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james scott and austrian economics

Brayden

Brad DeLong provides a masterly review of James Scott’s (1998) book, Seeing Like a State. Scott, the political scientist/anthropologist is required reading for most graduate students taking a course in political sociology. In fact, in my first year as a Master’s student I read his excellent The Moral Economy of the Peasant. My first year as a PhD student I read Seeing Like a State in a state and policy course. So Scott figured prominently in my early graduate education. Yet, through all of the discussions we had of Scott, I can’t remember anyone bringing up the similarity of Scott’s argument to those of the Austrian economists. DeLong makes it apparent why we should have made this connection.

No one can finish reading Scott without believing–as Austrians have argued for three-quarters of a century–that centrally-planned social-engineering is not an appropriate mechanism for building a better society.

But on a second level, it is an act of displacement. Friedrich Hayek, after all, won the Nobel Prize in Economic Science for making many of Scott’s key arguments: that the bureaucratic planner with a map does not know best, and can not move humans and their lives around the territory as if on a chessboard to create utopia; that the local, practical knowledge possessed by the person-on-the-spot is important; that the locus of decision-making must remain with those who have the craft to understand the situation; that any system that functions at all must create and maintain a space for those on the spot to use their local, practical knowledge (even if the hierarchs of the system pretend not to notice this flexibility). These key arguments are well known: they are the core of the Austrian economists’ critique of central planning….

The key fault of what Scott calls “high modernism” is its belief that details don’t matter–that planners decree from on high, people obey, and utopia results. Note that Scott’s conclusion is not just that attempts at high-modernist centrally-planned social-engineering have failed. It is–as von Mises argued 70 years ago–they are always overwhelmingly likely to fail.

Sociology students love this book, and yet for the most part they despise or simply refuse to listen to Hayek and the other Austrians. Why? DeLong offers that while Scott clearly saw the problems with centralized coordination, he also felt that as many problems existed with “market driven standardization.” Perhaps what Scott fears (although it’s not clear to me) is that turning over all control to the market is de facto giving powers of control to another centralized source of planning – the corporation. The latter could be just as devastating a force as the utopian statists.

My sense is that although Scott and most sociologists who love this book may share with the Austrians a distrust of the state, their dividing interests are rooted in their distinct views of the market. Scott does not see the market as a viable solution to centralized planning. It’s just centralization in another organizational form. So what is the solution if it’s neither market nor state? Scott and the other folks on the left are much more likely to embrace community-minded control and planning. Community planning prioritizes the “metis,” or local knowledge and practices, that enables more personalized and context-sensitive problem solving. Local action and practical skills are valued over standardized formulas or routines as a means to accomplishing ends. In this sense, I think Scott has much more in common with organizational scholars like Paul Adler, who see “communities of practice” as more capable of managing knowledge than centralized hierarchies. Like Powell’s “network forms of organization,” communities of practice value trust over prices or routines, and it is trust that enables detailed coordination in knowledge-sensitive domains. Given Scott’s fear that the state is destroying this local knowledge through attempts to standardize everything, a potentially viable solution would be to give communities more self-governance and decentralize planning in both states and corporations.

In sum, the difference between Scott and the Austrians has more to do with the solution than with the problem. Both sides can agree that the state stinks, but they certainly don’t agree about the best ways to decentralize.

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Written by brayden king

October 25, 2007 at 4:12 pm

22 Responses

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  1. I agree that Hayek should be taught in social theory: he’s the Marx of the right. But it’s not true to say that no-one has made this connection. For instance, Andrew Levine’s review of Scott’s book in Contemporary Sociology says, “There may indeed be an affinity between, say, the mentality that imposes standardized weights and measures and, say, the Great Leap Forward. But there is no slippery slope that leads from the one to the other. Scott’s own richly textured and historically sensitive accounts of the failures of the social engineering schemes he investigates could be invoked in support of this contention, despite the lessons Scott himself draws from his own evidence. So, too, could the work of other critics of rationalism in politics and defenders of local knowledge — Friedrich von Hayek, for example, or Michael Oakeshott or even Alexis de Tocqueville. It is ironic that Scott, whose sympathies are evidently closer to those of the “utopians” he derides than they are to these conservative theorists, advances views that accord with the philosophical judgements they endorse. But it is instructive to observe that none of these writers oppose states as such, and that they all have compelling reasons for differentiating the statism they support from the politics they denounce.”

    That latter point, by the by, also applies to Brad — he knows the benefits of free markets, but he’s also — as he would say himself — a technocrat, not an anarcho-capitalist.

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    Kieran

    October 25, 2007 at 5:06 pm

  2. just came across this interesting post; even though I am not into the book “Seeing it like a state” the kind of trust that Brayden speaks about could be specified a bit more, especially with regard to the complicated relationship between trust and control. From the neoinstitutional context it sounds Brayden is talking about trust based on routine – unproblematic, commonly shared social reality so that trust is a natural attitude – not systems trust that grows because I am confronted with the abstract functionality of an autopoietic system (e.g. politics) that is indifferent toward me and my actions, right? Or am I wrong and you mean another kind of trust?

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    Tina

    October 25, 2007 at 5:34 pm

  3. Aren’t constitutionnal democracies and civil liberties an easy solution to the problem ?

    One thing that strikes me in the Lenin, Nyerere or Mao quotes is how they openly say that they’re about to go on with their actions DESPITE what the people want. The idea that the social engineers know better.

    Doesn’t the obligation to convince the people force the engineer to take the people’s wants, desires, capabilities into consideration ?

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    Random African

    October 25, 2007 at 5:34 pm

  4. I missed the word “but” in my first sentence, but I do hope you understand my question on what the type of trust in the context of trust and the state :-)

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    Tina

    October 25, 2007 at 5:38 pm

  5. brayden,
    i think the distinction between scott and hayek can be summed up as “polanyi.” in /great transformation/ he argued that classic liberalism is the true central planning in that it imposes a single principle on society and obliterates local knowledge and the loose coupling that buffers us from change. basically, to scott and polanyi, local knowledge is embedded in customs and laws, whereas to hayek it’s in market prices.

    kieran,
    i agree that hayek is the marx of the right and i think this not just because of the influence of his ideas but for his broader totemic function. for instance, somewhere or other he wrote something about how social change should be slow so as to avoid throwing out the baby with the bathwater. this theme is much more central to edmund burke, but occasionally on the blogosphere you hear people talk about, for instance, “the hayekian argument against gay marriage” which is more accurately called “the burkean argument” but they only have room for one intellectual and assign him an omnibus function.

    random african,
    i guess that makes bryan caplan the lenin of market liberalism.

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    gabrielrossman

    October 25, 2007 at 5:47 pm

  6. ahahah.. is he ?
    does he deduct that voting, parliments, public debate should be suppressed because of the voter’s bias ?

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    Random African

    October 25, 2007 at 6:15 pm

  7. Random African – there really is no easy solution. The problems with states, in Scott’s view, is that they are designed to standardize and control, even the good, democratic kinds.

    Kieran – thanks for pulling up the quote from the review. It’s nice to see the connection was made early on.

    Tina – I’m not sure that either kind of trust you describe is the kind that Adler is talking about. Go look at the article. I think he’s conceptualizing trust as a characteristic of personal relations that are grounded in local knowledge. I’d say it’s the polar opposite of the kind of norms that neoinstitutionalists describe, although I could just be misunderstanding your question.

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    brayden

    October 25, 2007 at 6:34 pm

  8. I’m not convinced, Kieran and Brayden, that Hayak is the Marx of the right. I think perhaps he’s the Marx of the internet-right – that is, that special brand of free-market libertarian who likes to claim that sure, markets are potentially bad but better bureaucrats would make it so much better and, of course, it’s so much better than centralized state planning.

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    Peter

    October 26, 2007 at 1:07 am

  9. I think the contrast between Hayek and the “communities of practice” folk can be a bit overstated. With Hayek (as with Marx) you have to differentiate between the ideological Hayek that most “libertarians” trot out (mostly Roads to Serfdom Hayek) and the”theoretical” Hayek of the more obscure articles in Economica and AER. This Hayek (emphasizing local knowledge embodied in institutions and the entrepreneur, such as 1945) is perfectly compatible with any other “left” argument about the importance of decentralized community organizations. So the left/right contrast does not work in this case, (and is misleading) since it requires that you interpret Hayek as a rampant individualist who ignores the role of more local forms of organization. In fact, it can be said that for Hayek the market is precisely the ultimate “community of practice” so that he explodes Tonnies’ old market/community dichotomy.

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    Omar

    October 26, 2007 at 11:59 am

  10. Omar: The central question – setting aside the politics of it all – is where one starts the analysis. Hayek clearly starts with the individual-level (e.g., see Hayek’s 1943 Economica piece for a clear exposition) and then builds from there, while a CoP-approach seems to explicitly start at the collective (or even higher, cultural) level. It seems to be a rather fundamental theoretical/methodological question and debate – two competing ‘first principles’ (its the old: can we start with individual preferences or does culture/community determine those as well – and, don’t tell me that ‘structuration’ solves this ;).

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    tf

    October 26, 2007 at 2:57 pm

  11. I agree with Omar that you don’t have to reject the “communities of practice” idea to embrace Hayek’s view of decentralization. In Hayek’s 1949 AER piece he’s talking about a very different sort of knowledge than the kind that Adler et al. discuss. For Hayek, in that particular paper, the issue was how to satisfy individual preferences that are particular to time and place. He’s not really describing a production process in the same sense that Adler is – a process that inevitably requires close coordination that would prices would clumsily coordinate (call the clumsiness transaction costs if it makes you feel better). The point is that decentralization works in both cases, according to the respective theorists, and you don’t have to disagree with one to agree with the other.

