Interests, Ideas, and Entrepreneurship

I would like to thank the commentators for their thoughtful and provocative responses to my lead essay. We wanted to have a range of institutes and groups represented in order to get a broad array of perspectives on the question of the impact of ideas on social change, and we were not disappointed. I will do my best in what follows to address their concerns and comments.

The Chicken and the Egg problem; or Which Comes First, Ideas or Interests?

A number of the commentators refer to this core problem, or what Steve Davies aptly describes as the direction taken by “the causal arrow”. My own perspective on the methodology of the history of ideas, especially the history of classical-liberal ideas, has been shaped by a combination of praxeology and class analysis. I think that people pursue their own economic, political, and other interests, sometimes peacefully through mutual cooperation and exchange, but often at the expense of others by means of organized violence through institutions such as the state, the church, and the military (“Throne”, “Altar”, and “Barracks”). Thus the importance of class analysis to identify the “who,” the “how,” and the “what” - who benefits from access to state power and privileges, how do they benefit, and what are the consequences of this system of privilege.[47]

But I also believe in Mises’s important insight developed in the chapter “Ideas and Interests” in Theory and History (1957): “In the world of reality, life, and human action there is no such thing as interests independent of ideas, preceding them temporally and logically. What a man considers his interest is the result of his ideas.”[48]According to this view, the economic, political, and other interests which people pursue (whether ordinary people or ruling elites) depend upon the ideas they have about what their interests are.

Mises went on further to say about the relationship between ideas and interests:

If we keep this in mind, it is not sensible to declare that ideas are a product of interests. Ideas tell a man what his interests are. At a later date, looking upon his past actions, the individual may form the opinion that he has erred and that another mode of acting would have served his own interests better. But this does not mean that at the critical instant in which he acted he did not act according to his interests. He acted according to what he, at that time, considered would serve his interests best.[49]

Ideas, interests, and history play an important role in Mises’s theory of “praxeology,” which he defined as “the general theory of human action,” by which individuals undertake “purposeful behavior” in order to pursue their interests and to achieve their goals or ends.[50] History in Mises’s view was the second main branch of the science of human action after economics. He defined the relationship between the two as follows:

There are two main branches of the sciences of human action: praxeology and history. History is the collection and systematic arrangement of all the data of experience concerning human action. It deals with the concrete content of human action. It studies all human endeavors in their infinite multiplicity and variety and all individual actions with all their accidental, special, and particular implications. It scrutinizes the ideas guiding acting men and the outcome of the actions performed. It embraces every aspect of human activities.[51]

Thus the importance of praxeology for understanding how individuals go about pursuing their various purposes and interests, whatever they may be.

If this Misesian insight into the fundamental basis of human action is correct, then the historian of ideas and social change needs to ask a number of questions about three important groups of people, namely ordinary people, intellectuals, and members of the ruling elite:

What ideas did this group hold about politics, economics, and social organization?
Where did they get these ideas from?
Why and under what circumstances have they changed their ideas, especially about their own interests?, and
What is the best way to persuade them to hold more pro-liberty ideas about these things?

One might also add another sub-group to each of these three main ones, namely dissidents, with the understanding that dissidents may and have historically come from all three main groups. Where do dissidents come from? Are they “born” or “made”? What impact have their dissident ideas had on societies?

An especially problematical group for the liberal reformer is the ruling elite. Very few if any members of any historical ruling elite have willingly given up their privileges in a “Road to Damascus” moment of liberal enlightenment and embarrassment at their ill-gotten gains. Even members of the “founding generation” of the American Revolution and Constitution who were libertarian on so many issues but also slave owners, could not overcome social, family, and economic pressures and emancipate their slaves on the spot. If they couldn’t do it, how can we expect any other, less libertarian-minded ruling elite to do “the right thing” and resign or conduct themselves to the nearest penitentiary in a quiet and orderly manner?

The schematic of the structure of production of ideas which I have drawn up was an attempt to answer some of these questions. It was a functional analysis based upon the application of Austrian insights into the importance of time, scarcity, investment, the division of labor, and the role of the entrepreneur - as well as our study of two historical examples: the Anti-Corn Law League in the 1840s in England,[52] and the development of the modern classical-liberal/libertarian movement in England[53] and the United States since the end of World War II. I hope that this might encourage some of the participants in this discussion to give us their insights into the institutions with which they are familiar, and other historical examples they have studied. In particular I hope Jim Powell will tell us more about the movement to emancipate the slaves in England and America on which he has written recently.

