“Once one starts to think about [economic growth], it is hard to think about anything else.”

— Robert Lucas, On the Mechanics of Economic Development, p.5

I. Introduction

In my previous post, What Liberalism Is, I offered a bottom-up account of liberalism, understood as a social and political framework within which people can discover and satisfy their heterogeneous preferences without resorting to violence. But this account invites a natural question: how could we know whether it is delivering on its promise? By what metric might we judge whether a liberal framework is actually succeeding?

Readers who made it through the footnotes may recall my promise to say more about the political economy I think liberals should endorse. This essay begins that argument. I defend Gross Domestic Product (GDP) as the best scalar proxy for a society’s capacity to solve problems and satisfy diverse preferences: a measure of the means available for individuals to pursue the ends they value. GDP is the annual flow of output through which that capacity is exercised, and from which future capacity is built. Since increases in that flow compound, sustained growth expands the scale of cooperation and prosperity exponentially across generations. Hence, I argue liberals should regard GDP as the most important single measure of long-run social progress.

II. What Is GDP?

The other week, I was walking to the library in the rain. This was a pretty miserable experience. My socks had somehow got wet, and my ears burned with the cold. I’ll spare you more details, but those with any experience of British weather will have no difficulty believing that I had a fairly strong preference not to be so afflicted.

How strong was that preference? One way to answer is to ask what I would have been willing to give up to avoid that half an hour of discomfort. Had there been a costless way of reaching the library more comfortably, I would obviously have taken it. Equally, there is some price above which I would not have paid: I did not, for instance, think it worth booking an Uber. Somewhere between those two points lies a reservation price at which I would have been indifferent between paying to avoid the misery and simply enduring it. That price captures how much I valued the benefit in question relative to the opportunity cost of all the other things the same money might have bought.

The reason to express the preference in monetary terms is that money supplies a common measure for unlike goods and services. I cannot add together umbrellas, haircuts, vaccines, and houses in their own units. But these heterogeneous alternatives need to be made comparable because they are rival uses of scarce resources. Labour and capital put to one purpose cannot also be put to another. Money therefore gives us a way to express what else the same resources might have done. A price is not a little unit of happiness, but an exchange ratio against the rest of the economy1.

In the market case, voluntary exchange marks the moment at which one use of resources is chosen over its alternatives. If I buy an umbrella for £5, I am revealing that, at that margin, I prefer the umbrella to whatever else £5 could have secured; the shopkeeper reveals the opposite ranking. The transaction records not the total benefit either of us derives, but the price at which the exchange becomes mutually acceptable. Had I been willing to pay £9, the extra £4 of benefit I receive — my consumer surplus — never appears in the accounts, because it does not correspond to any further use of resources. What is recorded is the £5 at which the umbrella moves into final use: the value of the alternatives set aside so that this use could occur.

Let us now extend this logic from a single market exchange to an entire economy. The difficulty is to count each final commitment of resources once: including every good or service taken up in final use, but not counting the same underlying sacrifice again as it passes through successive transactions. Flour sold to a baker is not yet such a commitment, because its value is carried forward into the bread; to count both flour and bread would be to double-count the same sacrifice. The accounting must therefore attach to the stage at which the chain of substitutions terminates: where the good or service stops being passed onward as an input into further production, and is instead taken up in final use — consumed or added to the stock of productive assets2.

This also makes clear that output does not need to be transacted in a market to count. That is the clearest case, as it directly reveals a price: an umbrella is bought for £5. But the broader category is final output with an assignable money value3. That value may be revealed by a sale, imputed from a neighbouring market, as with owner-occupied housing, or recorded at cost, as with courts and other government services. In each case, what matters is that labour, capital, land, energy, materials, buildings, and administrative capacity have been committed — successfully or not4 — to one set of ends rather than others, and the resulting good or service has reached final use.

Thus, we arrive at the concept of GDP: the money value of all final goods and services produced within an economy over a year. It records the annual flow of value as scarce resources are turned into goods and services, generating incomes that become claims on further goods and services, and are ultimately spent in final uses as households, firms, and governments act on the world. In expenditure terms, GDP is the sum of private consumption, private investment, government consumption and investment, and net exports. By aggregating the money value of final output across the economy, it tells us the scale on which a society is able to bring scarce resources to bear on its problems, and to sustain the experiments by which better solutions are found.

That is why the income and output approaches — or, as I have framed them, the generation of preference-satisfaction capacity and the exercise of problem-solving capacity — track the same quantity. Production generates incomes, and those incomes are claims on goods and services, now or later. The same flow therefore appears as output when we ask what was made, as income when we ask what command over resources was generated, and as expenditure when we ask where that command was exercised. Seen this way, GDP is not three different measures that happen to coincide, but a single flow traced through its creation, its distribution, and its use — the economy’s continuous conversion of resources into solutions.

III. What Goes Up When The Line Goes Up?

GDP, as defined above, is a flow measured over a year. But the quantity Lucas could not stop thinking about was not the level in any given year; it was growth. That is, not how much problem-solving capacity an economy can command at a moment, but whether that capacity is expanding year on year. Much scepticism about GDP is scepticism that the line going up reflects more real output, and a greater capacity to produce goods and services, rather than just shifts in prices or measurement.

For example, one might worry that if every price and income doubled overnight, measured GDP would double too, but nothing in the world would thereby be easier to obtain. I would have twice as many pounds, the umbrella would cost twice as many pounds, and my socks would be no drier. For our purposes, then, nominal GDP is not the object of interest.5 We care about real GDP, which adjusts for changes in the price level over time and asks whether more final goods and services have actually been produced. Similarly, purchasing-power adjustment captures differences in price levels across countries, so that comparisons are not distorted by market exchange rates, but reflect the goods and services people can command where they live.

Once prices are made comparable over time and space, there remains the question of scale: not only how much an economy produces, but how many lives that output has to support. Aggregate GDP captures the scale of the whole. A larger economy can sustain deeper capital markets, more specialised firms, more ambitious infrastructure, more scientific and cultural institutions, more military capacity, and more experiments at the frontier. GDP per capita captures the scale at which output stands behind each individual: how much productive capacity, on average, society has to support each life. A liberal should care about both, because a liberal society is made of individuals pursuing their own ends, and also of institutions capable of doing things no individual can do alone — fighting wars, responding to pandemics, pursuing moonshots.

Beyond these mundane clarifications is a more substantive suspicion: did the line go up because society solved more problems, or because more money changed hands in solving the same ones? This can happen in two ways. First, a good may pass through a longer chain of exchange. If that chain preserves, transports, or improves the good before it reaches final use, that is real output; if it merely multiplies invoices, it is not. Second, the same problem may be solved at greater expense. I could spend £5 on an umbrella or £20 on an Uber; was four times the value really produced in the latter case? Sometimes, yes: it may be quicker, warmer, or more comfortable, and so may solve a different problem. But if we hold the benefit fixed, the Uber’s extra £15 is not extra achievement; it is resources that could have solved another problem. It makes this transaction larger, not the economy richer. What matters is value added: a society grows rich by doing more with less, and then doing something else with what remains.

Across time, too, the question is not whether resources were used, but whether their use leaves society further ahead. GDP records a flow, not the stock of wealth from which future flows are drawn. If a window is smashed and then repaired, the repair enters GDP: the glazier worked, materials were used, and a service was supplied. But breaking a window in order to pay for repairs — or more generally, creating new obstacles to the satisfaction of given wants — does not raise the growth path above where it otherwise would have been. The repair is counted, but the labour and glass have merely been diverted from uses that could have satisfied other wants. Society ends with the same window and fewer possibilities elsewhere. A flow can be real, then, while still representing a bad use of the stocks that make future flows possible.

The line that matters most is therefore the sustained growth of real GDP per capita: more final goods and services, adjusted for prices, standing behind each person over time. A single year’s figure can be flattered by repairs, waste, or the running down of stocks; growth that depends on consuming its own sources cannot continue. But if real GDP per capita rises and keeps rising, it is good evidence that society’s underlying capacity has expanded. The set of feasible lives has grown. More problems can be solved, more plans pursued, more failures absorbed, more experiments run at once.

IV. GDP and Liberal Neutrality

So far, so liberal: greater prosperity gives people wider latitude in which to pursue their own ends. But while GDP growth expands the range of lives people can lead, it takes no view on whether those lives are admirable, or whether the preferences they serve are worth having; it just counts whatever reaches final use. This is the thought behind the old joke, often used as a reductio of GDP as a measure of social value6:

Two economists are walking in a forest when they come across a pile of shit.

The first economist says to the other “I’ll pay you $100 to eat that pile of shit.” The second economist takes the $100 and eats the pile of shit.

They continue walking until they come across a second pile of shit. The second economist turns to the first and says “I’ll pay you $100 to eat that pile of shit.” The first economist takes the $100 and eats a pile of shit.

Walking a little more, the first economist looks at the second and says, “You know, I gave you $100 to eat shit, then you gave me back the same $100 to eat shit. I can’t help but feel like we both just ate shit for nothing.”

“That’s not true”, responded the second economist. “We increased the GDP by $200!”

But this is not really an objection to GDP, so much as an objection to the economists’ imagined preferences. If each economist really did value the spectacle at $100 — if, for reasons too private or perverse to dwell on, each genuinely preferred watching the other perform this act to whatever else $100 could have bought — then the entries would be as legitimate as any other, with the surplus riding silently above the price as it always does. GDP measures means, not ends. The transaction is structurally no different from two therapists treating one another, or two chefs cooking one another dinner. The joke only works because we assume nobody has preferences like that.

But what if someone did? Well, the liberal claim is not that whatever people happen to want is necessarily good, admirable, or conducive to flourishing. It is that a social order should leave people broad scope to conduct “experiments in living”: to pursue different ends, discover through experience whether those ends yield the kind of life they want, and revise them when they do not. A liberal order is not organised around an official ranking of worthy and unworthy lives. It is organised around individuals, within general rules, pursuing the ends they themselves have reason to value.

GDP inherits this neutrality. It does not ask whether the ends pursued in an economy are profound, tasteful, elevating, dignified, or conducive to salvation. It asks how much real final output a society produces, how much command over resources is generated, and how much room people and institutions therefore have to act on the world. This is why GDP sits naturally inside a liberal political philosophy: it gives a society a measure of means, while leaving open what those means are finally for.

Of course, this neutrality is not boundless. As discussed in my earlier piece, the liberal project begins from the need to constrain violence and stabilise cooperation, and so a liberal society still prohibits force and fraud, protects rights, and thereby excludes whole classes of action from the domain of permissible choice. The national accounts operate inside that settlement. Statisticians may estimate production even where it is unlawful (drugs and prostitution are included in the UK’s accounts7) but a liberal legal order does not leave slave markets or contract killing as ordinary sites of production to be measured. GDP is neutral only within the world the law has made available.

