Libertarian as Logician: The True Essence of Libertarianism

Daniel Kahneman, the psychologist who received a Nobel Prize in economics, has studied extensively the way that humans use heuristics in making decisions. In his book, Thinking Fast and Slow, Kahneman describes decision-making in terms of two systems. What he calls System One works quickly and intuitively. What he calls System Two works slowly and logically.

System One relies on heuristics. For example, how do you react when you hear that mortgage borrowers are threatened with foreclosure (a widespread occurrence since the housing boom in the United States began to collapse in 2007)? A liberal (taking the modern connotation of that term) might react with the heuristic that there exist oppressors and oppressed, with a presumption that it is banks that have oppressed borrowers with predatory loans. Therefore, the liberal will favor policies to prevent foreclosures. A libertarian would prefer instead to ascertain the facts of the situation. Is the borrower primarily a speculator (about 15 percent of mortgage loans in 2005 and 2006 went for non-owner-occupied housing)? Did the borrower make any payments on the mortgage at all (some did not)? Did the borrower repeatedly refinance the mortgage as house prices were rising, using mortgage debt to support a lifestyle they otherwise could not afford? In these cases, the oppressor/oppressed heuristic does not provide the most appropriate framework for moral analysis.

The research by Ravi Iyer, et al, found evidence that libertarians have a propensity to employ what Kahneman would call System Two. They write,

The Cognitive Reflection Task is a set of 3 logic questions that have correct and intuitive answers. Correct answers on these questions is said not just to measure intelligence, but also to measure a person’s ability to suppress an intuitive response in service of the cognitive reasoning required to solve these problems… libertarians find the correct answers to these questions at a slightly higher rate than liberals and moderately higher rate compared to conservatives

Combining this result with other findings, the authors conclude,

The cognitive reflection task provides a behavioral validation of the hypothesis that libertarians have a more reasoned cognitive style.

The “ability to suppress an intuitive response in service of cognitive reasoning” describes someone with the patience and will-power to use logic rather than heuristics. It shows a determination to use System Two, not just rely on System One.

Using different terminology, nine years ago I wrote “An Open Letter to Paul Krugman”3. In that letter, I complained that Krugman frequently used what I called “type M” arguments, which employ a heuristic based on the alleged motives of people with whom he disagrees. Often, he would argue that people who disagreed with him were driven by evil ulterior motives. Instead, I urged Krugman to rely on what I called “type C” arguments, which look at the expected consequences of policies, rather than apply the heuristic of alleged motives. I argued that the use of type M arguments serves

to lower the prestige and impact of economists. We are trained to make type C arguments. Instead, you are teaching by example that making speculative assessments of one’s opponent’s motives is more important than thinking through the consequences of policy options. If everyone were to use such speculative assessments as the basis for forming their opinions, then there would be no room for economics in public policy discussions.

One might say that I accused Krugman of fostering the use of System One rather than System Two in the field of political economy. I think it is fair to say that even if he read my essay, Krugman appears not to have altered his approach.

Indeed, one of the biggest disappointments I have with the trends at America’s prestigious universities today is that they no longer seem to encourage students to use System Two. Instead, they lead students to substitute heuristics for thought. At a graduation I attended at one such university in May of 2012, the commencement speaker said that she had recently read a projection that the majority of Americans will be non-white by the year 2050. The students (mostly white) reacted with raucous applause, which I found shocking. To me, this demographic outlook is simply a fact, not something that should lead to joy or alarm. However, having spent four years learning the heuristic that white people are bad and non-whites are good, the students responded in this apparently intuitive way.

Is it a fair generalization that libertarians always use System Two while liberals and conservatives always use System One in approaching matters of social philosophy and public policy? Certainly not. At this point, I would say that we lack sufficient evidence to claim with confidence that libertarians are even slightly more likely to think logically and to avoid relying on heuristic shortcuts.

Set aside the empirical issue of how libertarians tend to think in practice. I want to make a normative proposal: libertarians ought to aspire to apply System Two as much as possible. The title of Robin Hanson’s blog, “Overcoming Bias,”4 should be the essential goal of libertarians.

What I am suggesting is that libertarians, rather than defining ourselves in terms of what we believe is right, could instead define ourselves in terms of how one should arrive at beliefs about what is right. Our goal should be to rely as much as possible on logic and as little as possible on heuristic biases. If using these methods leads to the conclusions that are traditionally libertarian, fine. If not, then we should change our conclusions, not our methods.

From this perspective, it makes sense that libertarians have a propensity to study economics and to engage in seminars and other intellectual discussions. By the same token, it is understandable that libertarians make relatively poor politicians. To the extent that personal political success requires appealing to System One, then libertarians should not aspire to personal political success.

Again, let me caution that the empirical question of whether or not libertarians are more logical than non-libertarians is far from settled. We should not be smug that we hold the logical high ground. What I am saying is that we should aspire to make more use of System Two rather than System One.

Note that this is not a straightforward process. Moral psychologist Jonathan Haidt points out that System Two often serves only to rationalize the decisions or conclusions arrived at by System One. The inference that I draw is that we should maintain a healthy skepticism about our own views. Are we being rational, or are we merely rationalizing?

Thus, we should consider taking the core belief of libertarianism to be the attempt to substitute logic for heuristics in the analysis of moral issues. The emphasis should be on the word attempt. For libertarians, logical thinking is not necessarily our exclusive ability. Rather, it is an obligation that we should try to fulfill.