Saturday, November 28, 2009

Concretes and integration in industry

While idly reading some of the magazines on the lunchroom table at work I came across the September 2009 issue of Climate Control News, a trade magazine for the Australian HVACR industry. What caught my attention was the article on the second to last page: “Will the real economy please stand up?”. That title is provocative in itself, but even more interesting was the editor’s lead-in:

Short-term interventions like the solar rebate and automotive industry packages are prime examples of how markets can become distorted. They also make it difficult to plan ahead, something all businesses need to do, David Styles argues.

How could any Objectivist not find that intriguing? Unfortunately, despite that introduction and some good points throughout the article, Styles’ piece isn’t exactly a shining example of objectivity and moral certitude.

After giving some concrete instances of government intervention and their immediate first-order consequences, Styles makes a perfectly valid contrast between a Real Market and a Distorted Market:

If we consider a market that changes only by natural ‘organic’ intervention – changes in consumer demand, advances in technology and product development activities etc – this is the ‘real market.’ It follows that a market which is fundamentally changed for short or long terms by non-organic intervention is a ‘distorted market.’

That much is good to see in an industry publication and in an article aimed at businessmen and regarding the heart of what they do… except for one point. That point is, of course, the packaging of market influences with political influences together under the concept of ‘intervention.’ With that conflation the recognition of the fundamentality of the moral difference between the two kinds of influences upon the direction taken by markets is seriously undercut. Yet, even with that, he cannot escape the obvious questions raised by both the other terminology he uses and the whole point of his article which necessitated that terminology. There is no escaping reality.

His point is to get across to people in the HVAC industry that they need to analyse not only the effects of political interference directly on their own business lines (first-order consequences) but upon the businesses of related industries and how this will affect them (second-order consequences), and that in response to this businessmen have to take care to separate long-term ‘organic intervention’ from short-term ‘political intervention’ when formulating business plans. He later notes planning has always been difficult, and commiserates with businessmen that the political intervention makes planning even harder, but nevertheless businessmen should still try their best at this if they wish to stay in business. He ends his article with commentary on the merits or otherwise of major capital investments, noting that capex decisions should be based on the real market and not government-induced distortions.

His prescriptions for planning are respectable but threadbare, but that’s not the problem. The obvious other conclusions to be drawn from all this, never mind the legitimacy of taking for granted the general dim view of interfering politicians taken by businessmen, is that there is something wrong with political intervention. Even just the act of labelling government intervention as distortion, and contrasting it to traditional market influences being given the nobler term of real, implies a definite moral estimate. By making this distinction, demonstrating the consequence of political intervention, and showing that it is applicable to all business as such by concretising the same one result for a few markedly different industries, he is necessarily going to strengthen the resolve of businessmen to resist interference by arming them against busybody’s assertions about businessmen just being subjectively miffed because of their ‘turf’ being invaded. Naturally, just indicating the practical consequences of interference is nowhere near enough to support a case against it, but it is nevertheless a hefty sword that can be used in that cause and Styles knows it. Thus precisely because of the terminology and good practical points he raises he cannot avoid touching the moral issues. Indeed, the conclusions about the merits of political interference that can be drawn from his good points (and the intent of the article itself) are screaming out for attention so loudly that he felt the need to expressly disavow those conclusions not just once but twice in a single-page piece of approximately just 1000 words.

One can understand a reticence to deal with broad moral and political issues head on in an article intended to make a point about how to make capital-investment decisions, but a simple statement that those issues are beyond the scope of the article would have been more honest compared to how he actually dealt with them. For instance, right after making his distinction between “kinds of intervention” and castigating intervention as causing distortions he promptly states “There’s nothing necessarily wrong with intervention.” His second disavowal is that, right after noting that short-term interventions from government make business planning difficult he says:

I am not going to argue that governments shouldn’t have these kinds of interventions: perhaps there should even be more of them for other industries.

The first clause in sentence would admit of a variety of readings were it to stand alone. An innocent reading, consistent with a desire to focus on the planning-methodology, is the previously noted desire not to stray beyond that scope, but the inexcusable second clause rules that out and leaves behind the more distasteful readings. It is not simply that he notes that intervention makes life difficult for individual businessmen but that he expressly notes that it is a market-wide phenomenon. In the same location as talking about the making of major capital investments he clearly states that government intervention makes bad economic times even harder to deal with:

However, when the good times end, as they inevitably do, the worse things get the greater the distortions introduced and the harder it is for business owners and managers to describe the near-term future and plan for it.

I cannot believe that he – someone who is perfectly capable of taking a larger-picture view of effects on entire markets and capital-investment programs – does not himself either know or suspect that a large part of why the good times end is precisely because of rising government intervention causing businessmen to be more wary regarding their capital-investment decisions and hence their purchasing and employment decisions. No, he is not that dumb. This is no mere case of pragmatism, which would be bad enough, but of him consciously avoiding moral and political conclusions he doesn’t want to face. The result is that Styles’ disavowals read rather much like bootlicking. As to whose boots, I neither know nor care.

