Analyzing and Evaluating Economic Theories:
When thinking about our four economic theories (mercantilism, capitalism, socialism, and communism), we placed them in a formal conceptual framework. We will talk more about formal conceptual frameworks when we talk about cognitive development. For now, we just need to note that formal cognitive operations is the highest level of cognitive development. One of its striking characteristics is that formal conceptual frameworks account for all of the critical variables in a topic we are thinking about. What that means may not be obvious to the reader, but it is a big deal and we will discuss it when we discuss cognitive development. We get a glimpse at its importance now.
Our economic theory was obviously flawed when it consisted only of capitalism, socialism, and communism. We used the golden mean as an intellectual tool that helped us realize that communism is one extreme, but we did not know what the other extreme is.
The golden mean served as an intellectual tool. It sent us in search of the other extreme and we found mercantilism. All right! We could account for both extremes, mercantilism and communism, and that let us see that some how capitalism and socialism make up the golden mean. We have accounted for all of the key topics of our economic theory, now we must figure out how capitalism and socialism can be understood as the golden mean.
Before we turn to that discussion, let me re-emphasize what we mentioned earlier: the dangers that both capitalism and socialism face when entering the slippery slope to their extremes.
The more capitalism moves toward mercantilism, the more corrupt it becomes. The more capitalism slides down the slippery slope to mercantilism, the more it destroys both capitalism and socialism, both capitalist and socialist enterprises. Mercantilism accumulates wealth in the hands of authoritarian rulers and oligarches. It destroys capitalism’s ability to develop and distribute wealth among people and has no interest in economic justice.
Similarly, the more socialism moves toward communism, the more corrupt it becomes. The more socialism slides down the slippery slope toward communism, the more it destroys both socialism and capitalism, both socialist and capitalist enterprises. Communism rejects capitalism and as a result cannot generate enough wealth to distribute.
The more capitalism and socialism move toward each other, the more effectively they work together, the more they enhance each other, and the better each is.
Both capitalism and socialism risk getting on a slippery slope: capitalism toward mercantilism, socialism toward communism. The more they engage each other and work together, the safer and better each is.
I just learned something from Sarah Paine when she was hosted on Dwarkesh Patel’s podcast in an episode titled “The War in India.” Paine pointed out that socialist countries like India viewed capitalism as a way station toward imperialism as capitalists viewed socialism as a way station toward communism. That’s an important point in political science, but it is not helpful when thinking about economics. Still, it is interesting when thinking about countries that fought for their independence from imperialist powers, as India did, while the U.S. aligned itself with those imperialist powers and developed imperialist tendencies of its own (the Philippines, etc.). As we will see, the American commitment to imperialist countries was at the heart of our mistakes in Vietnam.
Back to our discussion of economics.
We the people must understand the threat that the two slippery slopes toward communism and mercantilism make to our economy and to our Democratic Republic. We must make laws that protect each from those threats.
Now let’s turn to the question: How do we think about the unity of capitalism and socialism so that we have a golden mean?
We cannot merge capitalism and socialism. They each have different jobs to do and must preserve their separate identities to do them.
Let me say that again: we cannot merge capitalism and socialism because they each have different jobs to do and must preserve their separate identities so that they can do them.
We seek neither to be capitalists alone nor socialists alone. We seek to help each maximize its ability to do its job in concert with the other. That is a new way of thinking about capitalism and socialism: Capitalism and socialism work best when they work together.
How do they do that? How do they work together? To answer that question, we must figure it out. We must be able to think about them working in concert.
Here I get to provide some intellectual leadership. I get to introduce a new concept: A Morally Grounded, Pragmatic Dialectic. Let’s discuss those three key terms: dialectic, pragmatic, and morally grounded.
I start with the oldest: dialectic.
Dialectic
Aristotle used the term in describing the back and forth we have in conversations: Two people talking, agreeing and disagreeing, and working through their disagreements in a way that enhances their thinking and allows them to reach a conclusion that is better than the one either started with.
When we make a statement in a conversation, we do well to anticipate an argument. Doing well means that we have thought about how others might think. We think about our position, what we think and why, and we think about what others may think and why. By doing both, we prepare for arguments. (Full disclosure: I learned that from Sarah Paine in another one of her lectures.)
We may not have thought of every argument that others might present, but we have prepared ourselves for there to be different points of view. We have prepared ourselves to say something like, “I hadn’t thought of that. Tell me more.” And the conversation goes on.
As we hear more from the “other side,” we can agree and change our way of thinking. But we do not need to do that. We can also say, “Let me think about that and get back to you.”
Taking a little time lets us think more and it even lets us do a bit of research. We don’t want to quit our position too easily. (I learned that from Alysdair MacIntyre when reading his book After Virtue.) The person we are arguing with has thought about their position but maybe not about ours. Someone must give it its due to make sure it is not abandoned when it could work.
Those are little intellectual rules or guidelines about arguments. State your view thoughtfully, listen to other views, think about the other views, and think more about your view. Don’t just quit your view as the others must not quit their views. A little work is called for to reach the best conclusion. That is the dialectic process.
Hegal (Georg Wilhelm Friedrich Hegel, 1770 to 1831) described the dialectic as a thesis confronted by an antithesis. The confrontation or argument can go on for some time, but if all goes well, it results in a new view that uses both the thesis and antithesis and is better than either. Hegal called that improved conclusion a synthesis. Again, the Hegalian dialectic calls for listening and thinking and working to arrive at the synthesis.
The concept of a dialectic provides a practical and efficient way to think about and construct the relationship between capitalism and socialism in our economic theory and arguments.
