Is a fixed mindset more realistic than a growth mindset?

Before I got far into Carol Dweck’s book, Mindset, I was confronted by the thought that the author might classify me as having a fixed mindset rather than a growth mindset. Dr Dweck is an eminent psychologist who has conducted a great deal of research on mindsets. She suggests that if you believe that your intelligence “is something very basic about you that you can’t change very much” you have a fixed mindset, but if you believe that you “can always change how intelligent you are” you have a growth mindset.

In considering those propositions (along with a couple of other similar ones) my mind turned initially to research showing that for most people IQ tends to remain fairly stable throughout life. That must mean that existing IQ is a good predictor of future IQ. If you choose an individual at random it would be safe to bet that their IQ is not likely to change much. 

However, after a few moments I realized that I was adopting what I call a spectator mindset. I was considering the relevant literature like a spectator who is not personally involved. I had overlooked the fact that the author was asking whether I agreed with certain beliefs about the potential for my intelligence to change.

When I began to think from a personal perspective, books by Norman Doidge on brain plasticity came to mind. From a personal viewpoint, I think it makes sense to view your intellectual capacity in much the same light as your physical fitness. Your brain is like a muscle – use it to make it strong. Or, at my age, if you don’t use it you lose it!

As I read further into the book I discovered that, like many other people, I alternate between fixed and growth mindsets.

I was induced to read Mindset, by an article by Nela Canovic on the Quora site where people were discussing the most important thing they have learned in life. The article got me wondering how closely Carol Dweck’s distinction between fixed and growth mindsets corresponds to the distinction between spectator and player mindsets that enabled me to greatly improve one aspect of my life about 14 years ago. It makes sense for a spectator to focus on what she or he expects to happen, but to be successful at anything you need a player mindset – to focus on your intentions. That is one of the most important things I had learned from life. (I have recently written about it on this blog.)

My concern in this post is with the realism of different mindsets because I don’t think it serves us well to maintain delusions about ourselves.  As I see it, human flourishing depends, to a large extent, on realism – seeking understanding about important aspects of your own life and human life in general, and being disposed to act on that understanding when circumstances permit. As previously discussed on this blog, that view has been reinforced by my reading of Wellbeing: Happiness in a Worthwhile Life, by Neera Badhwar, a philosopher.

As I see it, fixed and growth mindsets must both be closely related to the meanings that people give to their experiences, and how those meanings or interpretations shape their intentions and future behaviour. Is a growth mindset more realistic than a fixed mindset?

Carol Dweck suggests that the fixed mindset – the belief that your qualities are carved in stone – “creates an urgency to prove yourself over and over”. She adds:

“If you have only a certain amount of intelligence, a certain personality, and a certain moral character – well, then you’d better prove that you have a healthy dose of them. It simply wouldn’t do to look or feel deficient in these most basic characteristics”.

The book emphasises is that this mindset gives people one consuming goal – proving themselves: “Every situation calls for a confirmation of their intelligence, personality, or character”. In this mindset people tend to avoid coming to terms with reality if reality doesn’t validate their views of their own qualities.

What about the people who have a fixed mindset which involves labelling themselves as stupid, erratic, neurotic, lacking in willpower, or manifesting some other quality associated with poor performance? The author doesn’t give much attention to the potential for people to develop fixed mindsets which involve labelling themselves as poor performers. That could be because she sees fixed mindsets as stemming largely from attempts by parents and teachers to boost the self-esteem of children by telling them how clever they are, and so forth.

In her discussion of willpower, the author’s main emphasis is on the potential for people who believe they have strong willpower to fall into the trap of firmly resolving to do something, then failing to act according to their intentions because they make no special efforts to do so. She doesn’t mention that people who have come to label themselves as lacking in willpower might give up making resolutions to do things that could improve their lives. Perhaps that point is too obvious.

When I went looking in the book for recognition of the potential for people with fixed mindsets to label themselves as poor performers, I did find some. For example, there is recognition of this in the author’s discussion of the higher incidence of depression among students with fixed mindsets, and in her discussion of the learning potential of inner-city children who have been labelled as retarded or emotionally disturbed. The author also writes:

“People tell me they start to catch themselves when they are in the throes of the fixed mindset – passing up the chance for learning, feeling labelled by a failure, or getting discouraged when something requires a lot of effort. And then they switch themselves into the growth mindset …”.

Carol Dweck explains:

“The growth mindset is based on the belief that your basic qualities are things you can cultivate through your efforts. Although people may differ in every which way – in their initial talents and aptitudes, interests, or temperaments – everyone can change and grow through application and experience”.

 

The author refrains from making unrealistic claims about what can be achieved with a growth mindset. She suggests that people with a growth mindset don’t believe that with proper motivation and education anyone can become an Einstein or a Beethoven. They believe that “a person’s true potential is unknown (and unknowable); that it is impossible to foresee what can be accomplished with years of passion, toil, and training”.  As discussed in an earlier post, practice in being alert to opportunities could also be expected to expand growth potential.

In the growth mindset people accept both failure and success as providing learning opportunities. The most important questions: What can I learn from that experience? How can I use it as a basis for growth?

Mindset contains important messages about ways in which parents, teachers and coaches can encourage children to adopt a growth mindset. Carol Dweck considers the message of praising effort rather than outcome to be too simplistic.  She now advises teachers and parents “to praise a child's process and strategies, and tie those to the outcome”. In my view she is encouraging realistic appraisal of personal performance and potential for improvement.

My bottom line: Don’t fool yourself that you are being realistic if you adopt a fixed mindset about your intelligence, personality or moral character. Everyone is a work in progress. We make progress by learning from experience.


Postscript:
My attention has been drawn to a study by Yue Li and Timothy Bates that has failed to replicate Carol Dweck's findings regarding praise of intelligence of children and children's beliefs in the malleability of their basic ability. Please see comments below for further information.

Does Henry George have the answer to funding basic income?

The idea of a government-funded basic income or social dividend has been around for at least a couple of centuries. It has been supported by some prominent advocates of individual liberty as well as by collectivists. For example, it was proposed as an alternative to existing welfare systems by Milton Friedman in the 1960s (as a negative income tax) and by Charles Murray (as an unconditional basic income for all adults) in In Our Hands, published in 2006. More recently Elon Musk among others, has suggested a government-provided unconditional and universal basic income (UBI) as a solution to the hypothetical problem of ensuring that people have adequate incomes when their jobs are displaced by automation.

That problem is hypothetical because it seems reasonable to expect - at a national level and over the longer term - that jobs displaced by automation will be replaced by more highly paid jobs. That is what happened with jobs displaced by mechanisation during the 19^th and 20^th centuries. No persuasive evidence has emerged to support the view that the effects of automation will differ in that respect. Nevertheless, UBIs might appear to be an attractive social/political insurance policy, just in case automation does result in widespread loss of income-earning opportunities.

The idea that one day most of the population will depend on UBIs as their main source of income strikes me as inherently unappealing. Historically, individual human flourishing has been closely related to the self-respect that comes from earning a living, which is absent when people are able to live on “sit-down money” – an appropirate term used by some Australian aborigines to describe welfare benefits.  Robert Colvile has provided references to research relating to disincentive impacts of UBIs in a recent FEE article.