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    brayden

    October 26, 2007 at 4:27 pm

  12. Brayden: Was that a response to my comment/question to Omar?

    So, are we talking about two different things, Hayek about markets and CoP about orgs and knowledge production?

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    tf

    October 26, 2007 at 4:39 pm

  13. Yep, it was a reaction to your comment. And yes, my general point is just that it’s not an either/or dichotomy. I think you could actually embrace Hayek’s view of the market and still see decentralization in the workplace as a good thing. However, because politics will play into this, the left is much less likely to embrace the market view that Hayek proposes and the right is not going to be thrilled with Adler’s critical view of management. But logically, as Omar says, the two views could be complementary.

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    brayden

    October 26, 2007 at 5:31 pm

  14. Well, this is probably not worth belaboring – but at least some of the extant conceptualizations of CoP would not seem to allow for the type of complementarity that you suggest, but, perhaps there is some middle-ground/consensus-building-type of work then to be done (though, you may be right that there is a hesitancy to grab that middle ground given the polarities – a similar gap exists between institutional work in econ and soc).

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    tf

    October 26, 2007 at 6:19 pm

  15. Teppo, you are seriously addicted to metatheory! The anti-Comtean “scientism and the study…” papers are fine, and show Hayek at his polemicist best, but they remain tied to mostly pre-theoretical (i.e. meta) abstractions (they do work as a superb “sociology of knowledge” of early French sociology though). I think the “knowledge” papers are truly the best ones because they are the ones that have the most concrete implications for how we understand markets as institutions, and there you can really see that if you are going to read Hayek as a “methodological individualist” it is going to have to be as a “structural” methodological individualist (in Udehn’s 2001 lingo) at the very least, so I would say that in his account of how markets work, Hayek starts with historical individuals and institutions (even if these conceived as embodied in the cognitive equipment of really existing individuals) not with some abstraction of “the individual.”

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    Omar

    October 27, 2007 at 3:31 am

  16. Me? Metatheory? No.

    Well, this issue will have to come up again, perhaps I’ll slide in a post soon with a more systematic exposition of some of the theoretical metatheoretical issues at stake.

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    tf

    October 27, 2007 at 4:44 am

  17. My guess would be more that most people are more comfortable with anti-economic thinking. We evolved as a social species that had to negotiate a social milieu. Economy of the sort that results in true economy behavior did not develop until just a few thousand years ago, and it spread rather slowly. Economies have emergent properties — Adam Smith’s “Invisible Hand” — and it is only recently that we became fully, scientifically aware of such phenomena. So we should not be surprised that most people are anti-economic thinkers, as economic thinking is often counter-intuitive to a social, tribalist species such as ourselves.

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    Troy Camplin

    October 29, 2007 at 2:06 am

  18. Murray N. Rothbard was actually called “the Karl Marx of the right.”

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    Bill Stepp

    October 29, 2007 at 2:26 am

  19. Troy: funny, if you hear the usual complaints of those of us who are entrusted with teaching sociology in the United States it is precisely the oppossite: individualism, self-interest and thinking of outcomes as a result of individual choices and preferences are highly intuitive to the average undergrad. Try explaining to them that social context has a hand in driving their behavior and you’ll get the most puzzled looks you’ve ever seen (maybe it is the part of choice under constraints that they find hard to understand?). So we are not surprised that most people that come from an individualist culture are such anti-sociological thinkers, as sociological thinking is often counter-intuitive to an individualist species such as Homo Americanus.

    Of course, it could just as well be that each discipline gets an ego-kick from thinking of their subject matter as “counter-intuitive” (thank you quantum physics!).

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    Omar

    October 29, 2007 at 11:42 am

  20. I htink you’re right that it’s the idea of choice under constraints that is what they find hard to understand. That stems from a misunderstanding of freedom as anarchy, when both of us know that it is good rules that give us degrees of freedom (think chess). The kind of social thinking I am talking about, though, is a primitive kind that goes back to our having evolved as a tribalist species. What is typically taught in sociology involves complex emergent institutions which also have an “invisible hand” that guides us. So my guess is that students have difficulty intuiting either model of the complex system we live in precsiely because we are the parts trying to understand the whole.(Consider this thought experiment: if amino acids were conscious, what would they think of studying “the cell”?) Perhaps I should expand my proposed work to include sociology.

    On the other hand, I teach interdisciplinary studies, and between what was really a very simple article on economics and a more complex article on sociology, most of the students claimed to understand the sociology article much better than they did the economics article.

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    Troy Camplin

    October 29, 2007 at 2:27 pm

  21. Excellent post. I feel like I never have enough time to broaden my core reading. Thanks for the great pointer.

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    Richard Pointer

    October 30, 2007 at 2:05 am

  22. “The problems with states, in Scott’s view, is that they are designed to standardize and control, even the good, democratic kinds”

    Yet his more convincing examples seem to come from bad, undemocratic kinds, don’t they ?

    Like

    Random African

    November 1, 2007 at 6:19 pm


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