The Classical Liberal Bias at the Technological Frontier

With the so-called return of great power security competition to the Western agenda, the question of the liberal bias has reemerged. Branko Milanovic made the provocative suggestion that authoritarian states can be expected to ‘outperform societies where the social sphere is organized in a democratic fashion‘. On Twitter, I quipped in response that no authoritarian state has ever pushed the technological frontier. I immediately got a rap from Adam Tooze, who was ‘surprised’ that I wouldn’t consider the Soviets achievement in the military technical frontier at midcentury. I clarified my position on the Soviet-German struggle in the previous dispatch. In what follows we’ll take on the issue frontally.

As I have mentioned before, the liberal-democratic discourse is basically a discourse of Western self-congratulation. More interestingly, it is the language of the Western alliance. Negotiations and compromises are made easier in the US bloc because they are couched in the Lockean discourse. It is the thick blanket of discourse that hides the racialized super-alliance of the offshore Anglo-Saxon countries that constitute the hard core of America’s Delian league. For more on that see Vucetic.

The liberal bias is usually framed in terms of the economics of institutions. In Acemoglu and Robinson’s now-classic framing in Why Nations Fail, the interaction between the concentration of economic and political power is mutually-reinforcing. I buy that predatory political systems reinforce economic concentration and vice-versa. And that the multiplicity of private centers of power works against the concentration of political power and vice-versa. This is a plausible mechanism that can account for the evidence we shall examine presently. But I believe there are deeper reasons why there might be a liberal bias. These have to do with the nature of the human capacity and the nature of the innovation process.

The human universal discovered by Boas was later put on a scientific basis by Noam Chomsky. The fundamental human capacity for creativity is based on the capacity for generative grammar — the ability to construct a countable infinity of structured sentences from a finite lexicon, a fundamentally zero-one proposition — that is exclusive to our species and uniform across it. The language capacity forms the very structure of our thoughts. It is why we dream, fantasize, imagine, and pray. In short, it the very biological basis for innovation.

But merely wetware isn’t enough. In order to understand the innovation process we must pay closer attention to the nature of problem solving. What decides whether you are at the technological frontier is whether there is someone out there that has the answer to the problem you want to solve. If there is someone out there who already knows the solution, then you are strictly within the frontier. Otherwise you are on it. Congratulations. Now, how do you solve a problem no one has solved before?

Innovation emerges from what Matthew Crawford calls ‘ecologies of attention’. Think of motorcycle mechanics brainstorming about how to fix a bike. To have any hope of fixing it they must figure out what is wrong with the machine. People struggling to solve a problem scheme with those around them (and tap their extended networks). With lots of people struggling with the same problem, ecologies of attention emerge spontaneously that show up in the archives formally as professional associations, research agendas in scholarship, and various assorted institutions whereby people with similar interests try to connect with each other. The point is, we can go much further if we have access to the private information trapped in other minds that Hayek claimed was beyond the surveillance capabilities of planners.

Solutions and new paradigms emerge from generative interactions in such ecologies of attention. Sometimes this can take spectacular forms, such as the extraordinary Solvay Conference of 1927. But most innovation is undoubtedly more mundane; usually leading to no more fuss than drinks at the bar to celebrate the triumph.

Popper emphasized the radical uncertainty of scientific discovery. We may extend that observation to the technological frontier. Here’s another way you can tell you are at the frontier: If you cannot tell if the problem is solvable or how long it would take to solve it, there is a good chance that you are working at the frontier.

David Deutsch, following Popper, posited that free inquiry was the most important precondition for innovation. The closer you are to the frontier, the higher the premium for freedom from coercion and meddling. This is the classical liberal bias. Ecologies of attention flourish when people can associate freely and largely without coercion and meddling from above. It is no coincidence that mathematics was where the Communist bloc truly excellent. Here they had full freedom of thought. No doubt the most attractive feature of the department at Moscow State, the shelter offered by the sheer opacity of advanced mathematics was unfortunately in short supply elsewhere in Soviet scholarship; which predictably suffered, most obviously in the exodus of dissidents to the West.

In this reading, firms succeed when they foster situated communities of knowhow; at any rate when they serve as containers of situated communities of skilled work that enjoy significant autonomy from owners and CEOs. This may be why the Chandlerian firms of the 1960s had such high rates of productivity growth. And this was even true inside the Soviet Union. Whence the importance of the shadow in the ‘command-shadow’ economy.

So there are good reasons to believe that free inquiry is crucial to innovation. But free inquiry is not automatically related to democracy. What really matters are local institutions that bear heavily on situated communities rather than the existence of free and fair elections. More formally, what matters are micro-local institutions. For instance, India may have free and fair elections but micro-locally it is an authoritarian society. Formally, local government is quasi-military: the district is run by the District Magistrate and the Superintendent of Police who answer directly to distant political authority in the state capital. The rule of law is observed on paper not so much in practice. Societal discipline in the form of the inescapable identity silos of caste and religion further constrain the possibilities of free inquiry and association. The result, for the nation that has been hailed as the world’s largest democracy, has been arrested development.

So we have a plausible mechanism of the innovation process at the frontier and the micro-local institutional foundations on which it is based. What is the empirical evidence for this?

As it turns out, the evidence for the classical liberal bias is even stronger than for the Heliocentric hypothesis. What needs to be explained is the polarization of the world:

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The rule of law is a coarse measure of the liberalism of micro-local institutions that we are really interested in. But it is finer than a democracy dummy or the freedom of doing business index. The next figure displays the percentile ranks of national scores for rule of law. Observe the striking congruence between the two maps.

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Indeed, we find that the rule of law variable trumps thermal burdens, phylogeny, postcolonial status, and settler colonial status. While the settler premium is not significant, there is a significant effect for postcolonial status (the next map displays the former colonies) but it is simply dwarfed by the fixed effect of the rule of law.

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The rule of law emerges as the dominant variable that controls global polarization. We have suggested why this may be so. Lest I be misunderstood, let me spell out the gap between my position and that of the freedom mongers. When libertarians and other worshipers at the altar of capitalism praise freedom they mean the economic freedom of entrepreneurs and businessmen. I think there may be something to it (in as much as extrinsic and pecuniary incentives matter at the margins) but that is a decidedly secondary story. The real issue is free inquiry; not the economic freedom of capitalism. All original thinkers, all innovators, are motivated more by Chomskian curiosity and the autotelic rewards of the challenge itself than expectations of pecuniary rewards. The crucial institutional precondition for vibrant situated communities of knowhow to emerge is that they enjoy autonomy and freedom of inquiry. The negative dictum — leave them do their thing — applies just as well to CEOs and shareholders as political elites and bureaucrats. Paperwork is the enemy.

In Chomsky’s long-term vision, the main question is how to organize society to maximize the human capacity, the creative freedom of individuals from private and public concentrations of power. To that agenda we may add the corollary: The crucial challenge for social democracy is how to foster vibrant ecologies of attention under conditions of security and autonomy. For it is not alone that innovators innovate. We need each other to think better.

We should not abandon the discoveries of the late eighteenth century just because the language has been cannibalized by power. The three central threads of the Enlightenment — the search for a rational order, the commitment to political liberty, and the commitment to free inquiry — pull in different directions. We may compromise on the first two, but on the last there cannot be any compromise.

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