January 22, 2018

Paradigms of Social Change

Creating Better Intellectual Leader, Better Organizations, and a Better World

Emily Chamlee-Wright

Senior Affiliated Scholar

Scholars and academic entrepreneurs committed to advancing a deeper understanding of the principles and practices of a free and open society are sometimes called to lead. This may involve leadership of a collaborative research project, or an academic center, department, or institution. In accepting such a role, our responsibilities go beyond what is normally expected in an academic career. The first such responsibility, simply put, is to change the world for the better. Second, we must ensure that we lead our ventures in a manner that is in keeping with the values we seek to advance in the world. And third, if we are to be effective over the long haul, we must take responsibility for attending to our own growth and development as leaders.

In this essay, I offer three ideas that I believe to be invaluable in this triple charge — foundational ideas essential to creating better societies, better organizations, and better intellectual leaders.

The Nature of Knowledge and Importance of Epistemic Humility

I wish to begin with F. A. Hayek’s notion of the nature of knowledge in society (see Hayek 1945). Hayek observed that value-creating knowledge is fundamentally dispersed across society. Social coordination does not come about because someone in charge has a God’s-eye view of the knowledge required to sync up disparate plans. Social coordination comes about because we have a decentralized mechanism, like a system of market prices, by which we share relevant information and cooperate with one another.

This insight offers us a compass for the change we seek in the world. A free and prosperous society is one that operates not by deliberate command of the social engineer, but by general rules such as private property rights, rules of contract, and the rule of law, within which individuals can pursue their private ends voluntarily with one another without government force. And this respect for individual liberty is part of the vision of a free society.

Hayek’s insights are also relevant for running effective organizations. A cornerstone idea within market-based management (MBM), is that value-creating knowledge tends to be dispersed across the organization; not just in the heads of the organization’s leaders. The trick is to allocate decision rights and align incentives in such a way that valuable local knowledge is regularly cultivated, deployed, and shared. It would be a disservice to MBM to say that this summarizes the approach, but in my mind, and in the various leadership roles I have played, I have always found it helpful to think of MBM as “applied Hayek.”

Emily Chamlee-Wright and Virgil Storr in New Orleans for the Gulf Coast Recovery Project.

Hayek’s insights also have implications for us as intellectual leaders. If we take seriously Hayek’s cautions regarding the fatal conceit of the social engineer, it forces us to adopt a posture of deep epistemic humility — deep humility about the limitations of our own knowledge (see Hayek 1988, 1989). Armed with Hayek’s insights, we step into any decision-making environment keenly aware that the knowledge we possess is partial and incomplete. By this I do not mean that we lack confidence in our judgment or lack boldness in our actions. In fact, it’s almost the reverse. A posture of deep humility allows us to avoid the perils of arrogance. If we engage in decision-making processes with humility, we are compelled to listen deeply to those with whom we disagree, and tap the insight of those who may have specialized insight that we lack. Because we come to our decisions from a posture of humility, we emerge wise, more confident, and more likely to pursue the bolder vision.[1]

“If we engage in decision-making processes with humility, we are compelled to listen deeply to those with whom we disagree, and tap the insight of those who may have specialized insight that we lack.”

The Governing Force of the Impartial Spectator

The second foundational idea essential to leadership is Adam Smith’s concept of the “impartial spectator” (see Smith 1984 [1759]). The impartial spectator is the second self we develop as part of the maturation process. As children, we learn that it feels good when our friends give us praise and it feels bad when they attribute blame. But we also learn that receiving praise for something we did not earn feels empty, and that receiving blame for an action that was not worthy of blame feels like a kick in the gut.

When other spectators lack impartiality and pass judgment based on their own interests we learn that their judgments of what actions deserve praise or blame cannot always be trusted. That’s when we begin to develop the impartial spectator within.

Though the impartial spectator resides within us, it is not the same as us. It is the highest integrity version of ourselves, minus any self-interested partiality that would lead us toward judgment or action that lacks integrity.

The governing force of the impartial spectator is critical to the change we seek in the world, as it aligns our actions with society’s expectations of just conduct. Because we have so internalized the rules of just conduct, we tend to follow them even when no one is watching. And it is this common adherence that allows us to realize the benefits of freedom. The internalized rules of just conduct keep most of us from predating against one another, and provide the guardrails needed for the extended market order to thrive.

Emily Chamlee-Wright speaking about the importance of a cultural economy lens on the Austrian economics research program.

The impartial spectator can also help us build better organizations, by serving as a kind of moral compass. And because an organization is a collection of individuals, we are forced to articulate out loud the values that guide our actions. This is tremendously valuable, as articulating our values, writing them down, even putting them up on the wall, allows us to point to those values when making decisions, mentoring colleagues, and holding ourselves and one another accountable. It is surprisingly easy, in a values-driven organization, to make what might otherwise be really difficult decisions — not easy in the sense that there are no consequences, but easy in the sense that you know what the right decision is.