Within the domain marked out by those rules, the liberal is reluctant to replace people’s own experiments with an official table of the good. This is why GDP is a better liberal proxy than more morally saturated alternatives. The Human Development Index, the Genuine Progress Indicator, and other assorted “beyond GDP” scorecards begin from the complaint that GDP omits much of what matters. True enough: it omits judgments about ends. But this is a feature, not a bug. To build a composite index, one has to decide what matters, how much, and at what rate one good trades against another. How many years of life expectancy is a year of schooling worth? How much clean air buys how much consumption? How should reported happiness weigh against family formation, or religious life, or national defence?

These are political and moral questions. A society may have to answer them, but the answer should not be built into an index, where a disputed ranking of ends can return disguised as neutral measurement8. The advantage of GDP is precisely that it refuses this move. It measures the scale of means without pretending to settle the value of ends, leaving those arguments in politics, philosophy, and the lives people choose.

V. What Wealth Is For

That objection to GDP is accordingly little more than an objection to liberal pluralism. A reasonable objector may nevertheless say: fine, within a liberal order, individuals may pursue a plurality of ends. But the metric still leaves out much of what those people actually care about: family, community, institutional stability, the relief of poverty and child hunger, a habitable planet. And in some cases, such as perhaps climate change, growth seems not merely to miss the good, but to undermine it.

But recall what GDP is: a measure of means, the flow of resources a society produces, out of which anything it wants done must be paid for. Most of the goods on the objector’s list can be secured at scale only by a society that commands more of those means. They are not disembodied moral nouns floating above the material world, but also require buildings, tools, supply chains, energy; that is to say, they require output.

Suppose we stipulate that there is one category of goods which are not in dispute. Nobody thinks it is good that children die of preventable disease, or that families go hungry, or that sewage should run in the streets. There is no deep pluralist mystery to solve; we know what direction improvement lies in. The obstacle is not that society has failed to discover whether clean water, antibiotics, warm homes, food, and basic safety are good. The obstacle is that securing them at scale requires resources.

So, it should be unsurprising to find, in these graphs from Our World in Data, that GDP per capita is an excellent proxy for the conditions that enable this. Countries with higher GDP per capita have much lower poverty rates and longer life expectancies. Their children are far more likely to survive childhood. The poorest members of richer societies enjoy higher consumption levels than their counterparts in poorer ones.

None of these correlations are very mysterious. It isn’t that GDP secretly measures all of these things. It doesn’t have to; it measures the means from which they are made, and since everyone agrees these ends matter, those means are deployed in the form of sanitation systems, insulated homes, new technology, and slack against misfortune. A society that produces more is better able, all else equal, to secure these goods.

Naturally, the same holds for goods about which people disagree. What forms of community answer to them, what art moves them, what work they find worth doing, how much they value rootedness against mobility, whether they want more leisure or more consumption, what balance of family, friendship, religion, ambition, pleasure, and solitude makes a life go well — these are not questions society can settle in advance. Often they are not even questions a person can settle in advance. They have to be tried. The utility of wealth is not only that it enables one to buy goods already known to be wanted. A richer society gives people more room to leave, return, retrain, start again, support a family, care for a parent, change work, take a risk, endure a mistake, or discover that what they thought they wanted was not, in fact, worth wanting. A society near subsistence can contain many forms of courage and beauty, but it cannot run many experiments at once, nor absorb many failures without ruin.

Thus if one asks the obvious question — whether people are actually happier in richer countries, at least beyond bare subsistence — the answer is yes. For a time it was thought otherwise: the Easterlin paradox held that happiness rose with income only up to some threshold, beyond which adaptation and rising expectations ate the gains. The best current evidence no longer supports this threshold. People in richer countries generally report higher life satisfaction, and richer people within countries generally do too. The relationship between income and how people rate their own lives is close to log-linear and shows no point at which it levels off, rich countries included.

Once one sees what tends to come with higher GDP, the hockey-stick graph of world output takes on its proper significance. It is not a picture of “the economy” getting larger, as though the economy were a machine humming pointlessly in the background of human life9. It is a picture of humanity becoming vastly more capable of solving its problems. For most of history, the normal human condition was poverty, disease, darkness, hunger, child death, physical drudgery, and extreme vulnerability to bad luck. The modern growth take-off did not abolish suffering, or stupidity, or tragedy. But it changed the scale on which human beings could act against them.

Of course, it is not the case that literally everything one might care about rises with GDP. Religion seems in many places to have declined as societies have grown richer. But a richer society does have more of the slack and resources out of which religious and communal life can be sustained: free evenings, spare rooms, institutional capacity, money for buildings, and the margin for commitment. It is a separate question whether the relevant forms exist, whether people can coordinate around them, and whether people still want them as strongly once other options open up. But absent growth, we do not even find out what people would choose under conditions of abundance, nor would we have the resources to satisfy those wants at scale if we did.

Much the same is true of climate change. At some margins, more output may indeed damage the climate: carbon emissions impose costs often not visible in the prices of the goods and services that produce them. But the liberal response to an unpriced cost is not to abandon growth, still less the exchange economy beneath it, but to bring the cost within the system of general rules — for instance, with a carbon price. Meanwhile, the relationship between output and emissions changes as countries grow richer, since a larger share of income tends to go to services rather than heavy industry: yoga classes increase GDP too. And decarbonisation itself is enormously resource-intensive, requiring scientific research, new capital stock, rebuilt grids, adaptation, and the fiscal room to absorb the costs of transition. None of this means that the “environmental Kuznets curve” has a law-like inevitability, or that growth is sufficient to solve environmental problems; political failure remains possible. But whatever a society resolves10 to do about the climate, output is what it will do it with.

VI. In The Long Run, We Are All Rich

Given that this defence of GDP trades on correlations — output per head correlating with longer lives, lower child mortality, and higher consumption among the poor — one might object that we could simply measure those things directly. And if we want a single number, why not median income? It too correlates with GDP, has a much clearer bearing on the life of a typical household, and seems to be what voters themselves care about when they keep or discard their governments. So, why privilege aggregate output over the measure closer to how people actually live?

Such considerations make sense in the short term. Over a year or an electoral cycle, median income tells us something GDP does not: how much of the flow reaches the typical household. Other measures better suit other important questions. Again, GDP does not measure how output is distributed, only the aggregate resources available.

It’s not that a liberal should be indifferent to these questions. It’s that, over the long run, GDP dominates any of these other measures, because the long run is governed by a different arithmetic: compounding. If an economy grows at 1 percent a year, then after a century, it will be 2.7 times richer. If instead it grows at 2 percent a year, it will be 7 times richer after a century; at 3 percent, 19 times richer. Differences in growth rates that look small in any given year become, over generations, the difference between civilisations. This is why Lucas could not stop thinking about growth11: over a long enough horizon, the rate of growth becomes the background condition for almost anything else a society might want to do.

Tyler Cowen12, in Stubborn Attachments, borrows from Frank Knight the image of a “Crusonia plant”: a mythical crop that keeps yielding more over time. Imagine an apple tree whose fruit supplies the seeds of more apple trees. A single harvest may be beautiful or useful. But if one plant keeps producing indefinitely, its future output becomes difficult to trade off against any benefit another plant offers only now. Economic growth matters in something like this way: other goods make claims on society’s resources; growth expands the resources those claims are made upon.

In economic terms, the point is that flows build stocks. Wealth is a stock: the assets a society has accumulated and can draw upon — houses, hospitals, laboratories, roads, machines, schools, pension funds, skills, institutions. GDP is the current flow of production and income out of which future stocks are built. Median income is a slice of that flow. Redistribution can enlarge the slice, but it cannot, by itself and indefinitely, raise the level from which the slice is cut: that takes growth. Every future stock — the hospitals and laboratories and pension funds of 2126 — has to be built out of the flow of the years between now and then. So the median is downstream of GDP; and a policy that lifts it today by shaving a few tenths off the growth rate buys a visible gain at an invisible cost. This is Bastiat’s seen and unseen, drawn out across generations: the seen is this year’s distribution; the unseen is everything the foregone growth would have made possible, invisible because it lies in the future.

So, the target is sustained growth in real GDP per capita13. Measured output this year matters only insofar as it tells us whether capacity is being expanded. A bridge to nowhere may enter the accounts; it does not make the economy more capable. A transfer may change who receives the current flow; it does not explain where future flows will come from. A society should not ask how to make the plant look larger this season. It should ask whether the plant is alive, and whether it is still growing.

The shape of the hockey stick is not mysterious: a roughly constant percentage growth rate, plotted in levels, becomes an exponential curve. What is astonishing is not the curve but the constancy — the fact that, for two centuries and counting, we have kept the process of problem-solving running and correcting long enough for the curve to bend almost vertically upward. What remains is to explain what kind of order can do that: how resources keep finding problems, how solutions keep being tried, how failures get corrected, how the flow of one year becomes the capacity of the next.

VII. Conclusion: Capacity, Not Achievement

Let’s summarise the argument. GDP is not a measure of the good, but of the means by which almost any good must be pursued: the flow of final output a society draws from scarce resources, and the problem-solving capacity that flow represents. Real GDP per capita tells us how much capacity stands behind each individual’s life; aggregate GDP, what a society can mobilise at scale. Because that flow compounds, sustained growth in real GDP per capita is the most important scalar fact about a society. That is why, I have argued, GDP is the measure a liberal should reach for first.

Of course, it is not the whole story. Kuznets, who did as much as anyone to build the national accounts, warned against confusing national income with national welfare. Capacity is not achievement. A society can command enormous means and turn them to very little; the resources can be abundant while the matching of resources to problems fails. A Crusonia plant tells you the orchard is growing; it does not by itself show how that growth connects to the particular uses people find valuable.

That is why a defence of GDP cannot stop with GDP. The statistic records the conversion of resources into solutions; it does not explain how resources find their way to the uses that matter. A scalar cannot explain how that happens in the quantity and form people actually need. Yet a resource solves nothing until it is matched to a valued use by a method that works. Moreover, a society’s means grow as more of its resources are turned to such uses. To direct resources toward the preferences people actually have, and to enlarge what they are able to do, are not two separate tasks. They are the same process seen from two sides. How does a free society solve this problem?

That is the subject of the next essay — a liberal defence of markets14.

In the Paris Notebooks of 1844, Marx develops an account of alienation in four forms – from the product of labour, from the activity of labour, from species-being, and from other humans – and argues that capitalism generates this condition. By “capitalism”, Marx understands the social form distinguished by private ownership of the means of production, wage labour, generalised commodity production, and production for exchange-value. To demonstrate a “necessary connection between alienation and the capitalist mode of production in particular” requires showing both that capitalism necessarily produces alienation, and that the connection runs to capitalism specifically rather than to features shared with non-capitalist forms. I argue that he fails on both counts. Insofar as Marx identifies something specific to capitalism, it belongs only to a particular phase of industrial capitalism; insofar as he identifies something inherent in capitalism, he fails to show that its source lies in capitalism specifically rather than in more general features of complex coordination under scarcity – specialisation, division of labour, indirect exchange, the difficulty of recognising one’s agency in a collective product – that characterise any large-scale productive system, capitalist or otherwise.

Marx can treat capitalist labour as alienated only because he treats it as capable of self-realisation. In labour, humans form purposes, transform nature, and give objective existence to their powers, so the product can be recognised as their own activity made actual. This is the positive sense of externalisation Marx inherits from Hegel. Marx writes that in production, man “duplicates himself not only in consciousness, intellectually, but also in working, practical fashion” and so “contemplates himself in a world he has created” (Marx, 1994, p.76). Alienation inverts this structure. As in Feuerbach’s theory of religion, where humans project their powers into God and become subordinate to their own creation (Wood, 1981, p.12), the worker “puts his life into the object” only to have it return as something independent, hostile, and no longer recognisably his own (Marx, 1994, p.72).

This already answers the objection that, since all production involves externalisation, alienation seems unavoidable. The product’s externality is not alienating in itself (James, 2021, p.172). It must stand outside the worker, as the independent result of productive activity, or self-objectification would be impossible. Alienation arises only when this externality takes a social and hostile form (Sayers, 2011, p.5); it is “the specific conditions of objectification ‘in the sphere of political economy’ and not the nature of objectification itself” that make labour alienating (Avineri, 1968, p.103). Marx’s account is therefore not vulnerable to the crude objection that all production is alienating; its force depends on showing that capitalism turns objectification into alienation.

Marx’s first specification of this transformation is alienation from the product of labour. Under wage labour, what the worker produces neither belongs to him nor expresses his activity; instead it “confronts him as an alien thing, a power independent of the producer” (Marx, 1994, p.71). The product is “alien” because the worker cannot recognise his own powers in it, and a “power” because, as capital, it returns to dominate the activity that produced it. This double character follows from the wage relation: the worker sells his labour-power; the product belongs to the capitalist; what he produces for himself is not the object but the wage (Marx, 2000, pp.275-276). The product is thereby separated from him in two senses. First, it becomes indifferent to him: its significance lies in its exchangeability and the wage it secures, not in any determinate satisfaction of need (James, 2021, p.172). Second, it is appropriated by another and absorbed into capital, which confronts labour as the condition of employment, so the worker’s activity returns as a power over him (Elster, 1986, p.55). As a result, “the more objects he produces the less he can possess and the more he falls under the domination of his product, capital” (Marx, 1994, pp.71-72).

One may object that this moves too quickly from transfer to estrangement. (Wood, 1981, p.42) writes, “the laborer’s activity is something the capitalist has bought for a wage, which therefore is ‘alienated’ from the laborers and no longer belongs to them”. The “therefore” is unearned: not everything made for another is alien in Marx’s sense. A craftsperson produces for a customer without retaining the object; a doctor treats a patient without owning the result; a cooperative member contributes to a collective product belonging to the association. Nor does paid work make the product hostile to the worker: she may charge a price to ration scarce productive capacity, and income may function as a signal of how much consumers value what she makes (Mises, 2007, p.705). Nor, in any complex process, can one worker claim the whole product as her own, since capital, land, and others’ labour enter into it – a point Marx recognises in denying any primitive right of appropriation (Wood, 1981, p.43). If alienation from the product rested on non-retention or wage-earning, it would collapse into production for others, and prove too much.

But Marx does not claim the product is alien because it belongs to another. His argument is structural: under capitalism, the worker’s labour-power is bought and directed by capital, so the product enters an exchange process beyond his control. Wage labour and commodity production sever the direct link between work and need, since workers “own neither their tools, nor the materials they work on, nor the product of their labour”; these become capital, “a power independent of the workers and opposed to them” (Sayers, 2011, p.90). Alienation from the product is thus not non-possession but a relation to an object whose production, ownership, and meaning are not his own. Whether that relation is estranging therefore depends on the conditions under which the activity is performed.

This shifts the burden to Marx’s account of alienation from the worker’s activity itself. As he writes, “How could the worker come to confront the product of his activity as something strange unless he were becoming estranged from himself in the very act of production?” (Marx, 1994, p.73). The product is alien because the activity embodied in it is already not the worker’s own. Labour is “external” because it does not express his purposes: “in his work”, Marx says, “he does not affirm himself but denies himself” (Marx, 1994, p.73). Socially, his labour-power is sold to the capitalist who directs its use; practically, he works for subsistence. Work is therefore “not the satisfaction of a need but rather just a means to satisfy needs outside itself”, and is “avoided like the plague” absent compulsion (Marx, 1994, pp.73-74). Alienation lies not in work’s unpleasantness, but in self-realising activity becoming an imposed means of survival.

One may object that this proves too much. Humans must labour to live under any mode of production, and any developed system directs labour to needs beyond the worker’s own. Nor does paid, organised, or necessary work by itself make labour external. Capitalism allows workers to choose occupations by aptitude or interest, develop skills, and identify with their work even when it provides income1. Conversely, non-capitalist labour may also be necessary, repetitive, or externally directed: a subsistence farmer may be more constrained by natural necessity than a wage labourer, while doctors, teachers, and engineers may work for income without experiencing their activity as alien. If labour counts as alienated whenever it is necessary, instrumental, or socially directed, alienation arises not from capitalism but from material production under scarcity and social cooperation as such.

Marx would reply that his target is not necessity itself but necessity mediated by a social relation in which the worker’s labour-power is purchased by another for the contract’s duration. Wage labour makes work itself a commodity, “related only externally to the needs it satisfies”, reducing productive activity to wage-earning (Sayers, 2011, p.92). Even workers who retain pride or identification therefore remain structurally alienated insofar as their activity is subsumed under capital. This is why Marx treats private property not just as the presupposition of alienated labour, but as its product: externalised labour takes the form of another’s property, which confronts labour as capital. As (Wills, 2024, p.85) puts it, since “the worker has nothing to sell but her own labor power” and must sell it to live, “the labor the worker performs is not her own, but belongs instead to another person”. Capitalist labour therefore reproduces capital as a commanding power: through her productive activity, the worker sustains the conditions of her dependence.

This preserves the distinction between necessary and alienated labour but fails to show that wage labour as such estranges the worker. Its force depends on workers being effectively propertyless and dependent on continued employment, such that the accumulation of capital returns to them only as a power opposed to their activity. This may describe much of the low-discretion industrial labour Marx observed, but it is not identical with capitalism as such. Firms compete for labour, giving workers bargaining power and scope to choose their employer and occupation; capitalist growth can allow workers to accumulate savings, pensions, and other claims on capital. Capitalist development has not simply intensified dependence: working hours in wealthy countries are roughly half their late-nineteenth-century level (Herre, 2024); most OECD countries have over half their working-age population in asset-backed pensions (OECD, 2024); and 58% of U.S. households owned stock directly or indirectly in 2022 (U.S. Securities and Exchange Commission Staff, 2025).

These tendencies do not give workers collective control over production, but they show that labour’s contribution to capital need not return only as an alien power: it may also improve workers’ bargaining position, leisure, security, or wealth. Marx can still object that workers remain subject to market dependence and lack collective control over production. But once market dependence no longer entails the one-sided reproduction of capital’s power over labour, this objection adds little to the necessity of labour under scarcity. The burden therefore shifts: Marx must show that capitalism, unlike other complex productive systems, alienates workers by depriving them of collective control over production.

Marx can treat this lack of control as alienating only because he treats productive activity not as one instrument among others, but as the privileged expression of human powers. This is his account of alienation from species-being. Humans are distinguished from animals not by labour – animals too act on nature to meet needs – but by the capacity to make their own species-nature, and that of other things, objects of conscious theoretical and practical activity; man regards himself as “living species, i.e. as a universal and therefore free being” (Marx, 1994, p.74). Human production is not instinctive but purposive, in conscious membership of a species capable of free, creative, universal activity (Wood, 1981, p.32). Species-alienation occurs when this capacity is reduced to its animal function: under wage labour, the worker still produces, but only to survive, so that “our species activity is reduced to a mere means to satisfy physical needs” (Sayers, 2011, p.92). The worker loses not only product and activity but the possibility of recognising production as the expression of his human powers.

One might object that this relocates the difficulty into Marx’s anthropology. Even if labour can be self-realising, it does not follow that it must be the privileged site of self-realisation, or that work done mainly for income alienates a person from her essence. Humans realise themselves through friendship, family, art, religion, study, play, consumption, and association, and may reasonably treat work as instrumental while finding fulfilment elsewhere2. Capitalism is not unique in reducing labour to survival: in poorer or less developed societies, work is often more tightly governed by subsistence, whereas capitalist growth can create conditions for expanding the non-work activities through which people develop their powers (Sayers, 2011, pp. 90–91).

The Marxist reply is that production is not just any activity, but the activity through which humans transform nature, reproduce their social world, and objectify their powers in durable form: the worker exhausted by alienated labour lacks the conditions for fulfilment elsewhere. But this does not meet the objection. It remains compatible with both the plurality objection and the claim that capitalism can expand conditions for flourishing. Nor does it show that capitalism is uniquely vulnerable to Marx’s standard: other modes of production may violate it through poverty or coercion3. Even if Marx’s species-being standard is granted, he has not shown that capitalism as such necessarily violates it.

A claim of necessity therefore requires one further step: that this loss is not a contingent frustration of human powers under scarcity, but a specifically capitalist social relation in which the worker’s own powers confront him through domination by others. Marx supplies this in the fourth form. Alienation is necessarily social: if humans realise their nature as members of a species in a shared world, estrangement from product, activity, and species-being must become estrangement from others. An “immediate consequence” of man’s estrangement from himself is “the estrangement of man from man” (Marx, 1994, p.76): the worker confronts the capitalist as owner and purchaser of labour-power, other workers as competitors, and the wider social process not as a common project but as an impersonal system of exchange. This is the form Marx most explicitly presents as specific to capitalism and commodity production, developed later under the heading of commodity fetishism (Sayers, 2011, p.92). Capitalism organises cooperation in a form whose cooperative character is obscured: workers participate in a vast process whose connection to their contribution is opaque, so that interdependence appears alien (Sayers, 2011, pp.91-92).

One might object that markets do not merely separate people who would otherwise cooperate transparently; they coordinate people who might otherwise be unable to cooperate at all. The capitalist, on this view, does not direct production according to private whim: market demand pressures him to orient production towards others’ needs, giving labour an indirect social purpose. The division of labour obscures cooperation but enables cooperation beyond communal deliberation (Smith, 1983, p.121). A worker producing one component of a complex good may not see the whole process, but this opacity may be the price of scale, specialisation, and dispersed knowledge. Capitalism connects persons unable consciously to organise a shared project, letting them contribute to one another’s purposes through exchange (Hayek, 1945). Nor is opacity peculiar to markets. A planned economy may replace prices with bureaucratic targets confronting the worker as external authority; a cooperative may leave each member performing a narrow task whose relation to the whole remains opaque.

Marx is right that capitalism connects people as owners of commodities, sellers of labour-power, and bearers of exchange-value, so that social relations appear as relations between things – wages, prices, commodities, capital. Alienation here is therefore not mere opacity, but opacity mediated through specifically capitalist relations. Yet unless ownership, wage-dependence, and exchange have already been shown to make labour alien, this cannot establish necessity. Any large-scale productive order must mediate individual activity through institutions, roles, and social requirements that no producer individually controls. Marx’s communist alternative does not solve this. Even within the “realm of necessity” Marx concedes must remain, the “associated producers” (Marx, 1992, p.959) cannot, in any complex industrial process, recognise the product as the expression of their powers, or their labour as the immediate satisfaction of another’s need. Indeed, Marx himself “suggests the division of labour as such is a form of alienation” (Sayers, 2011, p.88), which implies that the remaining source of estrangement may lie in mediated division of labour rather than in capitalist mediation specifically4.

Marx therefore fails to show a necessary connection between alienation and capitalism in particular. His claim is not that all objectification or production for others is alienating, but that capitalism turns human powers against their possessors through private property, wage labour, commodity production, and exchange-value. Yet each aspect depends on conditions not identical with capitalism itself. Alienation from the product is defended by relocating it to alienation in activity; but the claim that labour returns as capital to dominate the worker requires more than wage labour, since workers must labour in any system and capital’s growth need not deepen subjection. Marx therefore appeals to species-being: labour is alienated when producers cannot control and recognise themselves in production. But this standard is either too broad, condemning necessary labour as such, or partly mitigated by capitalist development. The fourth form is meant to rescue the point by giving species-alienation a specifically capitalist social form. But the opacity Marx treats as alienating characterises large-scale specialised coordination more generally; capitalism gives it the form of wage labour and exchange, but Marx has not shown that this form, rather than mediated coordination under scarcity, is what alienates.

Bibliography

Avineri, S. (1968). The Social and Political Thought of Karl Marx. Cambridge University Press.

Elster, J. (1986). An Introduction to Karl Marx. Cambridge University Press.

Hayek, F. A. (1945). The Use of Knowledge in Society. The American Economic Review, 35(4), 519-530.

Herre, B. (2024, September 4). Working hours in wealthy countries have been reduced by half over the last 150 years. Retrieved from Our World in Data: https://ourworldindata.org/data-insights/working-hours-in-wealthy-countries-have-been-reduced-by-half-over-the-last-150-years

James, D. (2021). Practical Necessity, Freedom, and History: From Hobbes to Marx. Oxford: Oxford University Press.

Marx, K. (1992). Capital: A Critique of Political Economy: Volume 3. The Process of Capitalist Production as a Whole (Vol. 3). (D. Fernbach, Trans.) London: Penguin.

Marx, K. (1994). From the Paris Notebooks (1844). In J. O’Malley (Ed.), Marx: Early Political Writings (pp. 71-96). Cambridge: Cambridge University Press.

Marx, K. (2000). Wage Labour and Capital. In D. McLellan (Ed.), Karl Marx: Selected Writings (pp. 273-294). Oxford: Oxford University Press.

Mises, L. v. (2007). Human Action: A Treatise on Economics (Vol. 3). (B. Greaves, Ed.) Indianapolis: Liberty Fund.

OECD. (2024). OECD Pensions Outlook 2024: Improving Asset-backed Pensions for Better Retirement Outcomes and More Resilient Pension Systems. Paris: OECD Publishing. doi:https://doi.org/10.1787/51510909-en

Sayers, S. (2011). Marx and Alienation: Essays on Hegelian Themes. Basingstoke: Palgrave Macmillan.

Smith, A. (1983). The Wealth of Nations: Books I-III. Harmondsworth, Middlesex, England: Penguin Books.

U.S. Securities and Exchange Commission Staff. (2025, August 12). SEC Statistics & Data Visualizations | U.S. Households’ Participation in Capital Markets. Retrieved from SEC.gov: https://www.sec.gov/data-research/statistics-data-visualizations/us-households-participation-capital-markets

Wills, V. C. (2024). Marx’s Ethical Vision. Oxford: Oxford University Press.

Wood, A. (1981). Karl Marx. London: Routledge & Kegan Paul.

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Mark: 78% (Lower Mid 1st)

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To answer the question, the essay needs to demonstrate an understanding of Marx’s theory of alienation. This may be done by explaining all four forms of alienation or by focusing on one or two of them. A good answer to the question will relate the concept of alienation to the concept of objectification. The essay should, moreover, discuss whether there is a necessary connection between alienation, as Marx understands it, and capitalism. The essay should here construct an argument in defence of a clearly stated thesis.

This is a sophisticated and knowledgeable answer to the question that satisfies all these requirements. You make some important distinctions, such as the one between externalisation/objectification through labour more generally and the specific alienated form that it, for Marx, assumes under capitalism. I found especially effective how instead of just summarising each of the four types of alienation, you integrate them into a single unified account of alienation by identifying a problem that arises with one of them that requires then moving to the next one. Although you adopt a critical perspective, providing some good reasons for claiming that Marx fails to demonstrate either that capitalism necessarily produces alienation or that alienation is specific to it, you at the same time carefully reconstruct Marx’s position in a way that seeks to make it as cogent as possible. Thus the essay is balanced in its approach. It also achieves a good balance between primary and secondary sources. Please also see my comments to the essay itself [added here as footnotes].

Advice on how to improve for future assignments:

Given the high mark, I have no meaningful advice to offer.

In the Second Essay of the Genealogy of Morals, Nietzsche inquires after the origin of “bad conscience” – not ordinary remorse, but the condition whereby persons make themselves suffer, interpret that suffering as deserved, and experience guilt as a standing verdict on themselves. I read his account as having four layers. First, humans acquire conscience by becoming capable of making promises and assuming responsibility. Second, obligation is organised through the creditor–debtor relation, which supplies a pre-moral grammar of guilt. Third, under socialisation, outward aggression is turned inward, producing non-moralised self-torment. Finally, this inward suffering is moralised through the extension of indebtedness to ancestors and then to God, becoming existential guilt. I argue that this final stage requires not the Christian God specifically, but a transcendent, condemnatory reference point: an anti-natural ideal before which the self’s whole existence appears deficient. So read, Nietzsche’s account is philosophically plausible: it explains how guilt becomes guilt for being what one is, and why that structure of self-condemnation can outlive the theology that first gave it its most concentrated form.

Nietzsche dispenses with the obvious hypothesis, that human beings became guilty because they were punished for wrongdoing, on methodological grounds. He maintains that the origin of a practice and its later meaning are not the same thing: something that has come into existence can be “reinterpreted to new ends” and made to serve purposes unrelated to its original ones. Thus, the fact that punishment is now often interpreted as serving retribution, deterrence, rehabilitation, moral condemnation, and so on, does not mean that it originated for any of those purposes (GM II.12-13). Accordingly, one cannot assume that punishment produced guilt, or that bad conscience first arose from the experience of being punished.

One might criticise this as a licence for speculative storytelling. But the method has a clear negative use: by separating a practice’s origin from its later utility, Nietzsche prevents us from projecting guilt back into practices that did not presuppose it (Leiter, 2002, pp. 168-169). Moreover, Nietzsche advances a plausible positive argument for denying this hypothesis – that punishment often makes people cautious rather than remorseful: the punished person thinks “something has unexpectedly gone wrong,” not “I ought not to have done that” (GM II.14-15). Thus, Nietzsche’s claim – that we must begin with the origin of conscience before it becomes bad – is plausible.

This origin lies in the “paradoxical task” of breeding “an animal with the right to make promises” (GM II.1). Human beings are naturally forgetful, but promise-making requires a “memory of the will”: the capacity to hold oneself to a future commitment despite this, and so to become sufficiently regular and capable to answer for oneself. This capacity had to be bred into humans through custom, pain, and social regularisation. The result is the “sovereign individual”, whose “proud awareness” of responsibility has become instinct, and who calls this instinct his “conscience” (GM II.1-3).

One might object that this is irrelevant to bad conscience, since the “sovereign individual” is proud, not guilty. But as (Reginster, 2011, pp. 70-72) stresses, the right to make promises is status-conferring, because the sovereign individual derives esteem from the durability of the will; thus, failures of commitment can bear on his worth as a person (Ridley, 1998, p. 15). This makes Nietzsche’s account more plausible, since instead of deriving guilt from cruelty, he first supplies responsibility, standing, and self-evaluation as the preconditions for guilt.

Bad conscience is thus not the essence of conscience itself; it requires the redirection of this capacity for responsibility. Nietzsche locates this redirection in the creditor–debtor relation. He uses the etymological link between Schuld (guilt) and Schulden (debts) to argue that moral guilt has a pre-moral ancestry in owing. In primitive contractual relations, a debtor’s failure to repay authorises compensation; where no material equivalent is available, this liability may be discharged through suffering, so that the creditor receives compensation in the pleasure of making the debtor suffer (GM II.4-6). This links suffering to payment, making self-punishment appear deserved.

Taken crudely, this looks weak: an etymology cannot establish a psychology, and a primitive debtor would more likely fear default than regard himself as morally reprehensible. But Nietzsche’s argument is not that debt is already moral guilt; it is that debt provides the pre-moral grammar out of which guilt could later be formed. He can therefore concede that guilt, since it concerns a diminution of one’s worth as a person, cannot be reduced to fear of punishment (Reginster, 2021, pp. 139-40). Hence, the creditor–debtor relation supplies a conceptual ancestry for guilt without committing Nietzsche to the implausible thesis that primitive contractual life simply taught human beings to feel morally guilty.

Since debt explains liability but not self-condemnation, the next stage is Nietzsche’s “own hypothesis” about bad conscience proper. Once human beings are enclosed within “society and peace”, their aggressive instincts are blocked from external discharge, and turn inward. This “internalisation of man” produces an inner world deep enough to become an object of its own cruelty. Bad conscience, in this form, is thus the suffering of the human animal from itself: the instinct for freedom, blocked by social life, takes the self as its object and makes it into “resisting, persecuted, suffering” material.

Two objections may be raised. First, Nietzsche’s account “depends crucially on the premise that instinctual energy does not simply vanish: it must be continuously discharged somehow” (Leiter, 2002, p. 234), but this premise is suspect: frustrated hunger and thirst do not become self-torment, or “turn inward”, but simply go unmet. Second, even if the internalisation of aggression is plausible, it does not explain guilt. The fact that a drive is redirected against the self does not show why the resulting suffering should be interpreted as deserved, or why the self should regard itself as morally blameworthy.

The first objection is forceful against a crude hydraulic thesis about all instincts. However, Nietzsche only needs the narrower claim that frustrated aggression can seek displaced, even self-directed, outlets. Hunger and thirst may simply remain unsatisfied, but it is psychologically plausible that drives toward cruelty and domination seek substitute objects when their ordinary outward discharge is blocked. The second objection, however, should be conceded; this “internalisation thesis” still underdetermines guilt. As (Risse, 2001, pp. 58-59) argues, Nietzsche here presents us with a non-moralised, “older form” of bad conscience, genealogically prior to guilt, in which what is “bad” is the painfulness of inward cruelty rather than any verdict of moral fault. (Leiter, 2002, pp. 232-235) similarly distinguishes this “animal bad conscience” (GM III.20) from bad conscience proper. Internalisation explains how human beings become capable of self-torment, but not why self-torment comes to appear deserved. That requires the further thought that one is a “legitimate recipient of cruelty” (Janaway, 2007, pp. 136-137).

Nietzsche locates this final step – the moralisation of suffering – in the extension of the creditor–debtor relation first to ancestors, and then to God. He argues that communities come to understand themselves as indebted to the sacrifices of their forebears; as the community’s power grows, its ancestors are magnified, until they are finally transfigured into gods (GM II.19). With the Christian God, “the maximum god attained so far”, there arises the maximum feeling of indebtedness (GM II.20).

Here, the account may appear inconsistent: Nietzsche gives two seemingly rival explanations of guilt, one from internalisation, the other from debt to God. But as (Janaway, 2007, pp. 132-134) rightly argues, the two strands are complementary elements of a single synthesis. Internalised cruelty becomes guilt when it co-opts the creditor–debtor structure: inward suffering “borrows” the legitimating form of punishment, so that the self not only suffers, but takes itself to be the rightful object of suffering. Thus, divine debt is not automatically guilt; rather, debt is “pushed back” into bad conscience and becomes “an instrument of torture” (GM II.21). Hence, Christianity supplies an interpretation under which the whole self can become guilty: inward suffering is construed as deserved punishment before an infinite creditor.

Although Nietzsche does not present the genealogy so schematically, this four-stage reading preserves its plausibility by treating its aspects as cumulative. Promise-making explains responsibility without guilt; debt explains liability without inwardness; internalisation explains self-torment without desert; and divine indebtedness supplies the framework in which self-torment can appear deserved. This fits Nietzsche’s methodological claim that historical phenomena arise through successive reinterpretations rather than single origins (GM II.12).

On this reading, however, it seems that this account must depend on Christianity, which would render it both historically narrow and philosophically implausible. If guilt requires God, Nietzsche’s account becomes confined, as (Ridley, 2005, p. 35) objects, to “quite narrowly theocratic contexts”, rather than illuminating moral consciousness more generally. Accordingly, (Ridley, 2005, pp. 37-38) argues that guilt must already be available before Christianity: on his reconstruction, debt becomes guilt when the debtor interprets his indebtedness as freely incurred, thinks, “I ought not to have done that,” and takes his action “as such” to be reprehensible.

This account has two attractions. First, it captures an ordinary sense of guilt that (May, 1999, p. 77) calls “an experience of reprehensible failure”, making Nietzsche’s account more plausible insofar as it captures a broader psychological phenomenon than specifically religious guilt. Second, it fits Nietzsche’s claim that the man of bad conscience seizes on God as an instrument for making his own unworthiness certain, which suggests that the self-condemning tendency is already present before its theological intensification (GM II.22). Moreover, it explains why Nietzsche can imagine redirecting bad conscience against life-denying ideals themselves (GM II.24): guilt cannot always depend on explicit belief in God if it can be felt toward temptations to God, nature-denial, or the beyond.

(Risse, 2005, pp. 46-47) responds by distinguishing “locally-reactive guilt”, which he defines as a response to particular failures, from “existential guilt”, “a condition that shapes one’s whole existence”. Nietzsche’s target is the latter – in (GM II.21), he says that he has “deliberately ignored” the moralisation of debt and duty, which would be unnecessary if full guilt had already been explained by internalisation and debt. Ordinary debts are, in principle, payable; but when the creditor is the Christian God, indebtedness becomes structurally inexpiable. The result is not guilt for a particular deed, but guilt for being the kind of creature one is: the debtor wills himself “guilty and reprehensible to a degree that can never be atoned for” (GM II.22). So, if Nietzsche is explaining existential rather than local guilt, the final stage is necessary: only a standard before which one’s whole life appears deficient can explain guilt for being what one is.

If this is granted, the narrowness objection returns. Ridley worries that if belief in God is a condition of guilt, it becomes mysterious how guilt could survive the death of God. Since Nietzsche wants to explain how Christian valuations survive atheism, he must also explain “how the notion of guilt can survive the advent of atheism”. For Ridley, this is straightforward: guilt is a “logical condition rather than a logical consequence of belief in God”. But if God is a “conceptual prerequisite” of guilt, then “it is not at all obvious how the use of a concept might survive the removal of its own conditions of intelligibility” (Ridley, 2005, p. 42).

Risse replies that he is not explaining the “intelligibility of a concept”, but offering “a quasi-historical” account of how “a kind of moral psychology arose” (Risse, 2005, p. 48). Existential guilt may have arisen through the Christian God, and atheists – formed within a culture shaped by that inheritance – may have later inherited its phenomenology. So, Nietzsche’s account can remain plausible without losing its relevance to post-Christian morality: the death of God removes the explicit theological object, but not the psychic structure of self-condemnation formed under it.

This reply answers Ridley’s survival objection, but not the worry about narrowness. If the Christian God in particular is necessary for existential guilt to arise, Nietzsche’s account explains only how a distinctively Christian form of guilt can persist after belief weakens, not why structurally similar forms of self-condemnation might arise in non-Christian or only indirectly Christian contexts. Ridley is therefore wrong to remove God, or something like God, from the account altogether, but right that Nietzsche’s account is implausible if tied too narrowly to Christian theism.

This objection can be overcome by generalising Risse’s reading: existential guilt requires not the Christian God specifically, but a transcendent, condemnatory reference point before which the self’s whole existence appears deficient. Risse’s formulation allows this, since existential guilt “presupposes a reference point vis-à-vis which one’s life is so experienced”, and he concedes that “other explanations of existential guilt are possible” (Risse, 2005, p. 46). Nietzsche’s text also points beyond Christianity, connecting the moralisation of debt to “existence in general” being considered worthless, nihilistic withdrawal from life, and “Buddhism and the like” (GM II.21). Christianity is paradigmatic, because it is most salient in Nietzsche’s culture and because it most powerfully fuses creator, creditor, judge and redeemer; but the general structure is broader. The plausibility of Nietzsche’s diagnosis therefore does not depend on the ubiquity of Christianity, but on the availability of comparably absolute ideals.

However, this generalisation must be restricted. A transcendent reference point explains existential guilt only when natural human life is made answerable to a standard before which it must fail. Otherwise, any culture with gods or ancestors would produce bad conscience, making the account implausibly broad. Nietzsche’s Greek contrast shows why this is false. The Greeks had gods, shame, punishment, and explanations of wrongdoing, yet their gods helped prevent guilt from becoming existential: error could be interpreted as folly, delusion, or divine interference, and the gods “took upon themselves, not the punishment but, what is nobler, the guilt” (GM II.23). What Christianity adds is not transcendence alone, but an anti-natural ideal before which the self’s own instincts appear culpable. So read, Nietzsche’s account is plausible: bad conscience arises when the self is condemned not merely for what it has done, but for what it is.

Hence, bad conscience emerges through a series of reinterpretations: the responsible will makes self-evaluation possible; debt makes suffering intelligible as payment; internalisation supplies self-cruelty; and religion gives that cruelty an apparently justified object. The strongest objection is that this makes guilt too dependent on Christian theism. But that can be met by distinguishing Christianity’s historical role from the broader structure it exemplifies. Read this way, Nietzsche’s account is plausible insofar as bad conscience requires not God as such, but an anti-natural, condemnatory ideal before which the self becomes guilty for being what it is.

Bibliography

Janaway, C. (2007). Beyond Selflessness: Reading Nietzsche’s Genealogy. Oxford University Press.

Leiter, B. (2002). Nietzsche on Morality. London: Routledge.

May, S. (1999). Nietzsche’s Ethics and His War on “Morality”. Oxford: Oxford University Press.

Nietzsche, F. (1967). On the Genealogy of Morals. In F. Nietzsche, & W. Kaufmann (Ed.), On the Genealogy of Morals and Ecce Homo (W. Kaufmann, & R. J. Hollingdale, Trans., pp. 1-163). New York: Vintage Books.

Reginster, B. (2011). The Genealogy of Guilt. In S. May, On the Genealogy of Morality: A Critical Guide (pp. 56-77). Cambridge: Cambridge University Press.

Reginster, B. (2021). The Will to Nothingness: An Essay on Nietzsche’s On the Genealogy of Morality. Oxford University Press.

Ridley, A. (1998). Nietzsche’s Conscience: Six Character Studies from the Genealogy. Cornell University Press.

Ridley, A. (2005). Guilt Before God or God Before Guilt? Journal of Nietzsche Studies, 34-45. Retrieved from https://www.jstor.org/stable/20717850

Risse, M. (2001). The Second Treatise in On the Genealogy of Morality: Nietzsche on the Origin of the Bad Conscience. European Journal of Philosophy, 9(1), 55-81.

Risse, M. (2005). On God and Guilt: A Reply to Aaron Ridley. Penn State University Press. Retrieved from https://www.jstor.org/stable/20717851

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Mark: 78% (Lower Mid 1st)

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This is a very good essay. Your reconstruction of Nietzsche’s narrative in GM II is careful, patient, and shows good knowledge of both the primary and secondary texts.

I think you are exactly right that Risse’s reading can be generalised, and the text you cite in support of this is probative. I am less certain whether you fully respond to the narrowness concern (at least in all its forms). One version of that concern, which you note, is that Nietzsche doesn’t give us an account of “locally-reactive guilt.” But the sort of generalisation of Risse’s account you have in mind seems to be to forms of “original sin” other than the Christian. That still seems to leave the objection unaddressed.

One further suggestion: instead of pausing your exposition to address objections as they arise, it might have been better here to get the interpretation on the table first, and then deal with the objections all together. This would make the paper read more naturally, but it is really just a stylistic point.

In §182, Hegel introduces civil society through two constitutive principles and the relation between them. The first is particularity: the individual as a determinate person pursuing his own satisfaction. The second is universality: the general form through which this pursuit must be mediated. Together, they establish that civil society is neither a mere collection of isolated individuals nor a community whose members take the common good as their end, but a sphere in which self-interested individuals are necessarily bound to one another.