I want to focus here on a question of practicability: Is there some easy way for a government raise sufficient additional revenue to fund a UBI to reinforce expectations that the benefits of future economic growth will be widely shared? How could substantial additional revenue be raised without stifling the economic growth process? As I contemplated those questions the thought crossed my mind that if I was back working in the Australian public service (heaven forbid!) and was asked to recommend a way to raise more tax revenue, I might suggest more reliance on taxes on the unimproved value of land, as proposed in Australia's Henry report, and as suggested much earlier by Henry George in Progress and Poverty (first published in 1879). Land taxes get a fair amount of support among economists, including some who write for The Economist.

At some point it occurred to me that I should actually read Progress and Poverty – or at least, the 2006 version, edited and abridged by Bob Drake – rather than rely on second hand reports. As I read about Henry George’s theory of wages and interest it became clearer to me why he was viewed as a crack-pot by some of the people who taught me economics. For example, by rearranging the identity, Production = Rent + Wages + Interest, he concludes: “wages and interest do not depend on what labour and capital produce – they depend on what is left after rent is taken out”. Of course, if you rearrange the terms another way, rent would appear as the residual after payment of wages and interest. Modern economists should not be overly critical, however, because George wrote Progress and Poverty before John Bates Clark had made his contribution to the marginal productivity theory of distribution - and Clark apparently attributed his conception of the marginal productivity of labour to George’s theory of rent.

Henry George provides an interesting discussion of the way site rent rises with economic development. He asks readers to imagine a vast unbounded savanna. Every acre seems as good as any other for the first family to arrive, so they make a home somewhere, anywhere. When other families arrive, one location is clearly better than the others, that is close to the family that has already settled. Having a neighbour provides opportunities for the families to help each other. As more people arrive, a village is established to enable people to obtain advantages from local specialization and trade. As the village grows into a town and then into a city, the productivity of the original land increases. As a consequence: “Rent – which measures the difference between this increased productivity and that of the least productive land in use – has increased accordingly”. The original owners of the land become rich “not from anything they have done, but from the increase in population”.

George recognised that advances in technology, improvements in manners and morals and government policy reforms (e.g. free trade) also increase the productivity of land, and increase rents.

Following David Ricardo and John Stuart Mill, George argued that a tax on rent would fall wholly on land owners. He went further, however, in suggesting that all rent could be taxed away for the benefit of society without ill-effect. He suggested that returns to labour would thereby be enhanced:

“When all rent is taken by taxation for the needs of the community, equality will be attained. No citizen will have an advantage over any other, except through personal industry, skill, and intelligence. People will gain what they fairly earn. Only then, and not until then, will labor get its full reward, and capital its natural return”.

Henry George was correct to argue that, from an economic efficiency perspective, rent taxes are superior to most other taxes because they have a smaller impact on productive effort and investment. However, it is hard to see how a large increase in land taxes could be viewed as providing an equitable sharing of tax burden. Consider two people who have equal wealth, the wealth of A is in entirely in land and the wealth of the B is entirely in shares in companies that do not own land. Would you view it to be equitable for a government to introduce a tax that would take away a large slice of the wealth of A, while leaving the wealth of B unaffected?

Perhaps that inequity could be overcome by announcing that the new land tax will only apply to future increases in land values. However, the deadweight costs of a tax on future increases in land values would not be negligible. For example, consider a firm that is planning to build a very fast train and considering whether a stopping point along the route should be at City X or City Y. The firm is buying land along the route because it needs to capture some of the expected appreciation in land values to make its investment worthwhile. The firm’s investment appraisal suggests that City X would be the best location. However, it subsequently learns that City X is contemplating a substantial tax on future increases in land values, while City Y has no such plans. That information obviously has potential to tip the balance in favour of City Y, resulting in a less efficient allocation of investment.

The potential deadweight costs of land taxes have been explored in more depth by others, including Bryan Caplan and Zachary Gochenour.

My bottom line: Land taxes are better than many existing taxes (much better than taxes on land transfers) but they don’t offer a costless way to fund the substantial additional revenue that would be required to fund an unconditional basic income sufficient to meet reasonable expectations of a widely-shared dividend from future economic growth. If land taxes can’t do it, I doubt whether any tax-transfer proposal can achieve that objective. One way or another, even when robots do most of the work currently done by humans, humans will still need to earn the bulk of the incomes they live on - including by inventing and improving robots, servicing and managing them, and owning them.

Does your constitution mandate free trade?

The Constitution of Australia, like that of the United States, mandates free trade – up to a point! Both constitutions mandate free trade between the states, and leave federal governments free to impose barriers to international trade to the extent that they wish.

It is debatable whether a constitutional requirement for free international trade would have made a huge difference to trade policy in either country. The requirements for free trade between the states have not guaranteed free trade between the states - judges have not always ruled against trade barriers imposed by states to protect local interests. Many judges seem to capable of being highly imaginative in their interpretation of concepts such as free trade.  

The relevant constitutional question is whether free trade is mandated by the real constitution - the set of dispositions that influence what most citizens will accept as legitimate actions by politicians and bureaucrats who make up the government. That depends ultimately on the views of individual citizens.

Why should your constitution mandate free trade?  I hope you share with me the belief that individuals have a natural right to engage freely in mutually beneficial transactions with one another, even though third parties may be disadvantaged. If so, you would probably consider it to be objectionable for a government to levy a discriminatory tax on the sales of the producer from whom you wish to purchase, in order to encourage you to purchase from a rival producer. You may well assert that you have a right to choose to buy from whatever source you wish, for whatever reasons you might have, free from any such third-party interference.

The logic of this argument does not cease to apply merely because buyers and sellers may be separated by national borders. National borders are artificial constructs that do not alter the natural right of individuals and firms to engage in mutually beneficial transactions. Donald Boudreaux has written persuasively on this topic: “International Trade Is Simply One Manifestation of Competition”.

Should an exception be made in situations where foreign governments subsidize their exports? No, if foreigners are sufficiently misguided to subsidize their exports there is no reason why domestic consumers should not benefit from any price reduction that this causes. In a market economy, if foreign subsidies result in an expansion of total imports, this can reasonably be expected to result in exchange rate and relative price adjustments to make exporting more profitable and bring about an expansion of exports. Production for the domestic market that is displaced by increased imports will be offset by increased export production.

Some economists still, no doubt, maintain that unilateral free trade is not optimal on grounds such as the optimal tariff argument, and the potential for the use of existing trade barriers as bargaining chips to obtain better access to foreign markets. Policy advisors who recommend departure from free trade to obtain such gains risk opening the way for much larger economic losses because they are dealing with fallible real-world governments, rather than the omniscient and benevolent governments assumed to exist in their economic models. In the real world of politics every departure from a simple rule opens up opportunities for interest groups to advance their interests at the expense of the broader community. 

However, there is one argument that makes it difficult for the real constitution to mandate free trade. With great reluctance, I am now willing to concede that it may be becoming more difficult for politicians to endorse free trade because many people are choosing to cast their votes for candidates who oppose it. Even though the gains from free trade vastly outweigh the losses, the uneven distribution of losses makes the outcomes of free trade seem unfair to many people. A substantial proportion of voters in many countries now seem to be saying that their disposition is to favour protection of existing jobs rather than the opportunities that free trade offers.

