The Road To Serfdom and The Collective Aversion To Sophisticated Regulation

I found it ironic, immediately after describing the pre-post fallacy and the tendency to misunderstand sophisticated arguments for fundamentalist ones, you suggest that those who have "a collective aversion to sophisticated reform" are projecting a pathological psychological shadow.

That is a handy use of the pre-post fallacy. By acknowledging the value of a position, then defining it as "extreme," you can relegate/categorize anyone that values this line of thinking as a fundamentalist. Agrees with me about what "sophisticated" means = sophisticated. Disagrees with me = fundamentalist. Nice!

It is true that most free-market/libertarians are not second tier, and do not have the rhetoric to deal with an integral critique. However, their fundamental intuitions integrate what Thomas Sowell described as a "constrained vision" of human nature which is absolutely essential and radically integral. In contrast, many (so-called) integral thinkers have marginalized this common sense understanding of human nature and choose an "unconstrained vision" of human nature that leads them to value authoritarian solutions.

In The Road To Serfdom (If the reader has not read it, I suggest that it really is required reading to be an ongoing serious part of this conversation. Plus it is fun and provocative!), Hayek describes the predictable psychological/human responses to failed legislation. His analysis has shown itself to be accurate, with most of the 20th century acting as an exclamation point as the end of the book.

To summarize the key points:
1) Attempts to control markets universally fail, because
1a) we do not even begin to understand markets (i.e., millions of individuals making decisions based on their unique values) well enough to regulate them effectively. Hence our actions unbalance the market ecology and 99.9% of the time create negative unintended (secondary) consequences;
1b) Normal politics, lobbying, and regulatory capture lead to politically palatable regulations, rather than our best (insufficient/tentative) knowledge in any case.
1c) Markets (individuals) are flexible and legislation (bureaucrats) is not. Black markets always, without exception, come into existence whenever we try to regulate something out of existence. Water finds its own level. This is especially true in times of technological innovation, where the market increasingly creates entirely novel ways of avoiding the intended regulatory effects.

2) Once we have interfered in a market, we are morally responsible to fix the problems we have created.
2a) Since we really don't know how to fix it, but we HAVE to fix it, we put the legislator/leader in a double bind. We don't know what to do. We have to do something. So, we do, and create negative secondary consequences that further imbalance the system
2b) The political pressures on elected officials in the face of these double-binds SELECTS for increasingly authoritarian leaders. Cautious rhetoric is too timid to gain popular support, and politically ineffective when it comes to the realpolitck required to make their policies happen. Those leaders who are cautious become unelectable, and those leaders who are bold and authoritarian gravitate into positions of power. encHe
2c) this leads to more radical changes, which are less able to adapt to the market, and more likely the cause systematic destabilization.
2d) this leads to a greater demand for sweeping and radical action on the part of the legislators and regulators. (This is the result we are facing in our current financial, healthcare, social security crisis. I look forward to a part two to hear what you have to say about that.)

Summary: This cycle between 1) our inability to successfully regulate markets, and 2) the selection pressures on regulators to become more authoritarian - It does not create an environment for integral solutions.

I submit that a healthy aversion to this process might be WholeSum intelligence rather than pathological projection of unresolved psychological shadow issues. :-)

In fact, even when I agree with many of the regulatory ideas proposed to address the painful realities of globalization, I will (and do) bet money that the legislation that is created to enact those regulations will fundamentally miss the point and create far more problems than they solve.

That said:
I look forward to seeing how you address the all-important gap between
- the intention of policies (even when they are reasonable and take into account market principles pre-post - 90/10 rule), and
- the sausage that comes out of the legislative/political process and its snowball negative effects (99.9% rule).

Mark