The first principle concerns the "concrete person" — an individual taken with all his determinate content, with needs, desires, talents, and circumstances, rather than merely as an abstract bearer of rights. Such a person is a "totality of needs", shaped both by biological drives ("natural necessity") and contingent, malleable preferences ("arbitrariness"). These needs are not exhausted by survival; even basic requirements become differentiated by culture and preference, so that what counts as a need is partly a matter of opinion. This person is "his own end": his motivating purpose is the satisfaction of his particular needs.

Yet because those needs can be met only through the activity and products of others, this individual "stands essentially in relation to other similar particulars". The relation is essential, not incidental, because dependence on others inheres in the structure of need-satisfaction itself. Satisfaction occurs only through what Hegel calls the "exclusive mediation of the form of universality": there is no alternative path to realising one's ends except by operating within impersonal, general forms of interaction between people, which bind particular agents to one another. Hence "each asserts itself and gains satisfaction through the others": one advances one’s own welfare “by simultaneously satisfying the welfare of others” pursuing their own satisfaction, thereby producing reciprocal dependence.

This is why universality is the second constitutive principle. It is not merely the empirical fact of social coordination, but the form that particular willing must assume if private ends are to be realised at all. Because individuals can secure their welfare only through relations with others, their activity must pass through shared norms and institutions (later paragraphs specify that these include property and exchange). Universality is a "form" because it does not name the content of anyone's end — individuals are still pursuing private satisfaction — but rather the rule-governed structures within which those ends can be pursued1.

The paragraph's structure is therefore generative: particularity, left to itself, lacks the means of its own realisation; universality arises as the necessary shape of particular activity under conditions of interdependence. Accordingly, §182A describes civil society as "the stage of difference" between family and state — difference, because the immediate identification of individual and communal life characteristic of the family has dissolved, yet the self-conscious reconciliation of particular and universal characteristic of the state has not yet been achieved. Civil society presupposes the state as an already self-sufficient political order within which its own institutions can function; yet conceptually it represents only the "sphere of mediation", where individuals must act through the universal without yet willing it for its own sake.

§182 thus presents civil society as an incomplete unity: individuals pursue their own welfare, but must do so through universally mediated relations, so that the universal appears not yet as a shared end but as the necessary form of pursuing their private ends.

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Mark: 78% (Lower Mid 1st)

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This is arguably not one of the more difficult paragraphs to interpret and explain. Nevertheless, in addition to being very clear and comprehensive, this analysis of the paragraph provides some substantive independent explanation of it.

“What may now be meant by the word “liberal” is anyone’s guess.”

— Michael Oakeshott, Rationalism in Politics and Other Essays, pp.439–40

I. Introduction

I consider myself an intellectual heir to a liberal tradition stretching back centuries. Yet as Oakeshott suggests, the term “liberalism” has extended to cover such a wide and often conflicting range of positions that it risks losing any determinate meaning at all.

My claim is that liberalism nevertheless names an identifiable family of ideas: core principles that explain much of this variation, even if they do not encompass every view that travels under the liberal banner. This piece aims to clarify what I take to be liberalism’s first principles, to examine their historical and philosophical sources, and to trace their implications for economic and social life. In doing so, I hope to show why liberalism, as I understand it, is a genuinely attractive doctrine, one that addresses real and persistent problems arising from the human condition as it presently exists.

This is not an attempt to survey liberal theory in its entirety. Instead, I seek to reconstruct liberalism from the ground up: to identify the problem it aims to solve, to sketch the institutional form that responds to that problem, and to draw out the conceptual commitments implicit in those institutions. Along the way, I draw on key figures from the liberal tradition where their ideas illuminate the argument, while also rejecting (implicitly or explicitly) certain tempting but mistaken paths. My aim is not to adjudicate every intra-liberal dispute, nor to systematically engage counterarguments from within or outside the tradition, but to motivate and advance a particular account of liberalism. For that reason, some approaches commonly associated with liberalism — certain contractarian frameworks, for instance — receive relatively little attention here, on account of their limited influence on the version of liberalism I aim to defend.

II. Violence, Scarcity & The Problem of Plural Preferences

Human beings inevitably find themselves in a world with problems: states of affairs that fall short of how they would prefer things to be. Each individual therefore confronts aspects of the world whose modification would, from their own perspective, constitute an improvement. From this mismatch between the world as it is and the world as it is wanted arises a standing impulse to act upon one’s surroundings, reshaping outcomes so that they more closely track one’s preferences.

Yet individuals acting alone are remarkably impotent when it comes to reshaping the world. A solitary human being is not particularly strong, nor fast, nor knowledgeable1. Our strength as a species comes from our capacity for coordination, for pooling our knowledge and effort to achieve what none of us could accomplish alone.

Unfortunately, coordination is rarely straightforward, because people value different things. Even when our aims aren’t directly opposed, they still collide in practice since resources are scarce. Under these conditions, the potential for violence is built into human co-existence: when someone else’s actions frustrate your plans, or occupy resources you want, this creates incentives to coerce them to get your way. Violence “resolves” disagreement by removing the other party’s capacity to choose and act2.

When violence is available as a general instrument for settling conflict, social life tends toward a negative-sum equilibrium. If anyone can seize what others have produced, there is little reason to invest time and effort producing it. Worse, one’s limited time and effort must be spent protecting oneself from predation, rather than generating the social surplus that could advance everyone’s ends through productive cooperation.

III. The Hobbesian Patch

The modern state can be understood as an institutional response to this Hobbesian dilemma. By centralising and monopolising the use of force in a single, publicly recognised3 authority, it deprives individuals of violence as an instrument of bargaining. This Hobbesian “Leviathan” does not eliminate conflict or disagreement, but it changes the strategic environment in which they occur, by raising the cost of predation and lowering the need for constant self-defence. As a result, people can redirect their energy — for example, planting because they can now expect to harvest.

Once this institution exists, however, it commands extraordinary power: it is the lone entity permitted to deploy violence. To fulfil the purpose that motivates its existence, it must use that power to preserve its monopoly. When individuals use force against each other, the state may use force against them; and by definition, there is no further recourse beyond it, closing the loop of violence rather than allowing it to escalate.

Yet violence is not always negative-sum, so the utility of coercion is not exhausted by this narrow, self-maintaining rule. It can also serve as a useful, and arguably necessary, tool for other purposes: defence against external adversaries; enforcing contracts, so that promises can be relied upon, because breaches carry agreed-upon penalties neither party can legitimately inflict privately; and the protection of private property rights, whose stability rests on the credible threat that violations will be met with enforcement. Where these functions require violence, they must fall to the state.

One might infer from this the principle that whenever violence would be useful for solving a problem, the state may — or must — intervene to solve it. Hobbes leans in this direction: so long as the sovereign preserves peace, its authority is legally absolute, constrained by no higher court and no enforceable limit beyond its own judgement of the common good. But this principle is far too strong. If you are the only party permitted to wield violence, coercion becomes an unusually general-purpose instrument, capable of resolving not only disputes, but a wide range of practical obstacles, by compelling others to act in accordance with your aims.

If political authority is allowed to extend this far, and we accept that whoever controls the state can impose their will — whether justified by bare power or by contested claims about what is “good” — then control of the state becomes existentially valuable. The returns to sovereign power become unbounded, as those who possess it can privilege their own views and entrench their values over all others. The original problem of negative-sum conflict is not eliminated, but merely displaced, resurfacing at the higher level of struggle over who gets to direct the state’s coercive apparatus.

IV. From Rule by Command to Rule by Rules

Thus having succeeded in establishing a monopoly on violence, it immediately becomes necessary to place limits on what it can actually do. Otherwise, its absolute authority simply transposes us from the first-order problem of fighting over resources, to the second-order problem of fighting over the authority that decides resource use.

Indeed, one reason that centralising coercive power in a single entity is desirable is that it simplifies this task: if there were many sovereigns, each would need to be constrained separately. As it stands, there is only this one Leviathan to constrain. Rights, on this account, are one instrument of constraint. They mark out domains of individual action into which the state may not intrude, regardless of who holds power or what ends they wish to pursue. Norms, traditions, constitutions, and the separation of powers similarly function to limit how coercive authority may be exercised.

None of these constraints are discoveries of the natural order, deliverances of pure reason, or gifts from God. They are contingent social technologies, adopted because experience suggests they reduce the risk that concentrated coercive power becomes a vehicle for arbitrary domination. Their content is therefore shaped by circumstance: a right to healthcare, for instance, is unintelligible in a society that possesses no medical knowledge. What rights, norms, and institutional limits we recognise at any given time reflects the problems we confront and the solutions practically available to us.

The core proposition of liberalism, therefore, is this: that the state should be indifferent between different conceptions of the good life4. This is not the positive claim that all ways of living are equally admirable. Rather, it is a structural restraint on how collective force may be used. Given persistent disagreement about values and priorities, and given that the state’s distinctive instrument is violence, the relevant question is not which conception of the good is “true”, but which principles of political authority can be justified to people who reject one another’s ultimate ends.

For this reason, liberalism is naturally allied with the rule of law. The state exists not to command its citizens towards the good, but to govern by general rules under which each can pursue their own ends. Coercion, where necessary, must operate through stable and knowable procedures rather than ad hoc moral judgement, lowering the stakes of political victory and the incentive to treat government as a prize. Where the state instead acts as a moral executor — using force to realise a contested ideal — it recreates the Hobbesian dynamic it was meant to suppress, turning plural preferences into a fight for command. Liberalism, then, is the practical solution to the problem of living together when no one gets to be sovereign over everyone else’s values5.

V. Liberalism After Leviathan

This first-principles, bottom-up framing illustrates how liberalism as a set of institutional practices emerges as a solution to a second-order Hobbesian problem — that is, a solution to a problem generated by the solution to the Hobbesian problem. Historically, this settlement emerged from the European wars of religion, which exposed the need to prevent the state from enforcing contested faiths.

But from this practical solution, and from the reasoning behind it, we can extract a more general conceptual orientation, constitutive of liberal principles. These principles are not prior axioms from which liberal institutions are deduced; rather, they are abstractions distilled from institutional practice. Once articulated, however, they acquire a degree of normative independence, functioning as standards by which existing institutions can be evaluated, revised, or rejected. More precisely, reflecting on why liberal institutions succeed yields a criterion of evaluation grounded not merely in convention, but in the fact that their success appears to track something fundamental about the structure of human coexistence and cooperation6.

At the core of this orientation is the recognition of individuals as agents capable of forming, revising, and pursuing their own ends, rather than as mere instruments for the purposes of others. Because coercion operates by overriding an agent’s capacity to choose, its use demands justification. Rights, as previously described, are one institutional expression of this requirement, limiting what may be done to individuals in the name of collective aims. More broadly, they instantiate a prior idea of respect for agency, with the state supplying the coordinating framework within which those limits can be made mutually compatible among many agents with competing plans.

