Anti-Libertarianism: Markets, Philosophy, and Myth

By Alan Haworth | Go to book overview

Chapter 3

Reducibility, freedom, the invisible hand

However, the immediate task is to explore the relation between these three theses.


1

THE REDUCIBILITY THESIS

Rothbard’s ‘buying a newspaper’ story is supposed to illustrate the point that, as he puts it, ‘The developed market economy, as complex as the system appears to be on the surface, is nothing more than a vast network of voluntary and mutually-agreed upon two-person exchanges’ (1973: 40). Likewise, a propos the Robinsons, Friedman writes that, ‘A working model of a society organised through voluntary exchange is a free private enterprise exchange economy - what we have been calling competitive capitalism’ (1962: 13). 1 (For ‘is’, read ‘is just’. ) According to the reducibility thesis, then, the fully developed market economy is ‘nothing more than’ (or ‘reducible to’) the sum or aggregate of its discrete components, the individual bilateral exchanges which actually take place.

Let us be clear about exactly what the reducibility thesis amounts to, beginning with the observation that, ‘Complex though it appears, the developed market economy is nothing more than a vast network of two-person exchanges’ has a vaguely ‘scientific’ ring to it. It seems to parallel ‘Complex though it appears, the universe is nothing more than a vast array of elementary particles’ or ‘Complex though it appears, the huge diversity of species is nothing more than the expression of genetic material, randomly selected at the micro-biological level. ’ But don’t be fooled. We are dealing with scientism here, not science. There is, of course, some plain and obvious truth in the claim that the whole is nothing more than, or ‘no greater than’ the sum of its parts, and that - just as there would be no universe if there were no particles - there could be no market economy if there were no bilateral exchanges. It is also the case that, within economic theory, the concept of the bilateral exchange has considerable explanatory power because, like the random mutation of DNA within evolutionary theory, it suggests a single, comprehensible, underlying order from which an initially baffling range of superficially diverse phenomena can be deduced. But the libertarian’s version of reducibility functions in neither of these ways. On the contrary, it is an ethical claim.

-12-

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Anti-Libertarianism: Markets, Philosophy, and Myth
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface and Acknowledgements ix
  • Part I 1
  • Chapter 1 - Libertarianism - Anti-Libertarianism 3
  • Chapter 2 - Market Romances I 6
  • Chapter 3 - Reducibility, Freedom, the Invisible Hand 12
  • Chapter 4 - Market Romances II 32
  • Chapter 5 - On Freedom 38
  • Chapter 6 - The Legend of the Angels and the Fable of the Bees 58
  • Part II 65
  • Chapter 7 - Moralising the Market 67
  • Chapter 8 - Rights, Wrongs and Rhetoric 72
  • Chapter 9 - Visions of Valhalla 94
  • Part III 105
  • Chapter 10 - The Good Fairy's Wand 107
  • Chapter 11 - Hayek and the Hand of Fate 115
  • Chapter 12 - Conclusions and Postscript 130
  • Notes 134
  • Bibliography 143
  • Index 147
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