All Commentary
Friday, October 28, 2011

Social Cooperation, Part 3

Carl Menger's analogy.

In recent months I’ve drawn attention to the emphasis that free-market liberals historically have placed on social cooperation. (Here and here.) Contrary to the partly self-inflicted caricature of the libertarian as an atomistic, rugged, self-reliant individualist, the weightiest thinkers in this tradition have in fact stressed the indispensability of sociality to human well-being.

Indeed, we have seen that for these thinkers society is not merely an instrumental means to human flourishing, but also a constitutive means. Hence the defense of the individual is the defense of society and vice versa. (To see the difference, think about Roderick T. Long’s example: If I want to dress up for a special occasion, driving to a store and buying a necktie is an instrumental means to that end, a bridge to my objective that is not valuable in itself. But wearing the necktie is a constitutive means – part of what is meant by “dressing up.”)

Some liberal thinkers have attached such importance to social cooperation that they have likened society to a living organism. This is bound to strike many people, including some libertarians, as bizarre, even collectivist. For that reason, it will be worthwhile to consider what these thinkers had to say. Here I’ll focus on Carl Menger (1840-1921), founder of the Austrian school of economics. In a subsequent column I’ll look the similar views of Herbert Spencer (1820-1903), the most famous liberal philosopher of his day.

Twelve years after publishing his pioneering Principles of Economics, in 1883 Menger issued his Investigations into the Method of the Social Sciences with Special Reference to Economics. In this book Menger sought to establish the study of society, especially economy, as a legitimate intellectual discipline in contrast to the German Historical School, which denied the existence of social or economic “laws” applicable to all human beings at all times and places. Late in the book, and consciously following Plato and Aristotle, Menger draws “the analogy between social phenomena and natural organisms.”

A Certain Similarity

“There exists,” Menger wrote, “a certain similarity between natural organisms and a series of structures of social life, both in respect to their function and to their origin. In natural organisms we can observe a complexity almost incalculable in detail, and especially a great variety of their parts (single organs). All this variety, however, is helpful in the preservation, development, and the propagation of the organisms as units.”

He went on to point out that each component has a role in that process. Should one of the parts be unable to perform its role, the organism’s ability to thrive is impeded. Then he wrote:

We can make an observation similar in many respects in reference to a series of social phenomena in general and human economy in particular. Here, too, in numerous instances, phenomena present themselves to us, the parts of which are helpful in the preservation, the normal functioning, and the development of the unit, even conditioning these. Their normal nature and normal function in turn are conditioned and influenced by the function of the unit, and in such a way that the unit cannot be imagined in its normal appearance and function without some essential part or other. Nor, conversely, can such a part be imagined in its normal nature and function when separated from the unit. It is obvious that we have here a certain analogy between the nature and the function of natural organisms on the one hand and social structures on the other. [Emphasis added.]

The portion I’ve emphasized makes the Greek point that persons cannot live fully human lives outside society.

Menger applies the same analogy to the origins of these biological and social entitites.

The same is true with respect to the origin of a series of social phenomena. Natural organisms almost without exception exhibit, when closely observed, a really admirable functionality of all parts with respect to the whole, a functionality which is not, however, the result of human calculation, but of a natural process. Similarly we can observe in numerous social institutions a strikingly apparent functionality with respect to the whole. But with closer consideration they still do not prove to be the result of an intention aimed at this purpose, i.e., the result of an agreement of members of society or of positive legislation. They, too, present themselves to us rather as “natural” products (in a certain sense), as unintended results of historical development. [Emphasis added.]

Familiar Theme

This theme – social institutions as a result of human action but not human design — will be familiar to those who know Menger’s work or Austrian economics generally.

One needs, e.g., only to think of the phenomenon of money, an institution which to so great a measure serves the welfare of society, and yet in most nations, by far, is by no means the result of an agreement directed at its establishment as a social institution, or of positive legislation, but is the unintended product of historical development. One needs only to think of law, of language, of the origin of markets, the origin of communities and of states, etc.

Menger’s conception of markets and even of law as undesigned orders was of course elaborated later by, among others, F. A. Hayek.

But Menger hastened to add that “[t]he above analogy . . . is by no means one which is based upon a full insight into the nature of the phenomena under discussion here, but upon the vague feeling of a certain similarity of the function of natural organisms and that of a part of social structures.”

For one thing, he wrote,

The so-called social organisms, on the contrary, simply cannot be viewed and interpreted as the product of purely mechanical force effects. They are, rather, the result of human efforts, the efforts of thinking, feeling, acting human beings. Thus, if we can speak at all of an “organic origin” of social structures, or, more correctly, of a part of these, this can merely refer to one circumstance. This is that some social phenomena are the results of a common will directed toward their establishment (agreement, positive legislation, etc.), while others are the unintended result of human efforts aimed at attaining essentially individual goals (the unintended results of these). [Emphasis added.]

He might have emphasized that these “thinking, feeling, acting human beings” are cooperating with one another in virtually all they do.

Don’t Be Literal

In an earlier chapter Menger cautioned that a national economy must not be construed as a literal organism having a single set of ends.

The nation as such is not a large subject that has needs, that works, practices economy, and consumes; and what is called “national economy” is therefore not the economy of a nation in the true sense of the word.. . . .

Thus the phenomena of “national economy” are by no means direct expressions of the life of a nation as such or direct results of an “economic nation.” They are, rather, the results of all the innumerable individual economic efforts in the nation. . . .

. . . Whoever wants to understand theoretically the phenomena of “national economy,” those complicated human phenomena which we are accustomed to designate with this expression, must for this reason attempt to go back to their true elements, to the singular economies [that is, the individuals and households] in the nation, and to investigate the laws by which the former are built up from the latter.

So we have Menger drawing an analogy between societies and organisms, yet reminding us not to push the analogy too far. This is good advice, but in analyzing the “true elements” – the actions of individual agents –we must take care not to overlook the intrinsic sociality of much of what we do. As Roderick T. Long wrote in a private communication:

I think reference to groups is often irreducible, but in a way that’s perfectly compatible with methodological individualism.  For example, there are actions one cannot perform (not because of some causal obstacle, but because nothing would count as performing them) in the absence of the right institutional context: writing a check, getting married, making a promise, etc.  You can’t even describe what the action is without assuming a background of social practices.  But that doesn’t change the fact that those actions are performed by individuals with individual motives.

The “background of social practices” is an idea to which I will return in the future.

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.