Everyone has a hobby. For Matt Bruenig its writing “take downs” of libertarianism as lacking any singularly coherent normative theory. In his latest, he deconstructs the “just desert” basis of capitalism, specifically the claim that capitalism rewards risk. In this post my goal isn’t to defend just desert theories, per se. Rather I’d like to shed some light on Matt’s subversive modus operandi and the fallacies and dangers within it.

For context, I have gone back through Matt’s archive and not found a single positive defense of his own normative framework. In this sense he prefers to define his ideology negatively as “not x therefore y”. And while he makes regular gestures towards egalitarianism, he has yet to show how his own abstract normative theory is any less arbitrary or sensitive to the deconstructionist tactics he is fond of employing.

From Kant to Hegel to Hayek

To understand why Matt is so successful at taking apart normative theories and so cautious about defending his own, it’s worth tracing the background assumptions of modern moral philosophy back to Kant. Kant famously claimed our conceptual commitments are inescapably normative (e.g. if I say x is a cat I am “responsible” for a particular judgement about x) and that, in making those commitments, we are required to maintain justificatory, inferential and critical consistency (e.g. we can’t simultaneously say x is not a cat). Kant and followers like Rawls thought you could use this insight to construct a transcendental argument that bridged is and ought. Read philosopher Robert Brandom’s work for more on this, or enjoy this short video.

The key error Kant made was in taking as sacrosanct the “mentalistic” paradigm inherited from Descartes, which gave “subject” and “object” ontological primacy, and “representation” primacy in theories of epistemology and intentionality. If you don’t believe me, read about Fichte’s notion of “pure I“. It took Hegel to enter the scene and point out how weird the implication of a “noumenal” or objective realm of “things in themselves” was if it meant having knowledge of the inaccessible. So he “naturalized” Kant’s theory of normativity by arguing that it had to be situated socially and recognitively in cultural practices. This in effect rejected the subject-object paradigm by shifting to an intersubjective theory of meaning. See Jurgen Habermas on “de-transcendalizating mentalism” for more on this.

Normativity is, to paraphrase Kant, a property that leads a concept to self-bind, e.g. a duty as distinct from compulsion. Hegel accepted this but argued that it in no way necessitated Kant’s transcendental approach in which de-contextualized or “pure” normative principals were derived prior to interaction with concrete problems. Rather, Hegel argued normativity was immanent to the social process of intersubjective norm construction, the most “objective” of which are our stable institutions. We are bound to the normative commitments implicit to our objective institutions because in a very real sense they mirror us. This is a deep concept, but can be easily understood as a precursor to the idea of the “extended will” that follows from embodied cognition in cognitive psychology.  As philosopher of mind Andy Clark explains the idea,

advanced cognition depends crucially on our ability to dissipate reasoning: to diffuse achieved knowledge and practical wisdom through complex social structures, and to reduce the loads on individual brains by locating those brains in complex webs of linguistic, social, political and institutional constraints.

The rationality of our social structures is therefore often hidden as a feature, not a bug. Yet as self-conscious beings we ought to be able to extract and make explicit the implicit principals that pre-structure our social practices. For example, perhaps “justice as fairness” isn’t a context-free normative standard which looms over all other practices. Instead, what if discrete norms like “I cut, you choose” or “lets flip a coin” or “first one to improve and enclose unclaimed land gets it” develop spontaneously through cultural evolution as low cost ways of securing agreeable cooperative social relationships? For more on this idea, read Joseph Heath’s “A Puzzle for Constractualism“.

Rawls would actually be sympathetic to this view, since he characterized the egalitarian norm as based on conflict reduction. But that does not imply that particular norms can be isolated and then imposed from the top down. This makes the basic category error that FA Hayek explains as being behind all forms of “rational constructivism”. The fairness norm only gained its normative authority or self-binding character from the legitimating history of mutual recognition that preceded and maintained it in specific cases. This would seem to better match observed reality, where there is not, for example, one universal standard of “fair ownership”, but a multiplicity of standards rooted in historical practice. Thus instituting Rawls’ difference principal, for example, would not be just in the US context without substantial cultural buy-in — for the same reason imposing American capitalistic property norms in developing countries regularly leads to violent push back.

Bottom Up Normativity

If that is how actual normativity arises in practice, talking about “just desert” in abstract is totally wrong headed. Instead you would need to instantiate a desert norm in a concrete social reality. Then you would have to carefully investigate the genealogy of the norm to discover it implicit rationale. Jurgen Habermas calls this approach “rational reconstruction.” Note that reconstructing the rationality implicit in normative behavior is an interpretive (not descriptive) exercise.

