Shadow Universals

I think we should strive towards justice and critical thinking. Our Founding Fathers constitutionally put a judicial branch into government because they knew that people were quick to judge based on sensationalized facts. From a philosophical perspective there is quite an interesting dynamic between universal judgments as Kant recognized and particular cases which, all too often, are not obvious but dubious and uncertain, the macro and the micro, the one and the many. The existential dilemma is the in-between where we live and breathe and have our being. Post-modernism is replete with those that awaken the ancient Greek Skeptics1 and Cynics2 refrain from their Platonic and Aristotelian counterparts. The perennial themes that Leibniz first observed3 are replayed countless times by those that must act and react to the play of universal and particular as a singularity. Judgments are not optional as we must act and align our universals (or denials of them) in meaning-bestowing ways. Let’s take an example in the Austrian School of Economics.

The Austrian Economic School’s retreat into the micro-economic serves a macro-economic goal, a universal ideology that sustains itself vis-à-vis Menger’s causal realism4 and Rothbard’s chaos theory of economics5 which results in a spontaneous order of self-organization for Hayek6. Their criticism of neo-classic, macro-economic models deny these schools legitimacy based on their imagined universal orders that result in central planning. The Austrian model is based on an absolute freedom from idealized ‘economic theories’ and the assumption that entrepreneurship driven by free-market price competition in a spontaneous order, a bottom up, Darwinian styled, self organization that resists history and a priori narrative. Market equilibrium7 is denied as any long term market dynamic. Market predictability and manipulation are discredited as the outdated, neo-classic idealization in both neo-classic capitalism and Marxism. While it appears that this school would distance itself at times from post-modernism and some of post modernity’s initial affinity with certain liberal arts schools of Marxism, it shares a similar distrust of what Derrida calls “logocentrism” in deconstruction. It prefers localization to ‘universalization’. However, a certain purity of discord is attributed to entrepreneurial competition that may have a hard time explaining collusion.

Even if we take the bottom up approach to market dynamics there are dynamic differences between small-scale and large-scale entrepreneurship. Small-scale entrepreneurship is not performed in an absolute individualized vacuum but seeks market advantage not only by competition but also by partnership and strategic alliance which it largely does not yet have. Large-scale entrepreneurship already has forged those alliances and seeks to maintain the ones that further its economic goals and use its market leverage to create new economic alliances. If there is no market order that can stand over and above the market then the differences between partnership and alliance and price collusion and market monopoly could not be determined by market regulation. In effect, market ‘universalizations’, could spontaneously arise and ‘self-organize’ without restraint. Of course, the Austrian objection to this would be the ardent belief that market price competition and lassie faire capitalism as the most efficient allocation of market resources would prohibit this kind of market dynamic. For the Austrians however, this is not the case for government intervention where government tampering results in ‘malinvestment’ and over allocation of labor. Rothbard states,

The Fed essentially is a legalized monopoly counterfeiter. And the effect of the Fed increasing the money supply, or the Bank of England or any central bank, is almost the same as any counterfeiter.8

There is an apparent faith that no matter how large companies can be they would be exempt from market tampering which could only be rightfully applied to the government. It is a pre-determined absolution of free-market ‘self-organization’ and government imposed market order. The Austrian faith only works if this difference can be absolutely maintained. Here we have pin-pointed the absolute in Austrian economics. It is a faith that must think the market in terms of the individual and not the collective. Even if a large corporation were larger than the government, it would be unhindered and unfettered by its ‘private individualism’ banner which could not be claimed by the government. Could a large corporation manipulate the economy? Is that inconceivable? Could a large corporation not be the most efficient allocation of resources? Could the government make any positive contribution to market economy? Is the government always essentially defined as anti-free-market economy? How could one prove such a thing where it true especially if macro-economic measures are disqualified at the start? Paul Cantor states,

In short, the free market will always produce failures, but, unlike other economic systems, it has a built-in mechanism for correcting them. That is why the efforts of a multitude of uncoordinated market actors can produce a more rational result than any centrally planned economy can generate. Centrally planned economies inevitably produce system wide failures, whereas the free market tends toward merely local failures, which generally cancel each other out.9

Does this line of distinction really work? Are we to believe that we cannot correct failures in government? What is voting for if this is so? Why homogenize government? Don’t we have local governments as well? Cantor states that “the free market tends toward merely local failures”. I know the Austrians wholly blame the recession of 2008 on government intervention but isn’t the impunity of the free-market from any blame whatsoever a step away from realism and towards the ideal?

In Austrian economics, the metaphysic of the individual must be maintained over and against the collective as a way to purge the market of impurity but the individual never exists in some metaphysical, ontological, hermetic isolation. Groups and collectivities are formed by individuals that can counter and thwart other individuals, even other entrepreneurs, by its sheer size and this can happen in governments and private corporations. The Austrians talk a good game but their causal realism has just as many universal ideals built into it as their arch-nemesis neo-classic economics, just different universals. If causality is stretched to accommodate theories it can easily fall into the fallacy of false causality. The sign of this would be clear and artificial lines of demarcation that cannot or will not explain or justify itself. Further, any insistence that even the attempt to hold itself accountable to economic metrics rests on discounted macro-economic ideals is certainly a red flag for unfalsifiability; Popper’s notion of the difference between science and pseudoscience. History has shown universal truths, cultural myths, can be deceptively dangerous and insidious when they myopically distance themselves from any possible grounds for criticism.


1 See

2 See

3 See

4 See

5 See

6 See

7 See

8 See; page 16

9 See; Section IV

Leave a Reply