When We the People talk about economics and ponder what laws and policies we need, a major question we must ask is: Which areas of our lives operate best as capitalist enterprises with private ownership, private control, private profits, and free markets; and which areas of our lives operate best with socialists enterprises with social ownership, social control, social revenue, and socially controlled services?
With just a little thought it becomes clear that perfect answers don’t exist for many topics. We use a dialectic process to guide our best efforts to answer those questions and create appropriate enterprises.
Since we can’t come up with perfect solutions, we must recognize that we’re dealing with a work in progress, a process, and that process is usefully thought of as a dialectic. Thinking of it as a dialectic is useful because we anticipate arguments, prepare for arguments, and listen to the other side. We state arguments prepared to listen to the other side. We don’t just keep restating our original statements or positions. Which, to be sure, frustrates others because it sounds like we’re not listening. We listen, and respond to their arguments
We want an economic system that constructs a balance between capitalism and socialism. Economic arguments in the public square aim at developing economic laws and policies that establish and maintain this balance. Our dialectic process helps us resolve arguments and develop these laws and policies.
Now, what do we do once we have developed, adopted, and implemented these laws and policies? Live with them? Not exactly. We give them time to be fairly evaluated. How do we evaluate them?
That’s a huge question that has not been adequately answered in the public square or in our government. We are going to answer it and in doing so continue to provide intellectual leadership in the public square and in government, journalism, and universities.
We the people make laws and evaluate them in terms of their ability to achieve our morally grounded purposes. I call this process morally grounded pragmatism. But we have added not just a new concept in dialectic, but a new form of action. We create two new terms: morally grounded and pragmatic. (Well, new at least in this context.) Again, we start with the easier one.
Pragmatic, Pragmatism
We elaborate that approach, a morally grounded pragmatic dialectic, and make it more concrete in economics by acknowledging that it requires an ongoing attempt to find a balance between capitalism and socialism. Two different approaches to solving problems. Evaluate them, and see which produces the better solutions. That’s what a dialectic process does. That process is carried out in arguments. But what about once our arguments have produced laws and policies that have been implemented. Now we must evaluate laws and policies that exist. That’s where pragmatism comes in.
What is pragmatism? Google is helpful:
Pragmatism began in the united states in the 1870s. Its origins are often attributed to philosophers Charles Sanders Peirce, William James and John Dewey. In 1878, Peirce described it in his pragmatic maxim: "Consider the practical effects of the objects of your conception. Then, your conception of those effects is the whole of your conception of the object."
The practical effect of something is the concept of it. That’s a start, but it’s a bit abstruse and obtuse, difficult and annoying. Rather than getting into the whole philosophical discussion, let’s talk about what it became.
We judge a program or policy by its outcome: Did it work? Social scientists adopted pragmatism and added, “As we said it was going to work” and adopted the scientific method to measure whether it worked or not. They were being pragmatic, scientifically. We’ll get into the discussion about social science in more detail later when we have laid a foundation for it.
For now, let’s just know that what we now call social science used to be called moral philosophy. Moral philosophers (over quite a number of years) adopted the scientific method as the foundation of their inquiry, both their research and teaching, and thus became social scientists. The scientific method allowed them to establish, scientifically, whether their conclusions were reliable and valid. Reliable just means they get the same result over and over. It’s reliable. You can count on it. Valid means that they get the result that they predicted. So, we keep getting it and it is what we want. Reliable and valid.
Pragmatic. Pragmatism tells social scientists, “that’s all you need to know.” Now, let’s not be glib and underestimate the importance of the contribution that the scientific method has made to social science. It brought a new kind of disciplined inquiry to their disciplines and produced incredible advancements in their knowledge.
So what’s the problem? We know that if we do X we get Y virtually every time and Y is what we expected, what we wanted. What could be better?
Well, it might be better if we also knew that the result we get is good, that it does not do more harm than good. That it does not do any impermissible harm?
We will talk about why pragmatists rejected moral philosophy. Let’s put it this way for now: They had good reasons, but they should have fixed the problems rather than just totally rejecting moral philosophy.
See what I mean. This discussion of intellectual leadership is and will be interesting. It will be interesting and useful because it will include our developing a system of universal public moral reasoning that we can use when we implement our morally grounded pragmatic dialectic.
We can look forward to two enormous intellectual achievements. We will develop a system of public moral reasoning that we can use as a tool when faced with, when arguing about, moral questions in the public square.
And we will use that tool to make our pragmatic work overcome the major flaw of pragmatism: It is incapable of moral reasoning because it does not just ignore it; it rejects it.
Before we turn to those other major topics, I think it’s important to deal with a topic we have skipped. As I mentioned earlier, this blog is based on my book, Let’s Get Civil: Healing Our Fractured Body Politic.
I started this blog with a discussion of economic justice in an attempt to demonstrate, convince the reader, that intellectual work is valuable and practical.
However, that’s not how I started that book. I started it by introducing an argument to replace individualism with universal moral reasoning in the public square. The meat of that argument came much later in the book, but I got it started right from the get go.
Since it is so important to everything we do, and since it is not at all obvious to most readers that universal moral reasoning has a vital role to play along with individualism, I’m going to present the whole argument in the next episode.
This Entire Blog Is Based on My Book Let’s Get Civil: Healing Our Fractured Body Politic. Some readers may want to order it from Amazon. Be sure to use my full name: Patrick Conroy, not Pat Conroy.
Website: Intellectual Leadership in the Public Square.
Email: Patconroy317@Gmail.com
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I will post episodes on Thursdays.