People who follow this otherwise post-Kantian tradition have actually done this for the American context of capital and desert. The Hansmann argument for shareholder primacy, for example, rests on the demonstration that ownership in a firm will tend to flow to the constituency with the lowest governance cost, which for complex companies tends to be shareholders (specifically, it can be demonstrated that shareholder primacy is hicks-kaldor efficient). Risk is a non-trivial part of this issue. As residual claimants, capital holders are the most expendable insofar as they are what remains after other contractual obligations have been honored.

So does that mean at some point in history someone went out and designed corporate law based on a grand utilitarian moral theory? No, on the contrary. These norms of ownership were discovered in the same bottom up way as norms like “I cut, you choose”. Scholars like Hansmann had to explicitly reconstruct this rationale through interrogation of the alternatives, like stakeholder theory. (By the way, reconstruction of the welfare state also points to a transaction cost basis, not egalitarian principals.)

Still, it must be said that capital owners have a holistic normative relationship with the present state of affairs — that is, the bundle of concepts that tend to accompany norms of ownership, like “entitlement” and “deservedness,” apply perforce. From their own standpoint and from the point of view of the community at large, the reductive claim that “shareholders retain profits ONLY because that’s the best for the social welfare function” is illegitimate because the rational reconstruction only ever identifies one feature of an ethical totality.

To see this, consider that the dividend cheques get delivered not due to an awareness of Ronald Coase’s most cited work, but because of the self-binding intersubjective concept of ownership itself. It isn’t just the legal realist’s vision of command and compulsion. The USPS guy delivers the cheque largely because he has internalized and affirms the prevailing norms of ownership by which he himself implicitly benefits. As H.L.A. Hart put it, his recognition gives the law an “internal point of view.”

In this light, Matt’s struggle for abstract consistency is at root subversive. He has innumerable posts arguing against private ownership that would make no normative distinction between a company merger and civil asset forfeiture, other than perhaps that the latter is typically more regressive in its effects. The main upshot of Matt gaining any following of import would therefore be to further undermine the distinguishing legitimacy of various social norms through raw philosophical sophistry.

Whose Filibuster?

This CNBC show about shoplifting has assumed it is immoral without ever making an argument for that view.

— Matt Bruenig (@MattBruenig) December 25, 2013

Seriously? If Matt were a luck egalitarian he’d be Anton Chigurh. Of course, Matt can go ahead and keep shoplifting without really causing much harm. This is because he is in essence free riding on the ethical behavior of everyone around him. If everyone behaved like Matt, on the other hand, it would be a catastrophe. This conclusion, too, can be rationally reconstructed by showing how norms play an important role in self-binding us to mutually beneficial cooperative equilibria.

Consider the US congress, which has reached new heights of dysfunction in recent years largely because congressional norms have collapsed. Writing for the National Journal, Norm Ornstein gives the profligate use of the senate filibuster as an example:

Rules matter, but in the Senate, norms and the larger fabric of interactions matter as much or more. The fact is that Rule XXII, which governs debate, remained the same from 1975 until this Congress; and for most of the era, it worked fine. Majorities were at times frustrated by the minority’s use of filibusters, but they were relatively rare, and most issues were worked out before legislation or nominations reached the floor. There was a larger understanding that filibusters were not to be used routinely.

The beginning the anti-social zeitgeist in congress probably began with some Republican strategist throwing his or her hands in the air and yelling “the norms are arbitrary. All that matters is that our normative framework is the right one!” The irony is that the collapse of the anti-filibuster norm has ended up hurting both the Democrat’s and Republican’s political agendas. Think of it in terms of a Prisoner’s Dilemma. The norm against its use acted as a self-binding mechanism against strategic gamesmanship, and helped make legislative cooperation stable.

To make this explicit, consider the model V(x) = U(x) + kN(x) where the value of doing x is given by its private utility plus its norm appropriateness weighted by k. k is the weight you assign normative considerations (i.e. how self-bound you are to a norm) and is a reaction function based on other agent’s k (that is, it’s intersubjective). Let’s say x represents the decision to filibuster. If k ever declines, say for the historical factors identified in Ornstein’s article, it risks collapsing as a self-fulling prophecy. Normativity goes out the window. Both parties become mired in strategic legislative undercutting. Multiple ethical equilibria and all that.

This is the sense in which I think a world full of Matt Bruenigs would be worse in virtually everyone’s eyes. He seems to think that by pulling the normative rug out from under capitalism he is improving the chances that America will fall into his half baked ideal of market socialism, whereas it is only liable to cause a cultural concussion. Identifying anti-social behavior and rhetoric is a real enough problem that I think it’s worth coining a new term to help with calling it out when it happens: