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A liberal might find Aristotle's conception of the polis as an association of associations which has an "architectonic function" of "bringing order to and resolving conflicts between" the goods those associations pursue (e.g. health and the arts) illiberal. "It remains just one conception of the good life which competes with others."
Such objections highlight an ambiguity in the liberal notion of pluralism. Pluralism can refer to one of several theses about goods or one of several theses about beliefs about goods.
The theses (first set) about goods are: (1) The pluralist holds that there are a plurality of intrinsic goods which are not reducible to one to another (2) the pluralist holds that the end of politics is the realization of the plurality of goods.
The theses (second set) about beliefs about goods are: (1) At a descriptive level the thesis is that there are a plurality of beliefs about what is of value (2) At the meta-ethical level it is the thesis that no belief about values is superior to any other in the sense of being "truer" (3) At the level of political theory it refers to the liberal neutrality thesis that it is not the end of politics to promote one belief about the good because it is assumed to be superior.
Aristotle's account affirms the first set, but not the second.
The phrase "conceptions of the good" (often used in liberal political theory) is highly ambiguous as well. It could mean either (1) life plans or (2) ways of life or allude to (3) cultural difference. It is only when liberal political theorists intend it to mean something like "belief about the good" that their views conflict with Aristotle.
The defender of dialogical neutrality responds to the existence of a plurality of conflicting beliefs about the good by insisting on a public space for conversation that is itself neutral between contested beliefs. There is a basic flaw in that response: to accept the constraints of public rational dialogue already presupposes a particular conception of the good which has long been itself contested. When Kant introduces the conception of public life as a sphere in which one has 'freedom to make public use of reason in all matters', he is aware that it is contested, that it is at odds with some forms of social and religious life. Indeed the central issue between defenders of the enlightenment and their conservative critics resides in the question of how far traditions and ways of life should be open to rational reflection according to the 'universal' norms of rational discourse.
The Aristotelian view is easily reconcilable with political theories that affirm public use of reason, or a neutral forum. It cannot be reconciled with those who affirm the neutrality of the market.
Hayek rejects the householding conception of the market. Aristotle associates household/economic/use/good life and market/chrematistic/exchange/misconception of good life.
In Aristotle's work, economic institutions like political institutions exist for the sake of the good life. In the terms that Hayek takes up, he defends an economic model of the economy. This householding conception of economics, according to which economic life should be judged and organized according to a conception of the good, continues to be a the basis of the case for socialism, and some of the best writing in the defense of socialism bears a self-conscious Aristotelian heritage. Most notably it permeates the work of both Marx and Polanyi. The distinction at the heart of Marxian economics, between the use value and exchange value of commodities, Marx explicitly takes from Aristotle. Likewise, Aristotle's distinction between economic and chrematistic acquisition is reintroduced in terms of the distinction basic to Volume 1 of Capital between the circuit commodity-money-commodity from that of money-commodity-money, The model of communism set up in opposition to commodity producing societies is that of a householding economy, an economy organized around the satisfaction of needs and the realization of individuals' human powers.
For Polanyi, "Economic life must be constrained by a publicly agreed conception of the good life".
For Hayek, on the other hand...
The 'economy' of common parlance is not and should not be an 'economy' in the strict Aristotelian sense of the term. It rather represents a network of economies, of households and enterprises, ungoverned by any order of ends. Hence, the case for the market is not that is realizes some specific end of good, but rather that it is neutral between different conceptions of the good and specific ends of different agents and economic institutions.
For Hayek, the householding conception can only lead to totalitarianism and serfdom.
An adequate defense of the Aristotelian position against liberal critics must include the thesis that autonomy is a "central human good".
One mistake, exemplified by Muglan, is to hold that Aristotle would have approved of the modern corporate state.