Over the longer term, the pursuit of policies to preserve existing jobs will, of course, be inimical to the specialization and technological progress which provide the basis for everyone’s future prosperity. Nevertheless, many voters and their representatives seem to be more concerned to preserve existing jobs than to promote future prosperity. Our democratic systems seem to be mutating from systems of social cooperation to promote the interests of everyone, to arenas for the “war of each against all” that Thomas Hobbes imagined as the only alternative to an all-powerful dictator “to keep them all in awe”. Are we powerless to prevent this war of each against all?

This poses the kind of constitutional dilemma discussed by one of the 20^th Century’s best economists, James M Buchanan, in The Limits of Liberty: Between Anarchy and Leviathan, 1975. Buchanan wrote:

“If there exist potential structural changes in legal order which might command acceptance by all members of the society, the status quo represents a social dilemma in the strict game-theoretic terminology. Even if we consider ourselves far removed from the genuine Hobbesian jungle, where life is brutish and short, the status quo contains within it elements or features that are in principle equivalent. Life in the here and now may be more brutish than need be, and certainly more nasty. If after examination and analysis, no such potential for change exists, the legal-constitutional order that we observe must be judged to be Pareto optimal, despite the possible presence of discontent among specific members in the body politic”.

Buchanan was particularly concerned about ways to reform the rules of the political game to promote fiscal responsibility. That problem has worsened since the 1970s. The type of reforms he hinted at involved agreement by those who sense that they are vulnerable to having wealth expropriated via the political process to a mechanism for limited wealth transfer on condition that others agree to rules that overtly limit governmentally directed fiscal transfers.

I doubt whether rules to promote fiscal responsibility are feasible in the absence of a broad consensus concerning the role of government in distribution of the benefits from economic progress. Perhaps that is also a context in which the real constitution can mandate free trade. Current proposals being advanced in various quarters for guaranteed minimum incomes are relevant to this discussion. It seems to me, however, that proposals to ensure widespread opportunities for those displaced by import competition and technological change to improve their skills, and earn higher incomes, are probably more deserving of support. I might try to spell out reasons for that view in a later post. 

What is the most important thing you have learned in your life?

As I begin to answer this question I am wondering whether it was such a good idea after all. I still have many things to learn and, hopefully, I have a few more years left to learn them. I can claim to have been only moderately successful, so the wisdom I can offer may not be worth a great deal. Readers can make up their own minds about that. Some might think I am on an ego trip, but I am better placed than anyone else to make judgements about my own motives.

The most important thing I have learned in life so far is that when you are thinking about your future performance - in any aspect of your life – you are more likely to achieve to your potential if you think like a player rather than a spectator. That means paying attention to your intentions rather than your expectations. This chart might help me explain.

 If you ask spectators how well they think any player will perform in some forthcoming event they are likely to start talking about her or his past performance and trends in past performance. From the spectators’ viewpoint past performance is the best predictor of future performance. It can even make sense for spectators to attach labels to players based on past performance. One player might be showing great promise, while another is past his prime, or prone to choke, and so forth.

It is counterproductive for a player to go into a game with the mind-set of a spectator - focusing on expectations about the outcome based on past performance. If recent performance has been weak, dwelling on expectations based on past performance will tend to make them become self-fulfilling prophesies.  If recent performance has been strong, over-confidence is likely to get in the way of the focus required for further improvement. It is also distracting for players to be speculating about the judgements that spectators – including coaches and selectors – might be making as they observe the game.

To play well it is obviously necessary for players to focus on their intentions – what they need to do to realize the potential they have displayed in their best past performances. That doesn’t mean trying to exclude the possibility of poor performance from your mind.  It is inevitable for speculations about outcomes to arise in the minds of players. An appropriate response is to acknowledge that you are prepared to accept any outcome, but your focus is on what you intend to do and what that will feel like as you do it. Why not include the intention to enjoy using your skills?

It is obvious that the distinctions between player and spectator mind-sets is important in playing sports, but how widely does this apply to other aspects of life? It seems to me to be important in many aspects of life. An example that came to my attention recently helps to make the point. Here is an extract from an article by Jeff Wise, entitled “To Change YourLife, Learn How to Trust Your Future Self”, published in Science of Us:

“In the mid-1970s, psychologist Stephen Maisto conducted an experiment that would be forbidden today. He gave recovering alcoholics either a spiked punch or a similar-tasting virgin one. He then told half of each group that they’d just consumed alcohol, and the other half that they had not. As you might expect, half the test subjects experienced a sudden surge in craving. But it wasn’t strictly the ones who’d consumed alcohol. Whether they actually had or not, it was the ones who believed they had. The alcoholics who thought they’d had a drink believed that once they fell off the wagon they’d be hopeless, and therefore couldn’t bundle. So they couldn’t.”

In this context “bundle” means to identify with your future self (or your potential). As I see it, the subjects who had a sudden surge of craving, despite having not had any alcohol, had adopted the stance of spectators rather than players. Spectators have sound reasons to expect that when recovering alcoholics fall off the wagon they are likely to become hopeless. The results of the experiment suggest that there is no physical reason why an alcoholic who has had a drink cannot choose to focus on his or her intention to behave more like the person he or she wishes to become.

I learned about the importance of distinguishing between player and spectator mind-sets about 14 years ago when trying to help myself to become more fluent when speaking in public. As a child I developed a severe stutter and was unable to say more than a few words without blocking. My fluency improved greatly in my teen years, but I still had a tendency to block when it seemed most important to speak fluently e.g. in public speaking situations.

Looking back now, it seems obvious that I was tripping myself up by adopting a spectator mind-set. I was overly concerned about how the audience would judge me if I blocked. On the basis of past performance there was a high probability that I would experience disfluency, so that was what happened.

I experienced fewer problems after I began to focus on how I intended to speak, and learned how to trust my ability to speak fluently. It is certainly desirable for public speakers to have regard to audience reaction, but they do this most effectively when they focus on their own intentions – whether they are attempting to entertain, inform, persuade or inspire the audience. Spectators still see still see plenty of room for improvement in my public speaking performance – but I get a great deal of satisfaction from knowing how far I have come!

I am not sure where I picked up the distinction between player and spectator mind-sets. The related distinction between acting according to intentions rather than expectations came from an article by John Harrison, a public speaking coach who was once a stutterer, entitled “How expectationscan sink your ship”. I can remember reading about perceptual positions in NLP and Neuro-Semantics literature, but the idea of the player/spectator distinction, as discussed above, might have come from Tim Gallwey’s inner game books. Gallwey’s equation: performance equals potential minus interferences, is certainly highly relevant. The interference Gallwey was writing about comes from the inner coach (Self One) who is constantly distracting the player by telling her or him to be careful not to make a mistake. I found sporting metaphors from Tim Gallwey’s books – particularly The Inner Game of Golf - a great source of inspiration. (The Inner Game of Golf might even help me to improve my performance on the golf course if I played more frequently.)

Perhaps the second most important thing I have learned in life so far is that if you are having difficulty in understanding or explaining a problem it often helps to think of a relevant sporting metaphor. 

What policies will be pursued by the author of "The Art of the Deal"?

