Why Don’t We Have an Ideal System?
Political Economy

Why Don’t We Have an Ideal System?

Any political or economic theory with normative force must grapple with the question: if it’s so good, why don’t we have it? The real world is beset on all sides with pure ideologies, but satisfies none of them. We have ad hoc mixed economies, arbitrary regulations, rent seeking, and a host of other features which only the most disciplined descriptivist could call ideal.

Answer to that question can be divided into two types: accident and fate. The libertarian can fall into either of these, so I will discuss each in turn.


By fate I don’t necessarily mean anything metaphysical. Even if there is, at the very root of things, nothing which was not strictly “determined” by prior states of the universe, this avails nothing for the human mind, which – as a part of that universe – has a hard time predicting the future. Fate answers describe some complex social system whose processes are highly ordered enough that its direction may be foreseen more or less accurately by the human mind.

The most famous of these is Marx’s dialectic of history, in which history inevitably progresses from feudalism to capitalism to socialism to communism through endogenous processes in each system. These respective systems have features which, when all historical accidents are abstracted away, inexorably birth the next.

Obviously this is not the only possible fatal answer. In fact – though the specific processes are rarely elaborated upon – many liberals and libertarians accept some sort of historical dialectic moving from “less free” to “more free” over the course of history (those of a more conservative temperament might pessimistically hold to an opposite tendency). Depending on how far out one zooms, one can make a case that history has or has not borne this out. Certainly from feudal to modern times, there has been a dramatic and apparently permanent trend towards freedom. On the other hand, there have been significant bumps and reversals along the way – for example the close of trade and immigration leading up to the two world wars, from which we have still not recovered.

One can also make a superficially convincing theoretical case for a libertarian dialectic from the theory of spontaneous order or the invisible hand. Milton Friedman’s story in Capitalism and Freedom, of the unravelling of Hollywood’s blacklist, illustrates how this might work:

The Oscar-awarding ritual is Hollywood’s biggest pitch for dignity, but two years ago dignity suffered. When one Robert Rich was announced as top writer for the The Brave One, he never stepped forward. Robert Rich was a pseudonym, masking one of about 150 writers … blacklisted by the industry since 1947 as suspected Communists or fellow travelers. The case was particularly embarrassing because the Motion Picture Academy had barred any Communist or Fifth Amendment pleader from Oscar competition. Last week both the Communist rule and the mystery of Rich’s identity were suddenly rescripted.

Rich turned out to be Dalton (Johnny Got His Gun) Trumbo, one of the original “Hollywood Ten” writers who refused to testify at the 1947 hearings on Communism in the movie industry. Said producer Frank King, who had stoutly insisted that Robert Rich was “a young guy in Spain with a beard”: “We have an obligation to our stockholders to buy the best script we can. Trumbo brought us The Brave One and we bought it”.

. . .

The Hollywood blacklist was an unfree act that destroys freedom because it was a collusive arrangement that used coercive means to prevent voluntary exchanges.

What we see here is the powerful operation of market forces to defeat injustice – not only narrowly construed coercion, but broad cultural prejudices as well. It was also arguably a greater factor in the civil rights movement than any particular law. In barely 40 years we have moved from active disenfranchisement to a nearly total taboo on racism. The forces of self-interest dealt a fatal blow to institutional racism. And if one extends the concept of spontaneous order into the realm of competitive government, it’s a small step to the idea that governments will eventually compete each other into an ideal state. The Anarchism Without Adjectives movement has moved in this direction. Why don’t we have freedom? Don’t worry, the logic goes, we’ll get it; we’re just not there yet. We won’t have to argue political philosophy; institutional selection will show us the answer.


Most, however, are not so convinced of the inevitability of their system. For these (again, regardless of the fundamental determinism of the universe), it’s historical accident. The accidental answer to this question is intimately tied to La Boetie’s question of how the few manage to rule the many. Obviously ruling interests prevent the institution of an ideal system. Are the leaders oppressing or duping the masses which might otherwise achieve it (via some dialectic process), or do they merely reflect the misguided prejudices of the masses? Based on the answer to that question, we can divide these answers further into ethics and conspiracy.


