Many of us want to live a principled life. We may disagree about what those principles are, but holding to them “through thick and thin” is important to us. Most classical liberals would agree, I think, that keeping promises, playing fair, and being honest are part of the foundation of the free market. I’ve said before that the free society in general requires radical criticism and radical tolerance. For those principles to work, we have to be committed to them, to follow them in some sense “no matter what.” This raises an interesting problem for economics.
Part of the transition from the classical economics of Adam Smith, David Ricardo, and John Stuart Mill to modern economics based on the insights of people such as Carl Menger was the profound realization that the science of economics is not just about buying and selling in markets. As Israel Kirzner explains in his The Economic Point of View, modern economics can apply to any aspect of our lives that involves choice–from deciding how many potatoes to buy to how many kids to have, or whether to acquire wealth by voluntary trade or by taking it from others–and not just to the part of our lives that deals with buying and selling in markets. The economic problem is the same: to compare benefits and costs and to choose a course of action that will maximize net gain. Comparison of that sort is the basis for what economists call “rational action.” (We can of course make mistakes and wind up suffering a loss, but we don’t deliberately make mistakes because, well, they wouldn’t be mistakes.)
So when we commit ourselves to an idea or a course of action, we apparently do it rationally. The interesting thing is that, as important to the workings of the free market as commitment of some sort is, economic theory itself has a hard time explaining it.
Playing by the Rules
Suppose we commit ourselves to playing by the rules and not cheating or acting opportunistically as long as no one else does. If “commitment” means anything, it means not changing our minds when circumstances change, resisting the temptation to choose expediency. Don’t we measure a person’s commitment by the degree to which she refuses to abandon her principles when the expected costs of that commitment rise relative to the expected benefits? Yet how else do we choose to stay committed or not than by basing the decision on the expected costs and benefits? Is the choice to stay committed to something not really an economic one? That would be highly inconsistent, it seems to me, since the domain of economics is, as I’ve said, any action that involves choice.
Honestly, I don’t know the solution. Indeed, whether or not we arrive at the principle of, say, tolerance in a rational manner, it seems to me that remaining committed to that principle, to the extent necessary to assure a well-functioning free market and free society, is from the economic point of view fundamentally irrational.
To make matters more complicated, people also often regard it as virtuous to change their minds when confronted with overwhelming evidence or sound logic to the contrary. We regard being committed to the wrong principles as a vice. We ridicule our intellectual opponents who refuse to give up when we’ve given them evidence and arguments that we believe undermines their position; and we admire and give an extra degree of respect to those who do. But where do you draw the line? When is letting go of a commitment sagacious and when is it merely expedient? I admit that I can’t articulate an answer.
Deeper Normative Principles
But I think I’ve learned that it’s often relatively easy to remain committed to particular beliefs or ideologies, while it’s much harder to stay committed to “deeper” normative principles of tolerance and criticism, especially self-criticism. There are exceptions, of course. Being a dissenter in a fundamentalist society can mean death. But in the United States, although intellectual intolerance waxes and wanes, I think that commitment to a political position is relatively easy. It’s easier to be a libertarian or a Progressive than it is to be intellectually honest and self-critical.
If commitment is fundamentally irrational then it’s potentially dangerous, notwithstanding that it may be necessary, as I’ve said, to preserve liberty. In this light I would argue that to the extent that we do choose our commitments (and then cling tenaciously, irrationally to them), we’re much better off committing ourselves to norms that promote criticism and tolerance, toward ourselves as well as others. I believe these include the principles of fairness and honesty (again, toward both ourselves and others). We should periodically question our beliefs, “check our premises,” as some would say, but not question the belief that we should periodically question our beliefs.
What’s the rationale for that imperative? I’m afraid I can’t say. Nevertheless, I think it’s something worth committing myself to.