Cost, Scarcity, and Entrepreneurship in the Production of Ideas

Jeffrey Tucker correctly reminds us that a key component in the dissemination of ideas is the cost of their production, duplication, and transmission of those ideas. We are living through a period which has seen an extraordinary reduction in the price of these things as a result of computers and the Internet and we have witnessed the way classical liberals and libertarians have made use of these to advance their causes. However, we should not exaggerate their importance for two reasons: first, similar revolutionary changes in the cost of production of ideas have occurred in the past, and second, these changes affect all participants.

As for the first point, similar instances of technological changes which lowered costs include the invention of moveable type printing in the 15th century which was a major factor contributing to the spread of new religious ideas known as the Reformation; the introduction of the uniform penny post in England in 1840, which lowered the cost of sending material through the mail and which was quickly adopted by the Anti-Corn law League to disseminate its free trade literature; the new technologies of paper production and steam-powered printing presses in the 19th century which lowered the cost of printing books and newspapers for a mass market, permitting several liberal authors, including Harriet Martineau (1802–1876), to become full-time, professional popularizers of free-market ideas;[54] and the mass production of radios in the 1920s and 1930s, which enabled charismatic politicians like Adolf Hitler and Franklin Delano Roosevelt to speak directly to millions of people in order to promote their political agendas. (It is curious that no classical-liberal individual or group took advantage of the radio to spread liberal ideas - perhaps this kind of mass medium is not suited to their spread). There are other examples, but for reasons of length I’ll leave it at that.

Secondly, the lowering of the cost of production of ideas affects not only classical liberals but all groups that wish to disseminate their ideas. A brief advantage may be had by those who use new technology first, but after a while everybody takes advantage of it. As an aside, the Internet was created as a byproduct of military research undertaken by DARPA, the Defense Advanced Research Projects Agency, and was first used by researchers funded by the military who wished to share large amounts of data across the country. An early user of the internet for civilian purposes was the pornography industry, which quickly realized its potential and made important innovations in software such as the “shopping cart,” for online purchasers. The danger is that, once again liberal ideas will get crowded out of the market place of ideas with millions or hundreds of millions of producers trying to hawk their goods and services at the same time. The market has gown, but the relative scarcity of liberal ideas, especially in politics and popular culture, remains the same I would say. Examples of other groups that have taken advantage of the lower costs would include the well-organised campaigns which helped Barack Obama get elected, the Occupy Wall Street movement, and the network of Jihadi groups.

As Jason Kuznicki notes, the problem is not the mass production of ideas per se but the tailoring or selling “our unconventional viewpoint” to a market which is not interested in the finer points of libertarian theory or “utopian visions” - that is, a market of people more interested in solving their immediate everyday problems. Apple no doubt has all sorts of exotic gadgets built by its brilliant engineers in its research labs but it brings to market only the one or two products which their senior managers and marketers think will actually be appealing to consumers. Part of Apple’s skill is in seeing that an unconventional gadget like an iPod might become a phenomenal best-seller once consumers know more about it.

This is also the Holy Grail for the classical-liberal and libertarian movement. The arcane details of children’s rights might be a hot topic of discussion in the libertarian equivalent of our “research labs,” but it is not the hot-button issue which might appeal to ordinary voters at the next election. It is up to the entrepreneurs and marketers of free-market and classical-liberal ideas to find the political equivalent of the iPod and bring it to market. It seems that Tom Paine found a hot-button issue with his best-selling pamphlet Common Sense in 1776.[55] Ayn Rand did much the same thing in 1957 with Atlas Shrugged,[56] and Milton Friedman in 1980 with his TV documentary series, “Free to Choose.”[57] John Papola and Russ Roberts struck a chord with their Hayek vs. Keynes rap video “Fear the Boom and Bust” (2010), which has just over 5 million views on Youtube.com so far.[58]

So we know it can be done - the questions are: What will be the next hot-button issue and what medium is the best one to use to address the issue (pamphlet, novel, TV documentary, or social-media video)? Hence the need for adventurous and innovative entrepreneurs of ideas who are willing to try anything and everything, and investors who are willing to fund such experiments.

