Challenging, Bargaining, and
Royalty:
An Analysis of Libertarian Argumentation
By Daniel Klein, Economics, George Mason University,
and the Ratio Institute
The Hayekian Narrative
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Hunter-gatherer. Society as organization.
Centrally planned, hierarchical. Shared
experience and sentiment. Still in our genes.
Settled hierarchy, organized society
Commercial revolution, extended order
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Philosophy of liberty and spontaneous order
Collectivist reaction, armed with democracy and
stolen vocabulary
Social-democratic hegemony, protracted cultural
struggle
2
Ideological Lock-in
 It
is very rare that one’s
ideological sensibilities change
significantly after the age of 30.
 To influence ideological
sensibilities, you must reach the
young.
3
Ludwig von Mises:
“It is impossible to understand
the history of economic
thought if one does not pay
attention to the fact that
economics as such is a
challenge to the conceit of
those in power.”
4
Position Q
Belief V
Belief W
Position R
Belief X
Position S
Belief Y
•
Position L
Position P
Belief Z
Position T
Positions
More Libertarian
More Statist
Bargainer begins by challenging Belief Z.
Challenger begins by challenging Belief W.
5
2 Classical-Liberal Character Types

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Classical liberals favor points within the
left ”20 yd line”
Challengers and Bargainers: Both privately
favor positions left > right, at least to the
20 yd line

The difference highlighted here is not a
difference in privately held policy views
6
Challengers

They say to the listener: Speaker B is
misguided because he is statist.
7
Bargainers:

They say to the listener and to Speaker B:
Speaker B is misguided, and hence more
interventionist than he should be.
8
Intended effects
Intended effects on:
Speaker B
Challenger
Bargainer
Mortification,
incapacitation.
Moderation,
persuasion.
Listener
Mortification,
incapacitation.
Conversion.
Edification.
Moderation,
persuasion.
Intimation
9
Turn, turn, turn
To every thing
turn, turn, turn
There is a season
turn, turn, turn
-- The Byrds
How much one should turn depends on
his abilities and the segmentation of his
discourse situations
10

My take on challengers and bargainers
started with:
Shelby Steele, The Content of Our
Character: A New Vision of Race in
America (1991)
11
Not to Oversell It

Some not categorized:
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David Hume, JB Say, Richard Cobden, Herbert
Spencer, William Graham Sumner, Albert Jay
Nock, HL Mencken, Charles Murray, Johan
Norberg, David Friedman
To know how to categorize, it is not sufficient
to read their works.
12
Challenger Gallery
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Thomas Paine –
American
revolutionary
13
Challenger Gallery

Frédéric Bastiat –
French libertarian
economist.
However, as B.
Baugus points out,
he also sometimes
bargained.
14
Challenger Gallery

William Lloyd Garrison
– American abolitionist.
“Upon being reproached
for the habitual severity
and heat of his language,
Garrison retorted, ‘I have
need to be all on fire,
for I have mountains
of ice about me to
melt.’”
(Rothbard Egal. p245)
15
Challenger Gallery

Ludwig von Mises –
Austrian political
economist
16
Challenger Gallery

Ayn Rand – RussianAmerican novelist
and pop philosopher
17
Challenger Gallery

Thomas Szasz –
“The Myth of Mental
Illness”
18
Challenger Gallery

Murray Rothbard –
Amer. libertarian
polymath
19
Challenger Gallery

Robert Higgs –
Economist, editor
The Independent
Review
20
Challenger Gallery

Walter Williams –
American
economist and
columnist
21
Bastiat
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Highlights that the essence of government action is
coercion.
When private citizens do what the state does, we call it
crime:
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Makes plain that he is for the fundamental reform:
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“There are people who think that plunder loses all its immorality
as soon as it becomes legal.” (p.29)
“The state is the great fictitious entity by which everyone seeks
to live at the expense of everyone else.” (p. 144)
“I confess that I am one of those who think that the choice,
the impulse, should come from below, not from above, from the
citizens, not from the legislator . . .” (p.12)
Makes categorical moral arguments against coercion:

“and the contrary doctrine seems to me to lead to the
annihilation of liberty and human dignity.” (p. 12)
22
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Scorns statism:
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“I do not know to what barbaric century we should
have to return to find on this point a level of
understanding comparable to that of the socialists.”
Suggests that human instinct and public opinion
are systematically biased toward statism: The
whole argument about the seen and the unseen.
Protests the general political culture of his
society:

“Good Lord! What a lot of trouble to prove in political
economy that two and two make four; and if you
succeed in doing so, people cry, “It’s so clear that it is
boring. Then they vote as if you had never proved
anything at all.” (p.11)
23
Argues that statism is sustained by a
number of superstitions and taboos:
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“Need it be said that we may have been, in this
respect, duped by one of the most bizarre illusions
that has ever taken possession of the human mind?”
(p142-43)
The inconsistent belief system: “consists in requiring
everything from the state without giving anything to it
. . . is chimerical, absurd, childish, contradictory, and
dangerous. Those who advance it in order to give
themselves the pleasure of accusing all governments
of impotence and exposing them thus to your violent
attacks, flatter and deceive you, or at least they
deceive themselves.” (p. 151)
24
MISES
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Mises never had secure professional standing, and as the
little he had disappeared, he became more and more
challenger-ish.
Highlights that the essence of government action is
coercion.
When private citizens do what the state does, we call it
crime:
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“It is important to remember that government interference always
means either violent action or the threat of such action. Government is
in the last resort the employment of armed men, of policemen,
gendarmes, soldiers, prison guards, and hangmen. The essential
feature of government is the enforcement of its decrees by beating,
killing, and imprisoning. Those who are asking for more government
interference are asking ultimately for more compulsion and less
freedom.” (p. 715)
However, Mises does condemn “natural law” in the sense of “a perennial
standard of what is just and what is unjust” (p. 716, see also 717)
25
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Makes plain that he is for the fundamental reform:

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Makes categorical moral arguments against coercion
(even though he would deny it):
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“the Santa Claus conception of government” (p. 846)
Protests the general political culture of his society:
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“Laissez faire means: Let the common man choose and act; do
not force him to yield to a dictator.” (p. 12)
Scorns statism:

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Indicates that he favors laissez faire (p. 725)
“our age of passionate longing for government omnipotence” (p.
725)
Argues that statism is sustained by a number of biases:

“All this passionate praise of the supereminence of government
action is but a poor disguise for the individual interventionist’s
self-deification. The great god State is a great god only because
it is expected to do exclusively what the individual advocate of
interventionism wants to see achieved.” (p. 727)
26
Challengers
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Offer the young reader esteem for his
wisdom and courage
This gives life to a mutual-admiration
society gathered around the challenger
Inspire bold and independent thinking
Found movements
Teach adherents what they are and how
they stand apart
27
Challengers
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The challenger tends to be self-centered.
He tends to have a high estimation of his
own importance and destiny.
Importance not only in what he has to
say, but in his believing it, because of his
super acute wisdom or judgment.
28
Bargainers
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Suppose Joe is a classical liberal and in a
discourse situation is bargaining, arguing
for Belief Y over Belief Z.
On higher level issues, Joe might:

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falsify his beliefs
acknowledge his true beliefs
remain mute or ambiguous
29
Bargainer Gallery
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Friedrich Hayek –
Economist and
philosopher
30
Bargainer Gallery

Aaron Wildavsky –
Amer. political
scientist
31
Bargainer Gallery

Richard Epstein –
Amer. legal scholar
32
Bargainer Gallery

Tyler Cowen –
American
economist
33
Bargainer Gallery

Virginia Postrel –
American author,
journalist, editor
34
Bargainer Gallery
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John Tierney –
NY Times columnist
35
HAYEK
“Use of Knowledge” article:
 Disguises the voluntary/coercive distinction:
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Use “decentralization” and “competition” rather than “freedom”
or “liberty”: p. 521, 523, 524
Never says he favors fundamental reform.
Claims that the disagreement is a matter of intellectual
error, rather than fundamental commitments. Hence,
persuasion of mature minds remains possible:

“[T]he differences can indeed no longer be ascribed to political
prejudice. The remaining dissent seems clearly to be due to
purely intellectual, and more particularly methodological,
differences.” (p. 112)
36
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In CoL, he provides multiple vague definitions of
liberty. Never makes clear that ordinary
regulations like minimum wage are coercion.
Hedges and fudges on fundamental policy
issues. Avoids them, or treads gingerly.
Eschews the word “libertarian”, using “liberal”
instead.
Later, following 1960, with waning status, Hayek
becomes more challenger-ish. E.g., “The
Atavism of Social Justice”, The Mirage of Social
Justice. Starts using the word “libertarian”
somewhat.
37
Bargainers

Inspire adherents to be persuasive and
effective in meeting and joining and
cooperating with power, to stand with
others as colleagues in power but as
something somewhat different from them.
38
Turn, turn, turn

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If discourse situations were perfectly
segmented, it would behoove the classical
liberal to argue as best suits his abilities
and the situation.
Example: I bargain more in teaching than
in writing. I argue for vouchers, granting
that education should be subsidized for
public good/equity reasons.
39
Prominence
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A key factor of segmentation is prominence.
The prominent are more visible in all that they
do. They more need to project a single persona.
The less prominent can more effectively play it
both ways.
I think people ”turn” too little, perhaps because
they have an inflated notion of their own
prominence and need for consistency.
We often try to emulate our heroes, but our
heroes were more prominent than we.
40
Declining segmentation?
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The Internet etc may be making it harder
to do this.
Even lectures might find their way onto
the Internet. Exposé.
But vanity may lead us to over-estimate
this constraint.
A little inconsistency is no shame.
41
Connection to Esoteric Writing
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We have assumed the bargainer’s criticism of
Belief Z basically resembles that of one who
sincerely believes Y.
The Strauss dimension: Apparent bargaining as
esoteric challenging.
Here the bargainer’s criticism of Z contains
between the lines criticism of X and possibly W.
For example, Hayek’s explicit definition of liberty
was really mainly a listing of correlates of liberty,
while the true definition of liberty was between
the lines.
42
Royalty
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Enjoys establishment eminence
Two aspects:
1. Eminent among one’s close circle of
peers
43
Royalty

2. That circle is recognized throughout society
as eminent
44
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Royalty enjoys a sense of ascendancy
Royalty acts as though its ideas are or can
become official establishment doctrine
Royalty evades the distinction between the
mature/powerful (speaker B) and the
young/disempowered (the listener). Royalty
acts like all can be persuaded alike.
Royalty downplays any radical implications of
what it might be saying.
Often conceals or blurs their libertarian position
on touchy issues.
Resorts to inconsistency, vagueness, platitude,
elision.
45
Royalty Gallery

Adam Smith
46
Royalty Gallery

Milton Friedman
47
SMITH
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Enjoyed establishment eminence and ascendancy
Explains that the world around us is a manifestation of
his principles. His principles already reign. (Div of labor,
spon order, etc.)
Smith assures the reader that he does not follow the
simple libertarian principle 100% (p. 289).
Smith endorses several contraventions of natural liberty.
One interpretation of this is that he actually believed in
those contraventions. Another is that he is allaying
concerns of his strict adherence to simple radical
principles.
In TMS, he praises gentle, pragmatic reform and
compromise (p. 380)
48

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Smith plays it both ways on natural liberty and
justice: Sometimes the two coincide, but
sometimes he favors contraventions
nonetheless. In the case of restriction on being
a shopkeeper (which he opposes) he says is a
violation, hence unjust, and then adds that it
was also “impolitic” (both Stewart and Millar use
expediency). So he adds another layer within
which he can talk “justice” and yet refrain from
libertarian positions.
Inconsistency? As when he says school costs
may be defrayed by tax-dollars “without
injustice” (WN 815) Or when he restates the
matter of desirable violations in back to back
sentences (WN 324)
49

