For some things Harvard suffices; this blog is for the rest.

How to Learn From What Didn’t Happen

Essays of the “how to think” variety are generally not particularly useful because there exists no algorithm for arriving at the truth. However, there do exist many valuable heuristics that can help one sidestep major errors.

One such rule was expressed by Charlie Munger:

I never allow myself to hold an opinion on anything that I don’t know the other side’s argument better than they do.

This is a wise principle, but there are certain cases where it’s difficult to apply it because no other side seems to exist. I’m referring to ideas that are so ingrained in our culture and their detractors so long-dead that questioning them doesn’t come to mind. They form our Zeitgeist, representing often implicit and unrecognized axioms of our worldviews.

This leads to a a problem: If you don’t realize you make a specific assumption, you can’t question it and therefore can’t apply your rational faculties including Munger’s heuristic.

In my opinion, the best strategy for overcoming this epistemological conundrum is to broaden one’s perspective by reading old books. It’s mainly through the perspectives of others that you can recognize the assumptions and ideas that make up your own worldview, which is the first step towards questioning them.

Some claim to travel to encounter these different viewpoints, but like Chesterton I’m skeptical:

If we were to-morrow morning snowed up in the street in which we live, we should step suddenly into a much larger and much wilder world than we have ever known. And it is the whole effort of the typically modern person to escape from the street in which he lives. First he invents modern hygiene and goes to Margate. Then he invents modern culture and goes to Florence. Then he invents modern imperialism and goes to Timbuctoo. He goes to the fantastic borders of the earth. He pretends to shoot tigers. He almost rides on a camel. And in all this he is still essentially fleeing from the street in which he was born; and of this flight he is always ready with his own explanation. He says he is fleeing from his street because it is dull; he is lying. He is really fleeing from his street because it is a great deal too exciting. It is exciting because it is exacting; it is exacting because it is alive. He can visit Venice because to him the Venetians are only Venetians; the people in his own street are men. He can stare at the Chinese because for him the Chinese are a passive thing to be stared at; if he stares at the old lady in the next garden, she becomes active. He is forced to flee, in short, from the too stimulating society of his equals—of free men, perverse, personal, deliberately different from himself. The street in Brixton is too glowing and overpowering. He has to soothe and quiet himself among tigers and vultures, camels and crocodiles. These creatures are indeed very different from himself. But they do not put their shape or colour or custom into a decisive intellectual competition with his own. They do not seek to destroy his principles and assert their own; the stranger monsters of the suburban street do seek to do this.

In our era of pervasive globalization and the internet, it would be difficult to find a different perspective via traditional travel even if one tried, so I recommend time travel (old books). The past is a foreign country, as they say.

Munger’s heuristic has an additional loophole that might be called temporal myopia: you may know the contemporary arguments in favor and against something, but not the historical ones. This becomes particularly salient when one side has won completely and had their ideas implemented. Proponents are unlikely to acknowledge when outcomes diverge from their predictions, especially when their critics turn out to be correct. To make matters worse, these critics may no longer have an influential intellectual tradition to challenge the narrative. The winners write history, even in intellectual matters.

Many people are attuned to paying attention to unintended consequences, especially in economics (Hazlitt’s Economics in One Lesson comes to mind), but the flip side is often overlooked even though it can be more interesting as I recently noted on Twitter/X: Unintended but realized outcomes are less insightful than intended but unrealized outcomes.

Albert Hirschman highlights this notable blind spot in the context of capitalism in his book The Passion and the Interests, subtitled “Arguments in favor of capitalism before its triumph”. Contrary to current libertarian thought, early proponents of capitalism seldom discussed efficiency. Hirschman reveals that the discourse mainly centered around the psychological and even moral impacts of capitalism, positing that economic pursuits could temper other human passions. Interestingly, this restriction of other human passions is put forward today by critics rather than supporters of capitalism.

One of the many famous thinkers Hischman quotes is Montesquieu who predicts in his 1748 treatise The Spirit of Law that expanding capitalism and the use of bills of exchange will have positive political consequences:

… and through this means commerce could elude violence, and maintain itself everywhere; for the richest trader had only invisible wealth which could be sent everywhere without leaving any trace…. In this manner we owe … to the avarice of rulers the establishment of a contrivance which somehow lifts commerce right out of their grip.
Since that time, the rulers have been compelled to govern with greater wisdom than they themselves might have intended; for, owing to these events, the great and sudden arbitrary actions of the sovereign (les grands coups d’autorité) have been proven to be ineffective and … only good government brings prosperity [to the prince].
We have begun to recover from Machiavellianism, and will continue doing so day after day. Greater moderation is needed in state councils. What used to be called coup d’état would today be nothing but imprudence, quite apart from the horror such actions inspire.

James Steuart agreed, writing on the supposed restrictive effect of capitalism on the prince:

Trade and industry … owed their establishment to the ambition of princes … principally with a view to enrich themselves, and thereby to become formidable to their neighbours. But they did not discover, until experience taught them, that the wealth they drew from such fountains was but the overflowing of the spring; and that an opulent, bold, and spirited people, having the fund of the prince’s wealth in their own hands, have it also in their own power, when it becomes strongly their inclination, to shake off his authority. The consequence of this change has been the introduction of a more mild, and a more regular plan of administration.

Contrary to what Steuart and Montesquieu envisioned for the future, the following centuries are hardly known for “a more mild, and a more regular plan of administration.” In other words, the intended consequence didn’t manifest. The development of exchange bills and the resulting fluidity of capital were not enough to rein in state power; rather, the state gradually monopolized the banking system and the exchange bill creation, thereby increasing its power. Today, there exists not even the mild restriction that the state must levy taxes for its expenditures since it has become possible (and strangely enough acceptable) to simply print the money. Taxation through inflation was something Steuart and Montesquieu didn’t foresee.

Interestingly, Bitcoin enthusiasts are reviving the very arguments that Steuart and Montesquieu posited in the 18th century. One can only hope that their intended consequences will be realized this time.

Another example of intended but unrealized consequences can be found in the defense of Democracy by Walt Whitman against Thomas Carlyle, which I first encountered at Unqualified Reservations. The winning side in this debate is not difficult to identify which is why the scales of historical recognition tip decidedly in Whitman’s favor. History is rarely kind to the losing side.

The difference between Whitman’s fame and Carlyle’s obscurity is especially revealing given that Whitman himself highlighted Carlyle’s foundational role in British thought, describing the British intellectual landscape devoid of Carlyle as akin to “an army with no artillery.”

Whitman had less sympathy for Carlyle’s stance on democracy:

All that is comprehended under the terms republicanism and democracy were distasteful to [Carlyle] from the first, and as he grew older they became hateful and contemptible. For an undoubtedly candid and penetrating faculty such as his, the bearings he persistently ignored were marvellous.
For instance, the promise, nay certainty of the democratic principle, to each and every State of the current world, not so much of helping it to perfect legislators and executives, but as the only effectual method for surely, however slowly, training people on a large scale toward voluntarily ruling and managing themselves (the ultimate aim of political and all other development)—to gradually reduce the fact of governing to its minimum, and to subject all its staffs and their doings to the telescopes and microscopes of committees and parties—and greatest of all, to afford (not stagnation and obedient content, which went well enough with the feudalism and ecclesiasticism of the antique and medieval world, but) a vast and sane and recurrent ebb and tide action for those floods of the great deep that have henceforth palpably burst forever their old bounds—seem never to have entered Carlyle’s thought.

The certitudes expressed by Walt Whitman in 1881 appear far less incontrovertible in 2023. One is forced to wonder when this training of “people on a large scale toward voluntarily ruling and managing themselves [...] to gradually reduce the fact of governing to its minimum,” will begin. We can only hope it’s sooner rather than later.

The incomplete realization of both Whitman’s democratic vision and Montesquieu’s capitalist ideals should not be mistaken as refutations of the respective systems. Instead, these are instructive examples highlighting the difficulty of following Munger’s advice. As noted, this task is further complicated in scenarios where the winning side changes its arguments – and occasionally even those of its counterpart – post hoc. But it’s exactly in these cases that examining the “intended but unrealized” becomes imperative and fruitful. In short, go read old books.