After reading Trump:The Art of the Deal it seems to me that the best way to start thinking about how to answer this question is to ask yourself what Mr Trump could do to further promote his own reputation as a political leader. His policy choices are likely to be determined largely by the potential they offer for the further self-promotion required to enable him to win a second term in office.

Some may wonder why I see a book written about 30 years ago as providing guidance about Mr Trump’s current priorities. Although his co-author, Tony Schwartz, claims that he actually wrote the book, it is clear that Donald Trump strongly endorses the ideology of The Art of the Deal and sees his experience in negotiating business deals as highly relevant to the presidency. In announcing his candidature, he said: “We need a leader that wrote ‘The Art of the Deal’.”

The Art of the Deal conveys the impression that the prime motivating force in Mr Trump’s life is self-promotion. The book is itself a promotional exercise designed to enhance his reputation as a person with the capability of doing deals under difficult circumstances. Trump is the hero, using publicity as a weapon to defeat incompetent and evil opponents. He emphasizes the importance of giving the media a good story. He even views critical stories as providing valuable publicity. Most tellingly, he acknowledges:

“The final key to the way I promote is bravado. I play to people’s fantasies. People may not think big themselves, but they can still get excited by those who do. That is why a little hyperbole never hurts”.

If you think that makes Mr Trump sound more like a politician than a business leader, consider the way in which he emphasizes that it is important “to deliver the goods”:

“You can’t con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don’t deliver the goods, people will eventually catch on”.

The quoted passage is followed immediately by reference to two former presidents, Jimmy Carter and Ronald Reagan, as examples of leaders who were good at promotion, but not so good at delivering the goods. This guy obviously thinks like a political leader, but it remains to be seen whether he will be as good as Ronald Reagan at delivering policy outcomes that are worth having.

The new president will recognize that to have any chance at re-election he will have to deliver some of the “goods” expected by the people who voted him into office. There will no doubt be a flurry of activity to take specific actions he has proposed for his first 100 days. Over the next few years there will probably be some real policy change e.g. cuts in corporate tax cuts, increased infrastructure spending and more restrictive immigration policies. In the foreign policy arena, application of the Trump doctrine of doing deals with the big players might end up favouring closer relations with China, as well as Russia, despite recent anti-Chinese rhetoric. That might make life more difficult for China’s neighbours, but is probably preferable to the alternative of deepening tensions between the U.S. and China. In many other policy areas, including trade policy, we are likely to see major re-branding exercises, with little actual policy change. Every policy deal will have Trump’s name written all over it – just like his real estate developments!

When I decided to read The Art of the Deal one of my objectives was to see to what extent he sees deals as involving winners and losers rather than mutually beneficial outcomes. There is some of both.  A substantial component of the “art” endorsed by Trump is actually an entrepreneurial function that will be recognizable to fans of Austrian economics. The entrepreneur sees an opportunity to make a profit that others have not seen, and then proceeds to use his negotiation and management skills in pursuit of that profit. If the entrepreneur succeeds, many others also benefit, including original owners of sites and the air space above them, financiers, contractors, building workers, and the people who own or rent space in the building. Everyone involved can be a winner.

The added complication in the entrepreneurial art practiced by Donald Trump is the prevalence of  government regulation impacting on the property development that he has been involved in. As I was reading The Art of the Deal I began to realize that Donald Trump and Tony Schwartz were writing about the entrepreneurial function in rent-seeking environments – the highly regulated property development market in New York and gambling industry in Atlantic City. For the benefit of readers not familiar with the concept, the idea of a rent-seeking society was developed by Gordon Tullock and Anne Krueger to describe societies where government regulations play a large role in determining the distribution of incomes, and substantial resources are expended by individuals and groups – rent-seekers - lobbying to have the coercive powers of government used to their advantage at the expense of others. The U.S. is not one of the first countries that comes to mind when I think of rent-seeking societies, but rent-seeking is rife in the industries where Donald Trump learned the art of the deal.

I am not the first to recognize that The Art of the Deal is about entrepreneurship in rent-seeking environments:  Adam Davidson made similar observations in an article in the New York Times Magazine in March 2016. However, I don’t think Davidson’s view of Donald Trump was entirely accurate. He suggested that Donald Trump “is not just a rent-seeker himself; his whole worldview is based on a rent-seeking vision of the economy, in which there’s a fixed amount of wealth that can only be redistributed, never grow”. The Art of the Deal portrays Trump’s real estate development activities as being about adding value to sites rather than just obtaining benefit at the expense of others. Even allowing for his hyperbole, Trump seems to see his role as that of a capitalist hero, like a character out of an Ayn Rand novel, who is using his skills in self-promotion and his legal team to fight the rent-seekers who are trying to obstruct economic development.

When he talks about public policy issues Mr Trump sometimes seems to allow his desire to present himself as a person with a kind heart to get in the way of clear thinking:

“Unlike most developers, I don’t advocate eliminating rent control. I just think there ought to be a means test for anyone living in a rent-controlled apartment”.

I wonder whether Trump really sees rent-control as a good way to provide economic assistance to poor people. A cynic might suggest that his support for means tested rent control was a rent-seeking ploy to further his own interests in evicting wealthy tenants from the rent-controlled premises that he wanted to re-develop.

Adam Davidson might be close to the mark in suggesting that at an international level Donald Trump’s world view is governed by the idea that what one country gains another loses. Some passages in The Art of the Deal reflect that view. Trump claims that the Japanese “have become wealthier in large measure by screwing the United States with a self-serving trade policy that our political leaders have never been able to fully understand or counteract”. These days he expresses similar views about China.

 From an economic perspective, Donald Trump’s desire to put America’s interests first in trade policy would be desirable for Americans (as well as people elsewhere in the world) if only he knew where America’s interests lie. It is hard to believe that this builder of innovative modern buildings in New York thinks he can make America greater by transforming its manufacturing industry into a museum of mid 20^th century technology that can only survive sheltered behind high import barriers. If he sees America’s interests as providing widespread opportunities for Americans to enjoy greater prosperity, he should hire some competent economists to suggest what policies are most likely to contribute to that objective.

If Donald Trump believes his own rhetoric about asking lots of questions, keeping options open and thinking big, perhaps he could even end up as an advocate of unilateral free trade, rather than re-branded bilateral trade deals. In my view the odds are strongly against that, but it could happen! 

Postscript:

A couple of months later, I think I was excessively optimistic in suggesting that we are likely to see major re-branding exercises in trade policy with little actual policy change. There are two reasons for this. First, Trump’s most influential advisers strongly favour protectionism and will not be satisfied with the kind of re-branding that might satisfy the President. Second, as Barry Eichengreen has pointed out, Trump is likely to focus on trade policy because it is “the one set of economic policies a President can pursue without close congressional cooperation”.

It now looks as though the world might be about to enter a new era of trade protectionism. Some suggestions regarding appropriate Australian policy responses are in a later post.

Is our "real" constitution pro-liberty?

My main reason for reading Politics of Liberty in England and Revolutionary America, by Lee Ward, was to understand how the English Whigs could oppose the American colonists’ quest for independence. Ward explains why they did not have any problem reconciling their opposition to American independence with their philosophical views. 