And at the level of the individual, the impartial spectator can serve as a vital source of emotional resilience. At any given point in your life, there may be few people in close proximity who share your specific values and goals, or who know the particulars of the difficult decisions you will need to make in the course of your career. Even the wise counsel from the colleagues, mentors, and friends may not be enough because they do not have the relevant local knowledge that you possess, that you need to render sound judgment. The impartial spectator, in other words, may be your only reliable advisor.

I learned this stark lesson in my early days as provost of a small college. When I came into the role, I made some changes that, to my fresh eyes, seemed obvious and those actions won the quick praise of faculty. That praise felt really good. Almost narcotic good. (I’m not kidding.) Early on, I was also faced with a difficult decision, and my judgment won the scorn of some very vocal faculty. Others agreed with my decision, but their lack of vocal support was a deafening silence. Assertions regarding my malevolent intentions and misguided judgment — especially from those who had earlier praised my vision and decisive action — felt like that kick in the gut. At the time, I fumbled to coach myself through it. “Well, did you do the right thing? Was it the right decision for the college? Yes? Then, suck it up, take the body blows and move on.” In this new role, these were my early consults with the impartial spectator.

In the years that followed, I faced countless moments when the feedback from faculty, staff, trustees, and my president toggled back and forth — praise one minute, blame the next. Over time I learned to practice a fierce discipline in which every decision was subjected to the impartial spectator’s scrutiny. If the decision, judgment, or action in question passed that test, I deliberately, respectfully, and calmly set aside the scorn that would inevitably come from some. Not in a, “Well I don’t care what they think!” sort of way; rather, in a calm and graceful, “I understand why you do not see it the way I see it. But I am confident that I have made the right call.” And it has been my experience that by remaining calm in this way, I avoided doing permanent damage to those relationships.

Even more difficult than setting aside blame unearned has been developing the discipline to set aside any thirst for praise. No joke, praise can have a narcotic effect. But like any narcotic, it can be dangerous. Addiction to praise can erode the courage it takes to choose a course that is worthy of praise. Don’t get me wrong. It’s important that we recognize and celebrate the good efforts of those who are making a positive difference in our organizations and in the world. However, if you are addicted to praise rather than fiercely committed to doing what is praiseworthy, your judgment will get cloudy.

“If you are addicted to praise rather than fiercely committed to doing what is praiseworthy, your judgment will get cloudy.”

The Principles of Non-Violence as a Paradigm for Leadership

To this point, I have discussed Hayek’s knowledge problem and Smith’s impartial spectator — ideas that are well-worn in classical liberal circles. I now want to throw you a bit of a curve ball and talk about the principles of non-violence, as the third paradigm that builds better individuals, better organizations, and a better world.

The social change we seek is based on a system of voluntary cooperation, and is therefore a positive vision of peaceful human flourishing. War is a zero-sum game. Liberty is a system of voluntary action and mutual benefit, and therefore, in keeping with the principles of non-violence. We advocate for market principles, for example, not because they put us in a better position at the expense of others, but because the market order makes everyone better off. As with all social movements based on non-violence and mutual benefit, the principles and practices of freedom emancipate the oppressed and restore the humanity of the oppressor. I have always believed appropriate, therefore, that classical liberals embrace the principles of non-violence as our own, central to our understanding of the system of mutual benefit we seek in the world. [2]

But what do the principles of non-violence have to say for how we run our organizations and how we act as agents of social change? Obviously, we do not use physical force to achieve our goals, but a principled commitment to non-violence goes deeper than that. A commitment to non-violence is grounded philosophically in recognizing the inherent dignity within ourselves and our fellow human beings.

Emily Chamlee-Wright and Virgil Storr talking with New Orleans resident in the aftermath of Hurricane Katrina.

If we are to realize the social change we seek, it will come by way of persuading others that ours is a positive vision of human flourishing. We will not succeed if we dehumanize, demean, and disparage those who disagree with us.

“We will not succeed if we dehumanize, demean, and disparage those who disagree with us.”

The change we seek requires that we hold to an extraordinarily high standard of civil engagement, because it follows from the principle of human dignity. Confront bad ideas, yes…head on, with the full force of your intellect, but do so without dehumanizing those who hold them. I’m not saying that this is easy. In fact, if you adopt these principles, I can guarantee you that they will, at times, put you at a tactical disadvantage. Not everyone plays by these rules. And it can be tempting to join the camaraderie of tribal affiliation and disparage our intellectual opponents. I implore you: do not give in to this temptation.