Honors the powerful:


“he may assume the greatest and noblest of
all characters, that of the reformer and
legislator of a great state; and, by the wisdom
of his institutions, secure the internal
tranquility and happiness of his fellow-citizens
for many succeeding generations.” (TMS, p.
378-79)
Smith writes of party leaders fudging and
dissembling. Irony?
50
Friedman
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He enjoyed establishment eminence and
ideological ascendancy.
He explains that the world around us is a
manifestation of his principles. His principles
already reign. (Div of labor, spon order, etc.)
(pp. 9-13)
Writes of the progress of enlightenment
following Adam Smith (p.33), and the
achievement of a golden era (p. 35). But
interventionist errors “have since” reappeared.
Downplays how pervasive they are today (p.33).
51


Milton and Rose make the voluntary/coercive distinction.
However, they blur the definition of “freedom” somewhat
(p. 11), and they are vague about how strictly they
adhere to the liberty principle. They fudge their way
through the discussion of Adam Smith’s three principles
of natural liberty. They tell the reader that they do not
uphold a rigid adherence to the principle.
They honor the process and institutions of power. They
affirm that we can all agree to fix the problems:

“Our society is what we make it. We can shape our institutions.
Physical and human characteristics limit the alternatives
available to us. But none prevents us, if we will, from building a
society that relies primarily on voluntary cooperation to organize
both economic and other activity, a society that preserves and
expands human freedom, that keeps government in its place,
keeping it our servant and not letting it become our master.” (p.
37)
52
Two Issues


Is royalty possible today?
The relationship between Challengers and
Bargainers
53
Is Royalty Possible Today?

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I don’t really think so, though we should
try.
Arguably, Epstein or Gary Becker is the
closest case of royalty.
Charles Murray has some royalty qualities.
If Tyler Cowen got a Harvard econ
appointment . . .
54
Is Royalty Possible Today?

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We are still in the Social Democracy phase of the
Hayekian Narrative.
Academia is structurally pyramidal and culturally
central. There is little prospective of real
classical liberal ascendancy there.
The centrality of academia may be declining.
But the rest of the political culture is increasingly
fragmented.
Maybe cultural royalty is receding generally, not
just for classical liberals.
55
Friedman: An aberration?


His success is cause for hope
However:




A special moment: 1947-1990, say, was a period of
classical liberal renaissance, and Milton rode the crest
of a wave (which he helped to effect, of course).
Many things, like textbook Keynesians, were ripe for
revolt.
The Chicago Econ Dept was a particular and
remarkable thing.
Friedman is a remarkable individual.
Rose Friedman a big part of the story?
56

Friedman’s attitude toward the economics
profession:




He affirms the invisible-hand of the ”academic
market”, to utilize a position of royalty.
He never criticized the economics profession.
Yet he in fact broke out of the academic mode
of thinking and acting.
I think Smith never faced this kind of
tension.
57
Relationship between Challengers
and Bargainers

The main point:
They don’t really disagree on substantive policy
views. They just are playing different roles in
the cultural struggle.
58
How Bargainers can help
Challengers

Bargainers



often show more intellectual flexibility
often have more intimate knowledge of
current policies and issues. Hence, bargainers
can exert intellectual discipline on the
challengers.
often enjoy more mainstream stature, and
can help challengers get an audience and
respectability.
59
How Challengers can help
Bargainers

Challengers can:



serve as the conscience of bargainers,
reawakening them to more fundamental
beliefs
show how broadly the more basic ideas still
hold up
re-activate the bargainer’s authenticity and
reconnect them to nobler pursuits, such as
inspiring and edifying the young
60
A delicate relationship



A bargainer might help a challenger to get
a mainstream hearing, but only if she can
trust him not to become unduly glossy.
The challenger must likewise trust the
bargainer not to turn on him.
Distrusting, they may shun team efforts
altogether.
61
Needful Cooperation


There are gains in team productivity
achieved by the division of labor.
Being mindful of the larger common cause
may encourage mutual contact and moral
support.
62