Constitutional ideas that were held in high esteem by Thomas Jefferson and many other American politicians - particularly the views of John Locke - were on the radical fringes of political discourse in England. The English Whigs (and Tories) were more strongly influenced by the constitutional ideas of Samuel Pufendorf (1632-1694) a German jurist and political philosopher who argued that whatever form of government a people constituted must be guided by a supreme power that is subject to no limitations or external force. The British Parliament was seen by parliamentarians like William Blackstone, and even Edmund Burke, as having supreme power over the colonies.

Whilst reading about the differing constitutional ideas being put forward by influential writers in England and colonial America my mind often turned to the concept of a real constitution put forward by Sheldon Richman in America’s Counter-Revolution: TheConstitution Revisited (discussed previously on this blog). Richman defines the real constitution as the set of dispositions that influence what most people will accept as legitimate actions by the politicians and bureaucrats who make up the government. He derives support for this concept from Roderick Long’s observation that “government is not some sort of automatic robot standing outside the social order it serves; its existence depends on ongoing cooperation, both from the members of the government and from the populace it governs” (NPPE, Vol 2, No 1).

All the advocates of different constitutional ideas in England and America in the 17^th and 18^th centuries were seeking to influence their readers’ dispositions concerning what they would accept as legitimate actions by governments. Robert Filmer used his interpretation of scripture as a basis to argue that even tyrannical kings had a divine right to rule.  Thomas Hobbes argued that while individuals had a right to self-defence, life would be “solitary, poor, nasty, brutish and short” if they were unwilling to authorise a strong government to maintain order. John Locke’s view of the state of nature - life without government - was not much more benign: in his view the absence of government to act as an umpire to settle disputes would result in a state of war, or something dangerously close to it. Locke argued, however, that government power derives from the individuals who compose society; it is held by governors as a form of trust; and if governors break this trust - fail to preserve the property (lives, liberties and estates) of individuals - then power devolves back from whence it came.

Moderate Whigs successfully advocated a Pufendorfian interpretation of the Glorious Revolution which deposed James II in 1688. Rather than asserting that the people had a natural right to appoint and depose their governors, the House of Commons accused James of having “endeavoured to subvert the constitution of the kingdom, by breaking the Original Contract between king and people”. However, the House didn’t even present those actions as grounds for rightful deposition – it relied on the legal fiction that James had abdicated. All mention of an original contract was expunged from the final version of the Declaration of Rights presented to William and Mary.

As already noted, the constitutional ideas advocated by Thomas Jefferson owed a great deal to John Locke. Tom Paine went somewhat further by asserting that modern society rather than the classical polis provides the psychic plane on which moral virtue flourishes:

“Society is produced by our wants, and government by our wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices”.

Unfortunately, Paine’s argument for government to be viewed as “a necessary evil” was not matched by recognition of the potential for legislative tyranny. Paine believed that legislatures would protect individual liberty because they would reflect the “popular will”.

   

Our experience with representative government over the last couple of centuries should have made everyone sceptical of claims that democratic constitutions allow the people to rule. The only way the people can rule is if the real constitution is pro-liberty – and that can only happen if enough individuals accept responsibility for governing their own lives. In my view Karl Popper was right to defend democracy on the grounds that it provides a way to get rid of bad governments without bloodshed. Democracy does not necessarily help us to choose good government. 

Did the framers of the U.S. Constitution intend it to protect liberty?

A week ago my answer would have been along the lines that while I could not claim any expertise in American history I had the impression that the natural right to liberty had been recognised in both the US Declaration of Independence and the US Constitution. In support of that view I would have pointed to the division of powers between the executive, congress and judiciary; the specific guarantees of freedom including freedom of speech; and the allocation of specific powers to the central government with remaining powers residing with the states. I would have argued that limiting the powers to the central government was a particularly important guarantee of freedom because states which imposed burdensome taxation and regulation were likely to lose out in the competition for people and investment. However, I would also have indicated that I was aware that the federal government had ended up with more power than the founding fathers had intended as a consequence of imaginative judicial interpretations of the Constitution.

For the benefits of an Australian audience I might have added that the framers of the US Constitution were obviously more concerned about liberty that the framers of the Australian Constitution. The two constitutions are similar, but the Australian Constitution - written a little over a century later - does not include explicit guarantees of liberty. As with the US Constitution, the Australian Constitution specifies limited powers for the central government, but some leading politicians who were heavily involved in federation were aware from the outset of the potential for its taxing powers to give the central government great leverage. Soon after federation, Alfred Deakin remarked that the Constitution had left the States “legally free but financially bound to the chariot wheels of the Central Government”.

My view of the libertarian credentials of the framers of the US Constitution has been challenged over the past week by my reading of Sheldon Richman’s book, America’sCounter-Revolution: The Constitution Revisited. Richman suggests that the framers of the US Constitution staged a counter-revolution:

“the Constitution, far from limiting government, was actually designed to bring about a new one that betrayed the ideals of the Declaration of Independence itself. … There is a reason it has done a poor job in protecting freedom: it was never intended to do so”.

The Constitution was ratified in 1788, twelve years after the Declaration of Independence. It replaced the Articles of Confederation, which had been ratified in 1781. Under the Articles the government of the United States had been essentially confined to external affairs. It had no power to tax, regulate trade, or raise an army.

Greater central government powers were apparently not required to improve the lives of citizens. Under the Articles of Confederation, America was relatively peaceful and prosperous. In Richman’s words, life “wasn’t so bad after all – at least for white males with property  … ; obviously it wasn’t so good for African Americans, Indians, and white women, but their fate did not change in 1789”.

Richman cites evidence that a negative impression of the confederation period was fostered by those who favoured nationalist centralisation. Mercantile interests apparently tended to favour nationalist centralisation because they hoped it would help them to hold onto political power at the expense of radical democrats – including overtaxed small farmers - who were gaining greater representation in some state legislatures. Interstate protectionism was more legend than fact.

The author suggests that from the outset the US Constitution could reasonably be seen as a stool with three legs: taxation; mercantilist trade-promotion; and national security in a hostile world. The Constitution gave Congress taxation powers that would be sufficient (in my view) for any modern warfare/welfare state: “Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States”. Promoting trade was seen in those days (and still today in many quarters) to be more about opening export markets than enabling mutually beneficial transactions between people in different countries; trade-promotion was about selective embargoes and building empires. The nationalists sought a permanent military establishment that would be powerful enough to protect the nation’s interests from the old colonial powers and the Indian nations, whose lands Americans coveted.

The bill of rights in the US Constitution was introduced as an afterthought to mollify anti-federalists who had made the absence of a bill of rights the top talking point against the draft constitution. The rights embodied were largely uncontroversial common law rights of Englishmen.

Richman seems to me to make a strong case that James Madison, sometimes referred to as the father of the US Constitution, was father of the “implied-powers doctrine”. Madison argued that it was impossible to confine the federal government to the exercise of powers “expressly delegated” unless the constitution “descended to recount every minutiae”. Richman comments:

“Madison was right, of course. … There must be implied powers. But that’s the danger of a constitution and a monopoly constitutional government. Implied powers must be inferred, and inference requires interpretation. Who is likely to have the inside track in that process: those who seek to restrict government power or those who seek to expand it? We know the answer to that question”.