That said, nothing here requires the stronger Kantian thesis that political authority is constitutive of freedom itself, or that rights come into existence only through their legal enactment. Nor does it require, as Rawls does, that the state act solely on reasons all can affirm as correct. The constraint is instead structural: coercion is politically destabilising when it is justified by appeal to a contested ordering of ends.

Once this is acknowledged, the scope of restraint must be both universal and revisable. Universal, because it must apply to persons as such, rather than to members of particular cultures or traditions, since any selective standing would itself encode a disputed hierarchy of value. And it must treat institutions as corrigible, because fixing a single authoritative resolution to questions about the good would entrench one perspective against others, reintroducing the very conflict restraint is meant to contain.

This orientation accordingly gives rise to a recognisable cluster of commitments, articulated by John Gray in his 1998 book Liberalism:

It is individualist, in that it asserts the moral primacy of the person against the claims of any social collectivity; egalitarian, inasmuch as it confers on all men the same moral status and denies the relevance to legal or political order of differences in moral worth among human beings; universalist, affirming the moral unity of the human species and according a secondary importance to specific historic associations and cultural forms; and meliorist, in its affirmation of the corrigibility and improvability of all social institutions and political arrangements.

As the foregoing illustrates, these features are not independent moral postulates, but the conceptual residues of the attempt to govern a world of plural preferences.

VI. Applications To Economic & Social Life

These liberal principles have implications that extend well beyond the formal structure of the state. Applied to economic and social life, the liberal orientation enables us to extend the same anti-violence, pro-coordination logic into non-political domains.

In economic life, market exchange allows individuals to improve their situations by mutual consent, without requiring agreement on ultimate ends. For a buyer and seller to transact, they need not share a conception of the good life; they need only find terms acceptable to both. This mirrors liberalism’s core political insight: that coordination among agents with divergent ends is possible without resolving the disagreements7. Prices function as signals that coordinate the plans of millions of dispersed actors, none of whom needs to know more than their own circumstances.

This is Hayek’s central insight: the price system is a mechanism of decentralised communication, transmitting information about the relative scarcity of goods and the intensity of competing demands in a form that no individual or planning authority could aggregate on its own. Markets do not merely allocate known resources among known uses; they discover possibilities that were not previously apparent, as entrepreneurs experiment with new combinations and consumers reveal preferences through their choices. The liberal case for markets is thus an epistemological case: central planning fails not because planners lack good intentions, but because the knowledge required to coordinate an economy is dispersed, tacit, and constantly changing, and is therefore in principle unavailable to any single mind or institution.

In social life, too, liberalism provides a framework for peaceful coexistence under pluralism: a way of living together despite fundamental disagreement about how life should be lived, without resorting to force. If the state refrains from imposing a substantive vision of the good, individuals are free to pursue “experiments in living” — to try out different forms of life, to learn from each other’s successes and failures, and to discover8 for themselves the arrangements most conducive to their own flourishing, so long as they don’t harm others doing the same. The conditions under which people find and revise their own conceptions of the good — freedom of thought, freedom of association, freedom of expression, absence of enforced conformity — follow directly from liberalism’s commitment to non-coercive pluralism.

The economic and social applications of liberal thought are thus not separate doctrines bolted onto a political theory, but expressions of the same underlying logic. In each domain, the liberal insight is the same: that the dispersed, experimental, self-correcting processes made possible by individual freedom will, over time, generate outcomes superior to those achievable by centralised direction — not because individuals are infallible, but because decentralised systems are better equipped to detect and correct the errors that inevitably arise. For this reason, the liberal maintains that by binding coercion to general rules and leaving room for many ends to be pursued at once, we can turn the diversity of human aims from a standing cause of conflict into a renewable source of peaceful discovery and shared flourishing.

In §15, Hegel criticises a common conception of what it means to have free will, namely that to be free is simply to be able to choose among options – “to do as one pleases”. He calls this kind of freedom “arbitrariness”, and argues it contains two components.

The first is the capacity to step back from any determinate impulse and to regard oneself independently. In this reflective stance, no specific desire or end has binding authority over one; it can always be set aside, and one can choose whether or not to identify it. The second is “dependence on an inwardly or externally given content and material”. Even if one can abstract from every specific inclination, to will is always to will something determinate. Yet this material – drives, preferences, social norms – is not generated by the will’s own rational activity; it is encountered rather than self-produced.

Hegel notes that these two factors stand opposed. Because reflection can withdraw from any given content, each candidate end appears as merely possible, just one option the agent could equally have rejected; yet because the will requires determinacy, some content must be taken up. This double status leads Hegel to conclude that “arbitrariness is contingency in the shape of will” – the selection cannot be grounded in the will’s universal form, but is instead settled by whichever given motives happen to move the agent.

The connection between the choosing agent and what it chooses is therefore accidental rather than rationally grounded. Arbitrariness is accordingly not yet genuine freedom: reflection provides1 the will’s “abstract certainty” of freedom, the felt assurance that one is not compelled, since one could always choose otherwise. But it is “not yet the truth” of freedom, since the will remains dependent on content it has not itself determined.

This mismatch between the indeterminacy of the subjective side (the choosing “I”) and the determinacy of the objective side explains why Hegel calls arbitrariness a contradiction. It promises self-rule, the ability to determine oneself, but delivers dependence – one is steered by whatever content happens to grip me2. It may contain a moment of independence, formally infinite in its capacity to negate any given content, but its actual direction remains governed by finite material.

Hegel therefore holds that determinism has a genuine point against the advocate of arbitrariness: if only the formal moment of choosing originates within the self, while the content that actually directs it is merely encountered, then the will is not self-determining in any robust sense. This is why it is a “delusion” to identify arbitrariness with freedom. The Wolff-era controversy about whether the will is free largely presupposed this defective model, and Hegel thinks that much post-Kantian “reflective philosophy” repeats the same error by reducing freedom to formal self activity – an empty power of selection that leaves the end heteronomous3.

The upshot is that unrestrained choice must not be identified with freedom. Arbitrariness captures only a negative moment – the capacity to abstract from any given content – without providing the positive condition of freedom’s truth. Genuine self-determination would require the will’s content to derive from its own rational nature: the will must have its own rational form as its content, object, and end – as in art, where the best work is not arbitrary but “had to be so” – rather than a contingent given.

Result

Mark: 78% (Lower Mid 1st)

Feedback:

This is an excellent analysis of the chosen paragraph. You not only identify the key claims and explain them, but also establish adequate distant between your mode of expression and Hegel’s, thereby avoiding the danger of mere paraphrasing. There are some comments to the analysis itself, but they concern only finer details and interpretative issues [added here as footnotes].

I.

I’ll begin by confessing to some equivocation. In my exposition and defence of prediction markets, I made an argument inspired by Hayek’s famous 1945 article, The Use of Knowledge in Society: that the strength of markets lies in their ability to incentivise the collection of information dispersed across individuals, and aggregate that information in price signals. Hayek was concerned with ordinary markets for goods and services, but my argument has been that prediction markets extend the same epistemic logic to beliefs about the future. But what kind of information would we need to aggregate, exactly, in order to usefully predict the future?

For Hayek, the price system allocates resources more effectively than any central planner could, by aggregating “the knowledge of the particular circumstances of time and place” — the local, often inarticulable, rapidly changing information about what people want (their subjective valuations); what resources and inputs are available where and in what condition; current production possibilities and bottlenecks; and the relevant opportunity costs. Prices transmit this diffused knowledge as signals of relative scarcity2, letting decentralised actors coordinate without anyone knowing the full underlying detail. Such tacit, practical knowledge is diffused across millions of individuals, and usually not written down — take the shopkeeper who knows what customers in their neighbourhood want this week — so a central planner cannot make use of it3, and thus cannot rival the adaptive efficiency of the market process.

Notice that the epistemic logic here depends on a specific ontology of knowledge — namely tacit, local, context-specific, and immediately actionable information about real resources and preferences. Crucially, it seems to presume that the relevant knowledge is already present, scattered across the minds of many individuals, waiting to be aggregated. The same logic underlies the Galtonian story from §1: the true weight of the ox had, in a sense, already leaked into the crowd — fragments of relevant knowledge were scattered among the villagers, converging to a remarkably accurate median estimate — and it simply needed to be extracted.

This invites the natural question: to what extent do anticipatory beliefs about the future have this structure? Or in other words, how leaky is the future to the present?

II.

Consider as a motivating example the case of Knightian uncertainty, a situation in which the relevant outcomes and their probabilities are not merely unknown but indeterminate, so that no coherent ex ante probability distribution can be assigned. Economist John Maynard Keynes has beautifully explained the concept4:

By “uncertain” knowledge, let me explain, I do not mean to distinguish what is known for certain from what is only probable. The game of roulette is not subject, in this sense, to uncertainty […] The sense in which I am using the term is that in which the prospect of a European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the obsolescence of a new invention, or the position of private wealth-owners in the social system in 1970. About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know. Nevertheless, the necessity for action and for decision compels us as practical men to do our best to overlook this awkward fact and to behave exactly as we should if we had behind us a good Benthamite calculation of a series of prospective advantages and disadvantages, each multiplied by its appropriate probability, waiting to be summed.5

Evidently, if the information we are seeking is like one of Keynes’ examples, then although the probability implied by a market price may be “better than nothing”, the error bars around it are enormous. In such cases, the marginal gain in precision from aggregating many uncertain guesses may not justify the cost of elicitation; there’s just too little dispersed knowledge that the market might usefully aggregate.

Even if one does not fully accept this notion of radical Knightian uncertainty6, with its unquantifiable probabilities, the argument nonetheless suggests an important lemma: it is often not that valuable to just aggregate all information readily available to market participants. If we want to estimate the likelihood that a radically new project succeeds, the manager’s best guess may be less accurate than the crowd’s; but if both arise from the same basic uncertainty, the expected informational surplus of pooling their decentralised judgments is unlikely to justify the coordination costs involved.

III.

I am not just making the boring and obvious Coasean argument that “[t]here is a cost of using the price mechanism” that might outweigh the informational benefits of prediction markets, leading organisations to prefer direct managerial judgement whenever it is cheaper7 — though this remains an important consideration, to which we will return. And I am certainly not making the boring and wrong argument that the future is so inscrutably uncertain that it’s pointless trying to reason probabilistically about it; that would ignore the clear forecasting success of financial markets.

The real point is subtler. Recall that our original question was the extent to which the future leaks clues about its own development to the present. What we have seen is that in many domains, it fails to supply such clues to anyone’s mind; there is little dispersed private knowledge for prices to aggregate. So if prediction market prices only aggregate what is already known, in the way Hayek (1945) describes, their usefulness will be constrained by the poverty of the underlying knowledge set.