Against Plato, Aristotle argues that the polis is not a unified association that supplants all other partial societies. It is within other partial societies that individuals pursue that variety of goods that makes for a self-sufficient polis. The polis is an association of partial societies. To make this claim is not to confuse inclusive and exclusive senses of the polis. Rather it is to present a particular conception of the polis as an institutional framework in which the partial ends of partial societies are pursued in a coherent fashion. The end of the polis as the good life is not some other 'distinct' end beyond the ends of partial societies {intermediate bodies}. It is rather an inclusive end which includes all intrinsic goods pursued in particular associations. Just as the individual's happiness is an inclusive good, which includes all intrinsic goods, so the polis's end is inclusive. The polis is the supreme community not in the sense of directly replacing all others, but rather in that of giving a proper order to the ends they pursue. The polis does not then directly take over the ends of partial associations. The proper place for the pursuit of the component ends of the good life remains those subordinate associations themselves. The polis rather brings coherence to them, having a role analogous to that of practical intelligence in ordering the goods of an individual life.
Proponents of the free market laud "civil society". But this could mean either the market (firms) or associations independent of the state (unions, professional association, other combinations). Free market proponents have opposed both state socialism and these associations independent of the state. Adam Smith wrote before any significant socialist movement, and opposed "combinations".
Broadly speaking, there are two types of argument justifying the market by reference to human good: (1) welfarist - markets realize human well-being (2) markets realize a central human good (autonomy).
Neutral welfarist: preference satisfaction.
Neutral autonomy: it is good for individuals to pursue what they believe to be good.
Substantive welfarist: Smith, Jevons, Menger
Substantive autonomy: J.S. Mill
Perfectionist (substantive) arguments for markets are superior to the arguments based on thinner conceptions, but there are problems even with these.
Over the last century there has been a shift from substantive to formal concepts of well-being in arguments justifying the market.
"The meaning of welfare"
Smith was objectivist about the content of well-being, drawing on the stoics: well-being is a set of material goods and personal excellences (self-command, benevolence, etc).
Jevons and the other founders of neoclassical economics were hedonists. "Purchasing pleasure, as it were, at the lowest cost of pain".
Menger, unlike later austrians, was an objectivist about value who allowed for "imaginary goods" (goods that do not have attributes they are supposed to have, or attributes which answer to nonexistent needs).
Radical formalism can result in accepting the conclusion that economics has no normative implications at all. The formal concept of utility is unrelated to the substantive concept of welfare. This is a reasonable view, but not often followed. Neoclassicals and Austrians alike define welfare as preference satisfaction.
This section is titled "Subjectivisms in Economics".
In what sense is the preference satisfaction theory of well-being 'subjectivist'? To get some initial clarification I want to start with a useful distinction made by Allen Wood between three different senses of subjectivism as an account of well-being. (1) Subjectivity of content: well-being consists in having the right subjective states. (2) Subjective variability: the content of well-being may change from person to person. Different people can lead happy lives in different ways. What is good for you or makes you happy may not be good for me. (3) Subjective determination: the content of a person's well-being is determined by their desires or beliefs about what is good for them. What is of values for me is determined by what I value. What is good for me is determined by what I actually desire or believe is good for me. {p38}
Wood argues that the first two of these occur in the classical and modern periods alike. The third is distinctively modern.
Epicurus is subjectivist concerning content: well-being is a matter of having the right mental states (viz. pleasurable ones). Aristotle is objectivist concerning content, but subjectivist concerning variablility. "The food required for the physical well-being of Milo the athelete differs from that of the ordinary person"
All classical accounts reject subjective determination. Preference satisfaction accounts are subjectivist concerning determination, not content.
Mises cites Jacobi's inversionj of Aristotle approvingly: when we say "x is of value to a", that is always reducible to "a values x". This confuses an intentionsal and an extensional satement: if Martha values an anonymous benefactor, it does not follow that Martha values Joseph, who unknown to her is that benefactor,
This points up the basic problem at the heart of both neoclassical and austrian subjectivism and the attendant welfare arguments for the market: they don't allow for mistakes about what is of value. A more sophistcated version of the subjective determination thesis goes:
what is of value for a person is what the person would desire or value when cognitively competent and fully informed.
Menger holds that exchange value is subjectively determined, but welfare is objective. Mises is wrong to accuse him of inconsistently on this point.
p42