This book does more than make the case that a counter-revolution set America on the wrong path over 200 years ago. The author asks an important question that could help put America back on the right path: “Where is the Constitution?” Richman is referring to “the real constitution – the set of dispositions that influence what most Americans will accept as legitimate actions by the politicians and bureaucrats who make up the government”.  The point he is making, with the aid of Roderick Long’s (easily found) contribution on “market anarchism as constitutionalism”, is that if government power is to be wound back the real constitution must be pro-liberty:

“That’s why there’s no substitute for education and an intellectual-moral revolution”.

Another piece of wisdom that Sheldon Richman provides to libertarians is to avoid letting the perfect be the enemy of the good:

“I see no reason for libertarians, in the name of purity, to withhold support for steps that make real progress toward liberty and pave the way for more”.

That is an approach that a I can readily support without having to be persuaded that market anarchy offers the best prospects for human flourishing. 

How did the culture of growth evolve?

There can be little doubt that a change in attitude toward nature and the ability to harness it to human needs, that occurred among an educated elite in Europe in the period 1500 to 1700, paved the way for the industrial enlightenment in Britain, and the subsequent economic growth that has since benefited much of the world’s population. Joel Mokyr’s recent book, A Culture of Growth: The origins of the modern economy, explains that change of attitude in terms of cultural evolution.

Since cultural evolution involves individuals in making choices that change their beliefs, values and preferences it might be expected to be a gradual process. However, Mokyr uses cultural evolution to explain the large, discontinuous change in attitudes that occurred in Europe by pointing to: factors causing resistance to such change throughout the world; factors specific to Europe leading to a weakening of such resistance; and specific change agents espousing the cultural change that occurred. At the risk of over-simplifying the author’s scholarly efforts I will attempt to outline his thesis below.

Early modern Europe was a deeply religious age. The great Thomist synthesis, in which Christianity was merged with Aristotelian physics and metaphysics became a deeply entrenched dogma. The prevailing culture discouraged potential innovators from openly challenging this dogma. Science had previously flourished during some periods other parts of the world. It flourished in the first centuries of Islam, but was subsequently held back by mystical religious dogmas. It flourished in China during the Tang and Song dynasties (618-907 and 960-1127), but stagnated during the Ming and Quing dynasties (1368-1644 and 1644-1911) when institutions such as the imperial service examination system served to discourage intellectual innovation.

Political fragmentation is the specific factor which led to a weakening of resistance to intellectual innovation. In the context of the ongoing cultural unity of Europe, political fragmentation made it possible for intellectuals whose ideas were suppressed in one jurisdiction to continue their work elsewhere. The ubiquity of the printing press made a mockery of prohibitions on books by rulers of particular states. The rulers of different states sought to enhance their prestige by competing with one another to attract citizens with academic or other skills. 

The third element of the evolutionary story is the work of cultural entrepreneurs, particularly Francis Bacon (1561-1629) and Isaac Newton (1643-1727). Joel Mokyr emphasises that Bacon’s contribution should be assessed in terms of his rhetorical contribution to cultural change rather than his specific contributions to science. Bacon challenged the traditional orthodoxy by emphasizing the potential for the “sacred duty” to improve the material conditions of life to be aided by knowledge gained from experimentation. He argued that knowledge ought to bear fruit in production.

Isaac Newton promoted the view that the universe is mechanistic and understandable and that the role of science is to establish empirical regularities. He also argued that this knowledge should be used for the material benefit of mankind.

The educated elite in Europe – members of the so-called Republic of Letters – looked upon Bacon and Newton as the most influential thinkers of their age. The Republic of Letters set up norms and incentives that supported the market place of ideas. Participants were expected to reply to letters, disclose findings and data truthfully and acknowledge intellectual debts. The main payoff for successful scientific efforts was enhanced reputation. Evidence and logic were needed to back up assertions in order to win acceptance for new ideas. Scepticism provided the basis for advances in codified knowledge.

In Britain, the Puritans were particularly impressed by Francis Bacon’s writings. They were deeply attracted to experimental research. The systematic study of God’s creation was seen to be the closest a Calvinist could get to understanding an inscrutable deity. The study of nature was seen to have potential to instruct interpreters of the scriptures. The Puritans saw a great deal of virtue in “good works”, which they associated with labour that was useful and profitable in a worldly sense. What we call leisure, the Puritans viewed as idleness. They regarded education in physics, science, mathematics and languages as deeply virtuous.

The Puritans showed little concern for improving institutions in ways that would benefit economic growth, but in their stress on empirics and the practical use of knowledge they constitute “an essential link between the early followers of Francis Bacon and the Industrial Enlightenment of the 18^th century” (which Joel Mokyr wrote about in The Enlightened Economy). During the later Enlightenment period, science was, of course, able to “shed religion and advance on its own steam”.

In this brief review I have focused on the bare bones of Joel Mokyr’s model of cultural evolution. Readers interested in a broader perspective, should read Deidre McCloskey’s review. McCloskey’s important trilogy of books in this field also emphasise the importance of rhetorical contributions in promoting a culture of growth, but seem to imply that literature’s role in changing attitudes toward business made a greater contribution than Bacon’s cultural entrepreneurship in the field of science.  I mention this just to acknowledge that history can be complicated.

I find it difficult to read a book like A Culture of Growth without wondering what the implications it might have for the future. My reading of the history of the industrial enlightenment (sometimes still referred to as the industrial revolution) has previously made me think about the links between cultural change and economic policy reform. One might think that if a cultural evolutionary framework can help us to think about the past it should also be able to help us to think about the future. However, such models can only provide a framework. As Joel Mokyr emphasises models of cultural evolution are contingent rather than deterministic:

“In other words, they force us to recognize that things could have turned out differently than they did with fairly minor changes in initial conditions or accidents along the way” (p 232).

Hopefully, the “accidents” that  the world is currently experiencing will not destroy the culture of growth.

How can we measure human flourishing?

This graph suggests that, at a national level, three quite different indicators of human flourishing tell a similar story about human flourishing. The opportunity measure, shown on the horizontal axis, encompasses economic freedom, income, education, health and environmental performance. The thriving measure, shown on the vertical axis, shows the percentage of the populations who are positive about their present life situation and optimistic about the next five years. The measure of psychological flourishing, shown by the size of the bubbles, reflects the percentage of the populations whose responses to questionnaires indicate competence, emotional stability, engagement, meaning, optimism, positive emotion, positive relationships, resilience, self-esteem, and vitality. 

The focus on European countries was dictated by the data source on psychological flourishing:  an article by Felicia Huppert and Timothy, ‘Flourishing Across Europe’ (published in Soc.Indic.Res. in 2013). The thriving data is from Gallup World Polls using the Cantril scale which asks people to evaluate their lives relative to the best possible and worst possible life. The opportunity measure was created using methodology described in Chapter 6 of my book, Free to Flourish.

The graph raises such questions as whether Scandinavian countries will be able to sustain high rates of thriving and psychological flourishing in future without further expanding individual opportunities.

However, I want to focus in this post on how we came to measure human flourishing in three different ways and what the different measures tell us.

First, consider measures of opportunity. GDP per head of population has been used by economists as a rough measure of well-being for many decades, even though its potential shortcomings for this purpose have been well known since the concept was developed in the 1930s. Recognition of such problems led to efforts to take account of longevity and education, in the UNDP’s Human Development Index, and of a wider range of indicators of the quality of life in the OECD’s Better Life Index and similar indexes - including the opportunity index used in the graph. All those indexes can be viewed as measures of opportunity; they are not direct measures of well-being or human flourishing. It is possible to be wealthy, highly educated and have good physical health and yet to be deeply unhappy.

