakaria coined two powerful memes: Illiberal democracy and liberal autocracy. (That’s liberal as properly used.) He simply observed that there are an awful lot of democracies–ie, countries whose governments are chosen in elections–today whose citizens are anything but free. And there are quite a few autocracies whose people are free. Hong Kong is one of them.

Another free (ie, liberal) autocracy in history was colonial America, before the British started imposing exotic new taxes. The king was far away and left the colonials alone. They had no say in government, but did not care because they were free to live their lives. I once read somewhere (if anybody could point me to the link, I would be grateful) that this was the freest period in American history.

Next came taxation. Then the call for none of it without representation. Then the constitutional convention. And how did our founding fathers approach the issue? James Madison, possibly thinking of ancient Athens, said that:

Democracies have ever been spectacles of turbulence and conflict; have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.

In general, the founding fathers believed Polybius: the best government balances monarchy, aristocracy and democracy. Without such balance, monarchy becomes tyranny; aristocracy becomes oligarchy; democracy becomes mob rule. Today, this skepticism about democracy lives on in a small circle of libertarians/liberals such as Ron Paul, who worry about “majoritarian” oppression.

If you read this to mean that I am against democracy, you have misunderstood this post. I am not necessarily against it. And yes, I do love Winston Churchill’s wit. I am merely pointing out that democracy can coexist or conflict with freedom. Some of us have got used to seeing the two together, like orange juice and vodka in a screwdriver, and have made an inappropriate association.

But democracy is irrelevant to our topic. The origin of freedom is to be found elsewhere. And we will look for it.

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Eleanor Roosevelt’s Liberalism

A major character in one chapter of my book, as hinted in the synopsis, will be Eleanor Roosevelt, who knew a thing or two about Triumph and Disaster being Impostors. So a few biographies about her are in my bibliography. The best is this one.

She is such a fascinating and engaging personality, that I’ve got loads overmatter of stuff that has nothing to do with the part of her story that I’m telling in my book. Take, for instance, this quote (from page 20) about the word Liberalism, which rhymes verbatim with my post on the matter:

But for the future to be “more rewarding,” she concluded, the United States needed to resurrect with conviction and daring the good American word “liberal,” “which derives from the word free… “We must cherish and honor the word free or it will cease to apply to us.”

Or this comment on intellectual rigor, honesty and diligence (on page 5):

“Argue the other side with a friend until you have found the answer to every point which might be brought up against you.”

Always better to do so with a friend first, because your enemies will oblige very quickly. This also dovetails with Amy Tan’s advice to writers about seeking criticism, but from friends or sources they trust to be honest.

Highly recommended book.