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
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.