What we saw here was a perfect opportunity to interest businessmen in wider political and philosophical issues by legitimately connecting those issues directly to their values, which opportunity was squandered in a sad display of cowardice masquerading as neutrality and the abject refusal to put two and two together in brazen defiance of what was expressly identified as being worthy of consideration. There are plenty of good ways in which a similar article with the same core point could have been made while avoiding that result. All that would have been required in this article was to raise the obvious questions and then note, firstly, that answering them was beyond the scope of the article, but secondly, that yes a moral case does exist and in which reference to concrete consequences as Styles indicates do legitimately back up that moral case. If I were writing that editorial I would have touched on the matter lightly, so that I wouldn’t come across as a preacher out to harangue someone, but nevertheless rightly, so that I would come across as a thinker with a good point to make. I would have then concluded the moral and sociopolitical element by referring interested readers to “Why businessmen need philosophy,” and kept the main focus of the article on the planning-methodology point. A trade publication is not an appropriate vehicle for overt political teaching, but when articles are clearly marked as editorials or opinion pieces then some indication that philosophical and sociopolitical issues ought to be looked at is not just permitted but expected. Styles didn’t simply fail, he abdicated.

This article and its problems illustrates a number of points. The first is that reality always wins in the end, that nobody can evade it totally, and that those who try will get caught out eventually. No Objectivist needs to be told that, but it is nice to see at least some example of it in action even in a grievously flawed article. Notice that the purpose of his article required he draw the distinction he does, and required that the consequences he pointed out had definite moral and political implications. Styles’ audience was electricians, refrigeration mechanics, HVAC engineers, and so on, all of whom are thoroughly worldly. They are personally and daily facing concrete examples of the business operation problems he mentions. What Styles has done is specify principles by which this can be understood, and dealt with both at a business level and a political level. He intended the former and succeeded, and intended to avoid the latter but failed. I don’t doubt that at least some will follow in step behind him and avoid facing the implications he avoids, but I am confident that a sizeable number will step right over his cowardice and draw the conclusions that he doesn’t want them to – after all, that is precisely why Styles felt the need to disavow those political conclusions twice in a short space. Many of these men already dislike intervention, and I have heard too many comments from tradies and small-business operators detailing contempt for regulatory systems and politicians who’ve never done an honest day’s work in their whole lives to believe that they wont think for themselves. Styles' only alternative to not providing the material for those conclusions would have been to talk about something else entirely. I am glad he didn’t.

The second point is that it underscores the need to provide integrations of concretes with principles to businessmen at levels a broad as they can handle. Even if they carried on drawing their conclusions as I expect most will, the evidence and these conclusions are only suggestions, and, as noted, are nowhere near enough to support a case against government intervention on their own. Styles’ disavowals were not standalone comments but were tied up with what were arguably bribes and fear-mongering: his first disavowal was connected with the benefits that businesses in solar power, car manufacturing, car sales, and car maintenance received as a result of government largesse, and his second disavowal was a suggestion that businesses in other industries should get a piece of the action too. The bribes are the prospect of more government money coming their way (early on in the article he notes that he's getting solar panels installed at government expense, and the contractors installing them say he's far from the only one), and the fear-mongering is a loss of the money already coming their way (eg no more solar panel sales). Styles’ arguments there still need to be repudiated formally. Note that his audience’s own estimates of themselves and each other are also at issue: by trying to inculcate the idea that there’s nothing wrong with intervention (and by including market forces under the same term) he is trying to assuage the guilt of those who have been pushing for more intervention and stimulus packages and also to blunt the moral case of those opposed to it. What tradesmen and businessmen need to be shown is that government intervention is wrong as a matter of morality, that as a result the government intervention is also going to be impractical, and that in concrete for each businessman they will be net worse off because the costs they will face arising from intervention elsewhere will outweigh any benefits they get from intervention that turns out to be in their favour. The idea that they can look each other in the eye after supporting intervention needs to be brought into disrepute. What they need is to be taught the value of bona-fide selfishness, and to practice it proudly rather than follow the pseudo-selfishness of publicly supporting intervention in order to get a cut of the booty.

The third was to indicate a particular avenue of activism worth exploring. Ayn Rand noted that the world was saved one mind at a time. What we also saw here was another means by which this can be done. LTE campaigns and other publication-activism shouldn’t be limited to newspapers and similar publicly-available outlets. Other media are also legitimate avenues for activism, such as industry publications. Naturally, precisely because they are specialised the content of an LTE should be similarly specialised so as to engage the particular values of the audience. Many are of course already doing just that, but here’s a reminder for all.

Finally what we also saw was evidence that poor epistemology in both concept-formation and inference of conclusions is a hindrance to clear thinking on moral issues, just as it is a hindrance to clear thinking on any other issue. Men today, particularly the hands-on types who Styles was addressing, have enough of an idea of how to think for us to get a good hearing and to expect a favourable outcome so long as we do engage their values in a reasonable manner (which was part of why he had to make his disavowals), but the problems that do exist make the effort required that much harder and the time it takes to get that outcome that much greater. This degree of rationality cannot be taken for granted, especially not with today's schools. If men’s thinking skills go down the toilet then all the moral and political activism in the world, however well funded and organised, will amount to nothing. Thus as and when the genuine opportunity arises we should also be promoting reason as a primary issue, that rather than using reason to get across points regarding its applications we should also use applications to get points across regarding reason itself. For instance, if CCN had an LTE section I would also be criticising Styles for that ‘intervention’ conflation and making legitimate references to objective concept-formation. Activism for saving the world cannot rely solely on making moral and political cases. The means of saving the world has to include activism in favour of reason in and of itself, separate from any particular application. If that gets put in place then its use for applications will be far more productive and the world will be saved that much sooner and with less destruction.


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