Instead, every time an opponent demeans or disparages the intellectual tradition you represent, every time an opponent lets an insult stand in for the hard work of building a better argument, we have to remember that there are other people watching to see what we will do. Some of those people have yet to make up their minds on the question under consideration. If we resort to insults, we give up the opportunity to make an argument and to change minds. Our argument may never convince our opponent, but it may convince the bystanders. And even if they are not convinced, the bystanders will take note that we treated our opponent with respect. At the end of the exchange, we will be the ones those bystanders will want to talk to and carry on the conversation.

The Necessity of Personal Development

Let me close by saying that of the three responsibilities you have as an intellectual leader: to effect positive social change in the world, to develop and grow effective, values-driven organizations, and to attend to the qualities of your own personal development, I will venture to say that it is the last of these that is in the greatest danger of falling off your radar.

You will have multiple stakeholders at any given point in your career who will hold you to account on the outcomes and effectiveness of your research, teaching, and administrative efforts. But it’s much less common that someone will ask you whether you are attending to the internal work necessary to grow as a scholar, as a leader, and as an individual. I hope you take my remarks as the challenge to maintain focus on the quality of your leadership.

If we are going to realize the change we seek in the world, toward a freer, more open, and more humane society, it is imperative that we care for, develop, and leverage our most valuable assets: Our minds, our character, and our humanity.

“If we are going to realize the change we seek in the world, toward a freer, more open, and more humane society, it is imperative that we care for, develop, and leverage our most valuable assets: Our minds, our character, and our humanity.”

If we internalize the lesson of epistemic humility, we are internally driven to learn more, not just from those who affirm our priors, but from those who challenge us intellectually, and push us to feed and develop our minds.

If we cultivate and take counsel from the impartial spectator, we hone our ability to exercise good judgment in difficult circumstances, and we enjoy a constant companion with whom we can keep company, even when friends are hard to find.

And if we engage with others from a position of deep respect for their inherent dignity, we magnify our own humanity. We will set an example that others will seek to follow. And we will find sustaining joy in our work.

And it’s through this kind of internal work that we advance the most important idea humanity has had the good fortune to stumble upon: The idea of freedom.

Endnotes

[1] For discussion of humility as a core value within MBM, see Koch (2015: 128–9):

“Arrogance is one of the most destructive traits in an organization. It hurts productivity by causing people to be oblivious to their own limitations and the contributions of others. […] Having humility means understanding and accepting yourself as you really are. It means admitting your mistakes and what you don’t know rather than being defensive and blaming others. Intellectual honesty takes humility to the next level. It is a dedication to truth — no matter how painful. It is sincerely seeking constructive criticism, not what Somerset Maugham identified as the more usual human tendency: ‘People ask you for criticism, but they only want praise.’”

[2] I’ve long wondered why, given its commitment to peaceful social engagement, voluntary exchange, and freedoms of expression, the liberty movement is not more closely associated with social movements based on the principles of non-violence. My guess, and it is only a guess, is that Gandhi and other leaders within non-violent resistance traditions have often been critical of capitalism. I will note that classical liberals too are critical of the kinds of capitalism Gandhi and others have criticized — crony capitalism that captures the coercive power of the state, bending it to the advantage of established industry, at the expense of the poor and politically disenfranchised, often with violent consequences. For classical liberal examinations of how markets favor peaceful relations, see Cobden (1903) and Boulding (1978).

References

Boulding, Kenneth. 1978 Stable Peace. Austin: University of Texas Press.

Cobden, Richard. 1903. The Political Writings of Richard Cobden. London: Fisher Unwin.

Hayek, F. A. 1989. “The Pretence of Knowledge.” The American Economic Review 79 (6): 3–7. (Reprinted in Boettke, Peter J., Stefanie Haeffele-Balch, and Virgil Henry Storr (eds). 2016. Mainline Economics: Six Nobel Lectures in the Tradition of Adam Smith. Arlington, VA: Mercatus Center at George Mason University.)

Hayek, F. A. 1988. The Fatal Conceit: The Errors of Socialism (The Collected Works of F. A. Hayek)Chicago: University of Chicago Press.

Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review XXXV (4): 519–530.

Koch, Charles G. 2015. Good Profit: How Creating Value for Others Built One of the World’s Most Successful Companies. New York: Crown Business.

Smith, Adam. 1984 [1759]. The Theory of Moral Sentiments (The Glasgow Edition of the Works of Adam Smith). Edited by D. D. Raphael and A. L. Macfie. Indianapolis, IN: Liberty Fund, Inc.

Emily Chamlee Wright is a senior affiliated scholar and Board Member at the Mercatus Center at George Mason University. She is the President and CEO of the Institute for Humane Studies. Prior to joining the Institute for Humane Studies, she was Provost and Dean at Washington College in Chestertown, Maryland, and Elbert Neese Professor of Economics and Associate Dean at Beloit College in Beloit, Wisconsin. Her primary research interests include development economics and cultural economics.