Second, there are attempts to measure well-being directly using surveys asking individuals to give a simple numerical rating to their happiness or their satisfaction with their lives.  The data on thriving shown in the graph are based on subjective well-being assessments of that kind.

The meaning that should be given to life satisfaction ratings is less obvious than the meaning of happiness ratings. The happiness question clearly elicits responses about feelings. Available evidence suggests that life satisfaction ratings reflect evaluations of lives rather than momentary feelings. Research by John Helliwell et al for The World Happiness Report shows that a large part of variation in life satisfaction ratings among countries can be explained by differences in income levels, social support, freedom to make life choices, generosity and perceptions of corruption.

Analysis of data from long-running national panel surveys for Australia, Germany and Britain provides evidence that adaptation and resilience tend to restore life satisfaction to previous levels following positive and negative changes in circumstances. Nevertheless, recent research by Bruce Headey and Ruud Muffels suggests that most people go through periods of their lives when they have relatively high and relatively low life satisfaction. Positive feedback loops between life satisfaction and variables such as health, social support, frequency of social activities, and satisfaction with work and relationships partly account for extended periods of high or low life satisfaction.

As I have discussed in a previous post, evaluations of life satisfaction can also be interpreted as frames of mind, which influence the extent to which people experience positive emotions. Monty Python (and many philosophers and psychologists) tell us that people who have a disposition to look on the bright side of life are better able to maintain relatively high life satisfaction. The evidence that life satisfaction is influenced by dispositions that are attributable to genetics also supports a frame of mind interpretation. People in Denmark are apparently particularly favoured by genes that promote high life satisfaction.

The main reservation I have about the tendency to use of life satisfaction as the gold standard in measuring human flourishing stems from evidence (for example, findings of research by Daniel Benjamin, OriHeffetz, Miles Kimball and Nichole Szembrot)  that when faced with relevant choices people rank life satisfaction less highly than other criteria such as the overall well-being of their family, being a moral person, having a meaningful life, and having many options and possibilities in life and freedom to choose among them. Some of the findings of this research are not easy to understand, but those noted above are, at least, consistent with the choices people could be expected to make when they exercise their practical wisdom.

That leads me to the third approach to measurement of human flourishing: the eudaimonic approach, which draws some inspiration from ancient Greek philosophers.  In their research, referred to above, Felicia Huppert and Timothy So viewed flourishing as lying at the opposite end of a spectrum to depression and anxiety. The authors identified 10 features of positive well-being: competence, emotional stability, engagement, meaning, optimism, positive emotion, positive relationships, resilience, self-esteem, and vitality.  As noted in my previous discussionof this study, an important finding was that was that the individuals identified as flourishing did not correspond very closely to those identified as having high life satisfaction. For Europe as a whole, the percentage who were both flourishing and had high life satisfaction was 7.3%. Among people who met the criterion for flourishing, 46.0% had high life satisfaction, and among people who had high life satisfaction, 38.7% were flourishing. (The correlation between life satisfaction and flourishing was only 0.34.)

As the philosopher Daniel Haybron has observed recently, there is no consensus among eudaimonic psychologists about what their measures of well-being should look like. Dan Haybron has provided what seems to me to be a good account of the “philosophical basis of eudaimonic psychology” in a chapter of that name in J Vitterso (ed.) Handbook of Eudaimonic Well-being.  I don’t agree with him on the question of whether it is possible for the wicked to flourish, but I don’t think that impinges greatly on the measurement issues. Haybron argues cogently that the main factors that should be targeted in eudaimonic measures of psychological well-being are:

• Agency - personal development, competence and autonomy
• Relationships - close personal relationships, social enjoyments, community trust etc.
• Meaning - engaging in activities that are meaningful or worthwhile
• Emotional well-being - endorsement (or positive emotion) engagement and attunement (tranquillity or peace of mind).

He also acknowledges the importance of some other factors that researchers may wish to measure: authenticity, knowledge and virtue.

In my view Haybron’s contribution should provide a useful basis for further consideration of these matters by psychological researchers, but any consensus they reach will inevitably be somewhat arbitrary and tenuously related to the perceptions of individual survey respondents about the factors that are important to their own flourishing.

I end by raising a couple of questions:

First, how should researchers determine what weights should be given in combining ratings of factors targeted in their surveys? My answer, very briefly, is that this should be left to the practical wisdom of survey respondents. I considered the question here.

Second, would it be enlightening to attempt to combine measures of economic opportunity with measures of psychological flourishing? My initial thought is that before considering that question we should have a clear view of the purpose(s) for which such a combined measure might be more useful than separate indicators of economic opportunity and psychological flourishing. I can’t think of any right now.

Postscript: 

Dan  Haybron has provided the following comments:

Very nice post! It might be useful to see your opportunities index related to the capabilities framework, which in my view is really just a kind of opportunity approach--and possibly better framed as a matter of opportunities (though maybe the connotations of the latter aren't always helpful). 

I suspect policy should consider well-being/outcome and opportunity metrics, and also don't see any clear rationale for combining them, except perhaps in some still broader index including lots of other stuff as well. In my work on capabilities, I suggest that the latter better captures something like parents' concern that their kids have good opportunities (so push them in school), which is distinct from a wish that they be happy/do well, which can sometimes be in tension with giving them the best opportunities. (If your kid goes to Harvard, great opportunities, probably not so happy.) Though in line with your graph, I assume they generally tend to be positively correlated.

On life satisfaction (LS)  measures: you point to one of the odd features of the Benjamin et al work, which generally seems to undervalue emotional goods as well. I suspect the setup skews answers misleadingly on things like that (though I think their work is really cool). But also, partisans of LS should not be bothered by that result: the smart position is to allow that LS itself isn't very important (hence the responses), but is very useful as an indicator of success in the things people do care about. So if LS is a valid measure, it should reflect all those other things, in proportion to how much people care about them. i suspect the Benjamin et al framework might be used to help test LS measures: are they sensitive enough to what people actually care about? Or do they lean too heavily on information that is chronically salient, like day-to-day material concerns? 

Can your view of external factors affecting human flourishing be summed up in a collection of quotes?

Just as sunshine, water and nutrients are necessary for plants to flourish, so too are external factors necessary for human flourishing. Aristotle was criticized by some other ancient Greek philosophers for holding that view, but it is hard to see how it could be contentious if human flourishing is viewed as the exercise of practical wisdom to pursue goals that each individual values in the circumstances in which they find themselves. The extent that we flourish - the quality of our lives - is not entirely divorced from the outcomes of our efforts to obtain the goods we value.  

As in the preceding post, which focused on the internal (personal development) aspects of human flourishing, the quotes I have selected below have been chosen on the basis that they support what I hope is a coherent set of propositions about external factors affecting individual human flourishing.

1. Human nature is probably shaped by multi-level evolutionary processes.

“Natural selection works at multiple levels simultaneously, sometimes including groups of organisms. I can’t say for sure that human nature was shaped by group selection – there are scientists whose views I respect on both sides of the debate. But as a psychologist studying morality, I can say that multilevel selection would go a long way toward explaining why people are simultaneously so selfish and so groupish.”  Jonathan Haidt, The Righteous Mind, 2012, p 218.