The most pessimistic have the idea that the powers that be are powerful, cunning, clever enough to stay in power by guile or brute force. These are the ones who talk about slavery to the Fed, about the secret cabal on Jekyll Island, and of 9/11 being an inside job. Depending on the ideology, the devil role can be ascribed to the state, to big buisness, or for looser screws the Illuminati, the Jews, or lizard people. The status quo is omnipresent, organized, and secretive.

Of course this is a major violation of Hanlon’s Razor,”Never attribute to malice what can adequately be explained by ignorance”. And so we turn to…


Ultimately, for one unprepared to accept a dialectic or conspiratorial account of history, the only option is to predicate the establishment of an ideal system on the ethics and norms of its people. Otherwise the question of why it does not already exist becomes intractable.

This goes against the desire to build a robust system which works regardless of the type of people who compose it. A static system can perhaps be constructed according to that criterion. But when you ask how it is to perpetuate itself, any system which does not take a common ethic into account inevitably breaks down. As La Boetie pointed out, no ruler can rule without at least the tacit consent of the ruled.

Of course, there is not a strict dichotomy between fatalistic and ethical accounts of the departure of our current system from an ideal. To the greatest extent possible, systems need to rely upon self-interest in order to self-perpetuate. That’s the power of the market economy that brought down Hollywood coercion in the 50s. The forces of spontaneous order are real and powerful, but they are not irreducible. They are not impersonal dialectical forces of history as Marx imagined, but rather the result of individuals interacting. During the civil rights movement, market incentives rendered the old ethic of racism obsolete and irrelevant. At its heart, it was an ethical shift that brought blacks into enfranchisement. The foundation of an ideal system, as much as it relies on spontaneous order and largely automatic forces, must also rely upon an ethical base of those individuals. The dialectic is the macro view; the ethical perspective is the micro view.

This is the sort of foundation which Hayek talks about in The Fatal Conceit, and is somewhat tangential to McCloskey’s idea of the Bourgeoise Virtues that sparked the industrial revolution. For an extended order to form and thrive, it requires a certain ethical and normative baseline which prevents the natural human tendency towards parochialism and allows impersonal trust. The more I feel I can trust a stranger not to screw me, the more complex social arrangements can be formed, and the better off everyone becomes as a result. This trust is essential for the development of commerce and trade. For Hayek, history is the story of the struggle, first for the emergence, and then for the continuance, of this ethic – of the suppression of the tribal instinct – so that the extended order could flourish.

In the spontaneous order dialectical examples, the institutional forces shape the ethics of the masses. Hayek’s thesis in The Fatal Conceit is that certain beneficial ethical norms will be selected for from this process. On the other hand, the emergence of that order requires a prior ethical and normative foundation. Experience has shown that though this foundation does feed back on itself through ordering processes, it is nevertheless fragile, all too easily eroded and swept away by more primal tribal instincts. Whether the unsatisfactory constitution of modern political economy is conceived as a sort of equilibrium among competing ideas, or as a result of the intellectual inertia of the masses, the fact remains that no major and lasting shift has ever occurred without a shift in the ethics and norms of the masses. That shift may come from above or below – though the results of top-down shifts may be unpredictable – but no reformer can afford to take it for granted.

Leave a Reply

More Content

About »

Hi, I'm C. Harwick, an economics PhD student in Virginia with an interest in Reformed theology, web development, and folk music.

Care to know more? Read on »

Twitter »

Jul2120:42RT @veroderugy: Cronies of the world unite behind Senator Elizabeth Warren, the defender of large corporations and big banks! http://t.co/O…
Jul2120:37Think of having a political opinion like saying "here's how I think society ought to be run." Would you sound dumb saying it that way?

Design By Thrica Powered By Wordpress Hosted By Nearlyfreespeech No Copyrights
Veritas Pulchritudo Est