What Next and Next?[59]

In another post I will discuss several other issues which my colleagues have raised, in particular:

examples of “direct action” by the people without any apparent intervention by intellectuals (raised by Jeffrey Tucker and Jim Powell)
the importance of popular culture, especially images and songs, in mass political movements (raised by Jim Powell and Steve Davies)
the issue of “ideology”, especially its supposed absence in the American political system (raised by Jason Kuznicki); and
the trigger of “crises” which precipitate fundamental political, economic, and ideological change (raised by Peter Mentzel)

Endnotes

[47.] For a good introduction to classical-liberal class analysis, see Sheldon Richman, “Libertarian Class Analysis,” The Future of Freedom Foundation, June 1, 2006 http://fff.org/explore-freedom/article/libertarian-class-analysis/. For its centrality to French classical-liberal thought, see Ralph Raico, “Classical Liberal Exploitation Theory: A Comment on Professor Liggio’s Paper.” Journal of Libertarian Studies, vol. 1, no. 3 (1977): 179–83; and David M. Hart, Class Analysis, Slavery and the Industrialist Theory of History in French Liberal Thought, 1814–1830: The Radical Liberalism of Charles Comte and Charles Dunoyer (unpublished PhD, King’s College Cambridge, 1994). Online at http://davidmhart.com/liberty/Papers/CCCD-PhD/CCCD_Book_2013.html.

[48.] Mises, “Ideas and Interests” in Theory and History: An Interpretation of Social and Economic Evolution, ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005). /titles/1464#Mises_0844_324.

[49.] Mises, Theory and History, /titles/1464#Mises_0844_320.

[50.] Ludwig von Mises, Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). Vol. 1. /titles/1893#Mises_3843-01_123.

[51.] Mises, “Praxeology and History” in Human Action. vol. 1, /titles/1893#Mises_3843-01_216. See also, the opening paragraph to Rothbard’s “Fundamentals of Human Action,” Chap. 1 “The Concept of Action,” pp. 1–2, and “Appendix A. Praxeology and Economics,” pp. 72–76, in Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles, with Power and Market: Government and the Economy. Second edition. Scholar’s Edition (Auburn, Alabama: Ludwig von Mises Institute, 2009).

[52.] Stephen Davies, “Richard Cobden: Ideas and Strategies in Organizing the Free-Trade Movement in Britain,” Liberty Matters (January 2015) /pages/lm-cobden.

[53.] John Blundell, “Arthur Seldon and the Institute of Economic Affairs,” Liberty Matters (November, 2013) /pages/seldon-and-the-iea.

[54.] Harriet Martineau, Illustrations of Political Economy (3rd ed) in 9 vols. (London: Charles Fox, 1832). /titles/1873.

[55.] Thomas Paine, Common Sense: Addressed to the Inhabitants of America, on the following Interesting Subjects, viz.: I. Of the Origin and Design of Government in General; with Concise Remarks on the English Constitution. II. Of Monarchy and Hereditary Succession. III. Thoughts on the Present State of American Affairs. IV. Of the Present Ability of America; with some Miscellaneous Reflections. (Philadelphia: Printed, and Sold, by R. Bell, in Third Street. MDCCLXXVI). In The Writings of Thomas Paine, Collected and Edited by Moncure Daniel Conway (New York: G.P. Putnam’s Sons, 1894). Vol. 1. /titles/343#lf0548-01_label_074.

[56.] Ayn Rand, Atlas Shrugged (Random House, 1957).

[57.] Milton Friedman and Rose Friedman, Free to Choose: A Personal Statement (Harcourt, Brace, Jovanovitch, 1980; Harmondsworth: Penguin, 1980). It was made into a 10-part TV documentary series, “Free to Choose,” broadcast by the Public Broadcasting Service (PBS).

[58.] John Papola and Russ Roberts, “Fear the Boom and Bust” (2010), EconStories https://www.youtube.com/user/EconStories. https://www.youtube.com/watch?v=d0nERTFo-Sk.

[59.] My title is borrowed from Richard Cobden, What Next and Next? (London: James Ridgway, 1856). /titles/2652. Also in Richard Cobden, The Political Writings of Richard Cobden, with a Preface by Lord Welby, Introductions by Sir Louis Mallet, C.B., and William Cullen Bryant, Notes by F.W. Chesson and a Bibliography, vol. 2, (London: T. Fisher Unwin, 1903). “What Next and Next?” /titles/231#lf0424-02_head_008.

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Part of: David M. Hart, "On the Spread of (Classical) Liberal Ideas" (March 2015)