2. There seems to be broad agreement about virtues among almost all religious and philosophic traditions.

“Led by Katherine Dahlsgaad, we read Aristotle and Plato, Aquinas and Augustine, … Buddha, La-Tze, … the Koran, Benjamin Franklin … some two hundred virtue catalogues in all. To our surprise, almost every single one of the these traditions flung across three thousand years and the entire face of the earth endorsed six virtues: … wisdom, courage, humanity, justice, temperance, and transcendence.” Martin Seligman, Authentic Happiness, 2002, p 132-3.

3. Our social interactions encourage us to judge our own conduct as impartial spectators.

“Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is fitter to take care of himself than any other person, it is fit and right that it should be so. … If he would act so as that the impartial spectator may enter into the principles of his conduct, which is what of all things he has the greatest desire to do, he must … humble the arrogance of his self-love, and bring it down to something that other men can go along with. … In the race for wealth, and honours, and preferments, he may run as hard as he can … in order to outstrip his competitors. But if he should jostle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play that they cannot admit of.” Adam Smith, The Theory of Moral Sentiments, 1759/1984, II.ii.2.1.

4. Freedom was made possible by the evolution of abstract rules of conduct which enabled mutually beneficial transactions among strangers.

“Man has not developed in freedom. The member of the little band to which he had to stick in order to survive was anything but free. Freedom is an artefact of civilization that released man from the trammels of the small group, the momentary moods of which even the leader had to obey. Freedom was made possible by the gradual evolution of the discipline of civilization which is at the same time the discipline of freedom. We owe our freedom to restraints of freedom. ‘For, Locke wrote, ‘who could be free when every other man’s humour might domineer over him?’ …

The great change which produced an order of society … for the preservation of which he had to submit to learnt rules which were often contrary to innate instincts, was the transition from the face-to-face society, or at least of groups consisting of known and recognizable members, to the open abstract society that was no longer held together by common ends but only by the same abstract rules.” Friedrich Hayek, Law, Legislation and Liberty, 1982, VIII, p 163-4.

5. The concept of natural law was important in opening the way to recognition of the right to liberty.

“The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions … (and) when his own preservation comes not in competition, ought he, as much as he can, to preserve the rest of mankind, and may not, unless it be to do justice on an offender, take away, or impair the life, or what tends to the preservation of the life, the liberty, health, limb, or goods of another.” John Locke, The Two Treatises of Civil Government, 1689, II, 6.

6. The “progress of society toward real wealth and greatness” is hindered by restrictions on natural liberty.

“All systems either of preference or of restraint … being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way, and to bring forth both his industry and capital into competition with those of any other man, or order of men.” Adam Smith, Wealth of Nations, 1776, IV.ix,50,51.

7.  The economic betterment that has vastly improved the lives of an increasing proportion of the world’s population over the last 300 years can be attributed to the ‘bourgeois deal’.

“Then after 1798 … life in quite a few places got better. Slowly, and then quickly, and by now with unstoppable, ramifying worldwide force, it got much better. Material life got better not merely for Europeans or imperial powers or Mr Moneybags, but for ordinary people from Brooklyn to Beijing.

The betterment stands in human history as Great Enrichment, the most important secular event since we first domesticated squash and chickens and wheat and horses. …

The real engine was the expanding ideology of liberty and dignity that inspired the proliferating schemes of betterment by and for the common people. Liberty and dignity for ordinary projectors yielded the Bourgeois Deal: ‘You accord to me, a bourgeois projector, the liberty and dignity to try out my schemes in voluntary trade, and let me keep the profits, if I get any, in the first act – though I accept, reluctantly, that others will compete with me in the second act. In exchange, in the third act of a new, positive sum drama, the bourgeois betterment provided by me (and by those pesky, low quality, price-spoiling competitors) will make you all rich.’ And it did.” Deirdre McCloskey, Bourgeois Equality, 2016, p 21.

 8.. Economic betterment has been associated with the emergence of emancipative values, and social movements to promote civic entitlements.

“Most people in … [technologically advanced] societies have a high living standard, are well educated, and can easily connect to like-minded others, irrespective of locality. In these situations, and in many societies approaching these conditions, people recognize the use of universal freedoms and value them accordingly: emancipative values emerge. Inspired by emancipative values, people take action on behalf of freedoms. This is evident in all kinds of social movement activity, the most vigorous of which voice emancipative goals: people-power movements, equal opportunity movements, civil rights movements, women’s rights movements, gay rights movements, children’s rights movements, and so forth. … This is a virtuous circle that describes thriving societies.” Christian Welzel, Freedom Rising, 2013, Loc 9324.

9. Classical liberalism is not an all-embracing ethic.

“As liberals, we take freedom of the individual, or perhaps the family, as our ultimate goal in judging social arrangements. Freedom as a value in this sense has to do with the interrelationships among people; it has no meaning whatsoever to a Robinson Crusoe on an isolated island (without his Man Friday). … Similarly, in a society freedom has nothing to say about what an individual does with his freedom; it is not an all-embracing ethic. Indeed, a major aim of the liberal is to leave the ethical problem for the individual to wrestle with.”  Milton Friedman, Capitalism and Freedom, 1962, p 12.

10. Individual rights answer the question of how it can be possible for the flourishing of individual humans to be self-directed without conflicting.

“Individual rights are an ethical concept different from those concepts generally found in normative ethics. They are not needed in order to know the nature of human flourishing or virtue, or our obligations to others, or even the requirements of justice. … Rather, individual rights are needed to solve a problem that is uniquely social, political and legal. … How do we allow for the possibility that individuals might flourish in different ways … without creating inherent moral conflict in … the structure that is provided by the political/legal order? How do we find a political/legal order that will in principle not require that the human flourishing of any person or group be given structural preference over others? How do we protect the possibility that each may flourish while at the same time provide principles that regulate the conduct of all?”  Douglas Rasmussen and Douglas Den Uyl, Norms of Liberty, 2005, p 78.

11. The liberal order can only succeed if sufficient people want to be free to make their own choices, and are prepared to enter into relationships with others on the basis of fair dealing, reciprocity and mutual respect.

“I have suggested that the liberal order that embodies political democracy and a market economy must be grounded in two normative presuppositions: first, that all persons are capable of making their own choices and that they prefer to be autonomous and, second, that most if not all, persons enter into relationships with others on a basis of fair dealing, reciprocity and mutual respect. I have also suggested that, from certain perspectives, observed reality in politics and economics may not seem to square with those presuppositions. My argument is that, nonetheless, and regardless of what may be observed, we must, within limits of course, proceed as if the presuppositions are satisfied. …

Properly designed institutional-constitutional safeguards against deviations from the norms can be effective … only in settings where the share of participants who might behave in violation of the norms of autonomy and reciprocity remain relatively small. Generalized or widespread failure of persons to adhere to these norms, along with widespread recognition that others also disregard the standards, will ensure that the liberal order itself must fail, quite independently from any institutional safeguards.” James Buchanan, Why I, Too Am Not a Conservative, 2005, pp 26, 28.