Welcome to the machine?

As I was reading the "letters to the editor" pages of the weekly "Magyar Narancs" today, some intriguing thoughts occurred to me, as part of a debate on an op-ed piece some week ago the author of the original article criticized his opponents approach to public services. He denied that the state run and regulated, obligatory systems, like the pensions, health care, social benefits etc can be perceived as similar to markets, expressing the balance of supply and demand. (Well, it is a bit vague but it is not my intention to write about the debate. The point is that the, let's say traditional, sociological, approach to state run public services and the economical one, confronted.)

What I really found intriguing was possible consequences of the notion that such social systems can be perceived as markets and as markets, according to basic assumptions of the economy, they should be able to regulate themselves and reach their balance, optimal for everyone. (I know that those systems are not treated equally with for example financial markets, but for my line of reasoning it is not necessary, I only need to assume that they can be modeled as special markets and it is conceivable to imagine those systems as self-regulating ones.) The problem that suddenly crossed my mind after reading this piece was the relationship between this kind of economical thinking and freedom, especially, because it is usually taken granted that free markets are the expression of, or are at least are in a tight correlation with freedom and liberty. But what to do with the automatic self-regulation of social systems thought to be the most effective way of their organization?

As I'm not a philosopher and this is not a monograph on this problem, my post will only outline the basic assumptions and elements, according to the above mentioned debate, in which the piece I've read today emphasized the deliberative decisions of politics in regulating social systems instead of the perception of its opponents as if those systems would consist market elements. I do not want to place politics and economics necessarily in an opposition, but I would argue that politics is the sphere - at least according to classical liberalism - where common decisions regarding the common good are made. It is based on the process of deliberation, however imperfect it is, and everyone participating in it contributes to this common good and is acting in order to define it for the community as a whole. (See the classical assumption that members of parliament are representing not their constituency in a narrow sense, but the community as a whole, even if they are elected based on a system of territorially delimited, individual constituencies, with First Past the Post model.) Therefore, politics and political decision are an expression of freedom, as they are based on a common definition of the common good at every moment and the common good is the result of every community member’s activity based on their freedom. Freedom is needed in order to enable everybody to participate in this process. Sometimes this line of reasoning is driven so far as denying the necessity of special organizations representing particular interests (well, the emergence of capitalism and the nation state, not necessarily together, was a process rolling back and gradually eliminating many particular legal institutions inherited from the earlier period), and the idea of such institutions were historically promoted usually by socialists and Christian socialists, both trends more or less anti-capitalist and not liberals. Therefore the politics' outstanding place in the society can be an expression of freedom and the means to submit the society to this freedom as well.

But for economics the expression of freedom is rather the free market with its individual actors handling alone, according to their individual interests. (Not necessarily rational ones, of course.) Based on this assumption the economics as a science was successfully capable to describe the economy in its working, and develop models to point out the most optimal solutions for economical problems and later for many social problems as well. (I do not want to deal here with the relationship of these models to the reality and their necessary limitations, I'm mostly aware of those but they are irrelevant for my argumentation.) In the last few decades this process went so far as to propose the implementation of laws limiting the rights of legislative bodies and governments to decide over the cornerstones of budgets, the setting up of non-political institutions for ensuring the implementation of those models for the respective state households and recently we had to face a wave of propsals for the reform of social services, such as pensions, health care etc. in line with the idea that those can be self-regulating, based on automatisms. To sum up: more and more parts, institutions and structures of the society are conceived as something capable to run itself without any intervention from outside, or without human intervention. It is only a matter of finding the suitable economical and mathematical model and its implementation.

Thus, I would say, it is highly possible to organize every field of the human society with self-regulating structures, based on automatisms, from education to pensions. But on the other hand, even if these approaches can rely on the assumption that the market is the expression of individual freedom, it makes the traditional process of deliberation unnecessary and redundant. If everything can be made optimally with the help of economics it would be a kind of crime against humanity to reject tit and set up less effective systems. But I think that in this case primarily not the dethronization of politics is an important problem In itself, but the loss of individual freedom in a sense. If we can organize societies this way than it is logical not to let the individuals make their own choices, and therefore societies to decide over common good, but to force them to participate in those systems and the common good is nothing else then the resultant of those systems. Optimal, and as a free market, the expression of freedom as well.

But such a society would be at the same time the very denial of freedom, instead a distopic world, a phalanstery, the most regulated ever, because it would not leave any freedom to choose, but it would prescribe every detail of the individual's life. So the point is, that the more social systems are organized according to economical models in order to ensure self regulation (and sustainability, of course) the less freedom for societies remain and the most free-market society, in which not only economy, but the society itself would be organized according to economical models, would be the most regulated one and the least free. Interesting paradox and probably a good argument against the mania to find the optimal, self-sustaining and self-regulating solutions for social systems. Maybe the right to make the wrong decisions, the right to err, the right to set up suboptimal systems and later correct, modify and reorganize them is a core element of freedom. Perfection is the death of liberty?

Well, what's the conclusion regarding economics and economy? Maybe nothing, as this line of reasoning has nothing to do with economics as a science. But maybe it is a warning against economists trying to organize countries in line with their economic models and convictions. And as this is the case here in ECE at the moment, probably it is not simply a delectable game of mind.

(Otherwise I'm almost convinced that I'm not a genius and therefore the above thoughts are far from being original. But at least they gave me a good hour of thinking and joy.)