Managerialism and markets

Is my critique of managerialism consistent with my advocacy of free markets?  Robert Jubb at Consider Phlebas thinks not. He writes:

One of the prime targets of the managerialist critique [by for example Alasdair MacIntyre] is positive social science, and economics in particular, which, the critique alleges, reduces all actions to a lowest common denominator of bare preference, and seeks to organize social interactions to maximize efficiency.

But, he says, I myself

advocate using strongly positivist economic models as a more or less sole basis for public policy, which must be one of the ultimate managerial sins. For example...the reference [in this post] to the free market as the only possible basis for economic growth (and presumably, an unquestioned assumption that economic growth is a necessary good) seem to me to be classically managerial...The free market is one of the most rule-bound, in the sense of exception-less generalizations, institutions imaginable: inviolable property rights, the relations between them becoming inreasingly the only public mode of interaction, the invisible hand driving inexorably towards equilibrium and so on.

As you might imagine, I don't think I am being inconsistent here.

1. I'm not making any grand ambitious claims for free markets. I'm not saying that they maximize growth. All I'm saying is that the richest societies happen to have roughly free markets, and that centrally planned economies have been poor. If this is just a coincidence, it's a peculiar one.
2. The case for markets is emphatically not that they "drive inexorably towards equilibrium." That claim is too boldly positivist for me. The argument for a market economy is the Hayekian one, not the Arrovian one. It's that markets do a good - though emphatically not perfect  - job of using dispersed and fragmentary knowledge. The market is, as Lynne Kiesling says in this typically delightful post, a "discovery mechanism."  One of my biggest complaints about managerialist governments is that they fail to recognise this merit of markets.
3. The notion of inviolable property rights is not essential to the free market case. Armen Alchian, one of the main contributors to this approach has written:

The complexities and varieties of circumstances render impossible a bright-line definition of a person's set of property rights with respect to resources...Private property rights are not absolute.

I'd add that the present distribution of property is deeply unjust and illegitimate; the argument for free markets and the defence of existing property rights are entirely separate things.
4. Only a cretin would say that economic growth is an unquestioned good in western societies. It is, though, surely, a necessary good (on balance) for sub-Saharan Africa.
None of this, I think, is greatly at odds with MacIntyre's critique of positivist social science. Indeed, quite the opposite.
He argues in After Virtue (chapter 8)  that there are no law-like generalizations in the social sciences, because there are "four sources of systematic unpredictability in human affairs:"
1. "Radical conceptual innovation" - we can't predict what's going to be invented or discovered.
2. Free-will. I cannot predict today what decisions I'll take tomorrow. (This is true by definition - if I could do so, they'd not be tomorrow's decisions.)  And if I can't predict my decisions, other people can't .
3. "The game-theoretic character of social life." Game theoretic situations are "situations of imperfect knowledge."
4. "Pure contingency."
But surely, these sources of unpredictabilty are consistent with the Hayekian case for free markets. (Interestingly, but sadly, there's no reference to Hayek in After Virtue.) Markets, Hayekians say, can harness these better than can managerialist states.
Of course, this is a predictive and falsifiable claim. But it's only weakly so.
So, when Robert asks: "is the free market managerial?" My answer is: no, at least not very much so.

Comments

[dearieme]

"Interestingly, but sadly, there's no reference to Hayek in After Virtue": then it need not detain me, for it must have been written by a dolt.

[Rob]

I feel I should say that I meant only to point out what I thought, on the basis of what I knew about the critique, looked like it might be an inconsistency, and that I was genuinely interested in the answer to the question, so thanks for responding. I should also say, I think, that I am unconvinced about the (quasi-)moral case for free markets generally, although I suppose that's probably rather obvious from my blog.

I have some reservations about all but one of the points you raise here (quickly, on 1 - the south-eastern asian Tiger economies?; on 2 - need to show that a) nothing else could gather the information as well and b) the costs of gathering the information do not outweigh the benefits; on 3 - and this only makes sense if you endorse the managerial critique, which I'm not doing - doesn't each individual case need sharply defined property rights, even if, generally, no single set of sharply defined property rights is required; on the MacIntyre stuff - if the claim is that markets are the best available tools for the efficient distribution of resources, because of their responsiveness to new information, doesn't that fall foul of the restriction on social science generalizations?) but perhaps a post, rather than comments, particularly comments when drunk, is a better place to deal with it. Again, thanks for responding, and I really do mean this in a conversational, rather than disputational, way (and so I'm sorry if it comes across otherwise).

Also, I'm not actually - as I said above, but not, perhaps foolishly, in my post - endorsing the managerial critique (it sounds a bit too much like a social science generalization, apart from anything else), so I'm not actually claiming the things I said are true, just pointing out what I think the managerial critique says.

[Blimpish]

The morality of markets is hardly the issue until another system can be found that can feed the masses. Market processes are at any rate are a natural social phenomenon in a society under the rule of law.

Obviously, I'm fully on-board for bashing managerialists, so this will come as no surprise: but I too think Rob misses the point here. Managerialists build dogma out of those social science generalisations - which can just as much be in favour of state control as of markets. The current managerialist consensus favours a heavy role for public intervention in raising adult skills (see the White Paper released earlier this very day).

The point about managerialism is not that it is hyper-rationalisation, but blind rationalisation. It is (in keeping with the positivist tradition) a radical separation of facts and values, with values beyond reasoned debate - values are 'appropriate' or not, and there are no trade-offs to be had. There's a difference between using positivist analysis to seek the most efficient means of achieving a consciously selected end, and following an accepted reasoning for ends that are beyond discussion.

[dearieme]

"Appropriate": such a tell-tale of a word and such a question-begger.