But is that, in fact, all market prices do? This assumption neglects the crucial insight of a very different thinker8 to Hayek (1945). I refer of course to Hayek (1968), whose piece Competition as a Discovery Procedure reframes the market not as a device for transmitting a given stock of dispersed knowledge, but as a process that generates new knowledge through competitive experimentation. Whereas the 1945 essay shows how the price system enables coordination despite no individual possessing “the” data set, the latter work emphasises that the data set itself is not “given” in advance. Rather, market competition is an experimental process that creates knowledge: it directs attention, incentivises costly search, and forces entrepreneurs to form conjectures, then subjects those conjectures to an evolutionary process of trial and error, in which unsuccessful hypotheses are pruned through imitation and selection. Markets, in other words, are not only mechanisms for aggregating what people already know, but institutions that enable us to discover what nobody yet knows.

My claim will be that prediction markets are typically most valuable when they are not just aggregating dispersed knowledge, but when they actually succeed in financing and incentivising this process of knowledge discovery.

IV.

I am being ironic when I call this later Hayek a “very different thinker”. Although one could see this move as assigning markets two distinct functions — an aggregation function and a discovery function — it is more illuminating to understand the 1968 essay as a generalisation of the 1945 one. The earlier piece is about how markets aggregate information that exists in people’s minds, usually as tacit knowledge; the latter is about how markets aggregate information that is latent in the environment but perhaps not yet known, by providing incentives to unearth and incorporate it.

Having understood the 1968 move in this way, we can now return to our core framing, in which the central question is “how leaky is the future to the present, and where do the leaks show up?”. By sketching a taxonomy of “leakiness”, we will be in a better position to understand the domains in which prediction markets are likely to succeed.

At one extreme lies what we might call “mind-leaky” domains, situations in which relevant information leaks copiously and continuously into individual experience. For example, in supply-chain and retail contexts, dispersed actors observe shipment delays, changing input quality, or local demand fluctuations. Clearly markets excel in these domains, because they can efficiently pool what people know tacitly and observe locally into informative price signals.

At the opposite extreme lies the case of Knightian uncertainty discussed above. This is the limiting form of a broader class of “non-leaky”, or even “adversarially leaky”, domains. Sometimes9 the world does not contain stable, exploitable structure that maps present evidence to future outcomes; or the relevant causal pathways are so underdetermined that any model is mostly projection; or the information is strategically concealed and the observable signals are mostly noise or propaganda.

Prediction markets are ill-suited to both extremes. Most forecasting questions do not lie near the first extreme — except in limited cases, such as someone having insider information on a decision which is not yet public, future events are never directly observed or known in advance. And at the non-leaky end, market prices can always be formed — as one can always compress one’s uncertainty into a subjective probability — but as noted earlier, Coasean constraints quickly bind. While markets will provide a better forecast than alternative institutions10 (since they can incorporate their judgements), in non-leaky domains, the final probability estimate is too noisy11 for the marginal improvement to justify the costs of running and subsidising the market.

In between these poles lies a large class of domains which are “environment-leaky”, but mind-opaque. Here the future does leak information to the present, but not in the form of ready-made beliefs or local observations sitting in anyone’s head. The clues are instead “out there”, in the form of scattered data, weak correlations, and partial analogies that only become informative after someone does the work of extracting and synthesising them. In such settings, the market’s distinctive contribution is to create a competitive setting in which it is worth doing this hard epistemic work. This is the region in which prediction markets are most valuable, as they reward those who can translate these environmental traces into forecasts12 and make bad models costly to sustain, thereby endogenously selecting and amplifying methods that track reality.

V.

At this point, the reader may feel that the preceding taxonomy has been a digression. After all, if markets both aggregate existing knowledge and generate new knowledge, then why worry about whether the future is “mind-leaky” or not? Even if no individual already possesses the relevant information, can’t prediction markets simply lean on their capacity for discovery — rendering distinctions about leakiness largely irrelevant?

What this leaves out is how the process of market discovery actually works in practice. Although I have so far described it in abstract terms — conjectures, experimentation, selection — in real markets, this process is mediated by a very concrete institutional mechanism: specialisation and division of labour. This matters little if markets are only aggregating what is known, since anyone already possessing information has an incentive to trade on it. But discovery is not driven by diffuse marginal improvements; it depends on asymmetric investments by a subset of participants in model-building, data collection, hypothesis testing, and method development, and so forth. Prices then act as a selection mechanism over these heterogeneous epistemic strategies.

This dynamic is starkly visible in public financial markets, which we have repeatedly used to motivate the claim that prediction markets can attain informational efficiency. Because these markets are large, liquid, and continuously active, they can sustain an entire ecology of full-time discovery — analysts, quants, short-sellers, data-vendors — all competing to extract weak signals from the environment and turn them into tradable beliefs. Asset prices are the result of intense competition among specialised actors, including quantitative funds fitting statistical models, discretionary traders forming macro narratives, industry experts tracking regulatory minutiae, and so on.

This works better than simply commissioning some designated expert to produce a model, not only because of the familiar advantages of skin in the game, but because the market is itself a mechanism for recruiting, organising, and filtering expertise. By attaching rewards to predictive accuracy, it attracts effort from whomever is best positioned to extract signal, and places them in a competitive environment. In effect, it can assemble a small research community oriented around the question — an ad hoc academia whose membership and methods are determined by performance.

VI.

The metaphor of an “ad hoc academia” is, regrettably, not mine. It’s a phrase Arnold Brooks used on a Minds Almost Meeting podcast episode with Robin Hanson and Agnes Callard on polls versus prediction markets, to gloss a conceptual distinction Hanson drew there. He separates raw data, such as polls, from forecasts built from that data — like Nate Silver’s models, or an academic paper — and from the forum in which forecasts are disputed, like a prediction market or an academic field or journal.

But in that discussion, it comes out as13: “we can turn our managers into a little mini ad hoc academia that will aggregate this information.” The implied picture is of a fixed set of insiders, repurposed as forecasters, whose dispersed views are distilled into a price — so the market functions mainly as an internal communication system, only marginally superior to other communication systems, through which pre-existing knowledge is transmitted. In that frame, scale helps by adding noise traders, whose uninformed trades create incentives for the informed to reveal what they know14.

But as we have seen, the benefits of a marginally better communication system are often small. The deeper value of markets lies in discovery, and once that more general frame is adopted, the benefits of scale come with an extra requirement: that the market can select who does epistemic work. Different people are differently positioned to extract signal from the environment, and doing so is itself a specialised skill. If the “academics” are chosen in advance, the selection mechanism disappears, and with it, much of what prediction markets are supposed to be buying you.

Thus, the framework I have developed makes clear why the mechanism by which prediction markets deliver value collapses inside firms. Internal markets are typically closed to outsiders, and insiders are already specialised in their operational roles; investing in becoming good at internal prediction competes with the job they are hired, evaluated, and promoted to do. Lacking openness, liquidity, and a population for whom discovery itself is a viable specialisation, such markets cannot sustain the ecology of epistemic competition that makes large public markets informative.

VII.

We have now answered the motivating question. Prediction markets are not more widely used because in many settings, the expected benefits of sponsoring one are small relative to the costs. Aggregating what is already known can be done far more cheaply, with results that are not much worse — because when forecasting the future, there is little readily available information. And while specialisation in goods markets emerges almost automatically, limited scale in many prediction markets, and the opportunity cost of forecasting effort within them, make it difficult to sustain the specialisation and division of epistemic labour needed to discover new information.

Seen in this light, at least some of the underuse of prediction markets does not require the kind of explanation Robin Hanson has offered, in which people profess to value accuracy and good decision-making while in fact pursuing hidden social or political motives15. Firms may not be perfectly rational, but they are profit-maximising entities; the reason they do not use prediction markets is that there is no competitive advantage to be gained from doing so. Indeed, Google has twice experimented with internal prediction markets16, and neither experiment ultimately endured, suggesting that the obstacle is not a reluctance to experiment, but a structural impediment.

If my diagnosis is correct, the practical path forward looks quite different from what Hanson’s account would suggest. Rather than fighting an uphill battle to overcome organisational and status quo bias inside firms, advocates should focus on domains where prediction markets have a comparative advantage: large-scale, high-stakes questions where substantial resources can be mobilised to support specialised epistemic labour. This points towards public rather than private applications — macroeconomic targets for central banks, fiscal projections by institutions like the CBO and OBR, or the ex ante evaluation of major policy interventions. In these cases, the Hansonian explanation regains some force: public actors like governments, central banks, and international organisations lack a profit motive, making it more plausible that they fail to adopt prediction markets despite their potentially large social value.

The discussion in this piece has deliberately remained abstract and theoretical, apart from these tentative gestures at what will follow. In the next section17, we will develop these suggestions in more detail by applying the preceding analysis to empirical case studies, spelling out the predictions the framework generates, and using them to derive recommendations for how advocates of prediction markets should proceed.

We study whether the gender of a child’s only co-resident sibling affects academic achievement among 11, 13 and 15 year olds in Austria. Using three waves (2006, 2010, 2014) of the Health Behaviour in School-Aged Children survey, we restrict attention to two-child households and estimate OLS models with school-clustered standard errors and rich demographic controls. Having a brother rather than a sister has an estimated effect of −0.002 standard deviations, with tight confidence intervals around zero, and we find no differences by gender or for same-sex versus opposite-sex pairs. Overall, sibling gender appears irrelevant for academic outcomes in this setting.

Introduction

Family characteristics have long been linked to children’s development (Sharpe and Curwen, 2024). Sibling spillover effects have become a prominent research topic only recently (Ferreira, 2023). Siblings may assist with schoolwork or affect motivation and emotional well-being, influencing academic outcomes (Kipp, 2015). One might expect sibling gender to matter, shaping role models, parental investment, or gendered expectations, yet evidence is mixed: some studies find effects that vary by race or birth order (Eirich, 2010; Zang et al., 2023), and Troesch et al. (2018) report stronger spillovers in same-gender pairs.

Using Austrian HBSC data, we estimate the causal effect of having a brother rather than a sister on perceived academic achievement. Focusing on two-child families, we exploit the quasi-random “biological lottery” of sibling sex and estimate OLS models with controls for demographics, family structure, socioeconomic status, and survey-year fixed effects.

Data

Dataset

We use the 2006, 2010 and 2014 Austrian waves of HBSC, a school-based survey of pupils aged 11, 13 and 15. Questionnaires cover health, family background and school experiences. We pool the three waves to increase precision.

Sample Selection

We retain respondents with non-missing data on sex, age, number of siblings in the main home, perceived academic achievement and perceived family affluence. To define a clear treatment, we restrict to pupils living with exactly one co-resident sibling and construct an indicator Brother = 1 if that sibling is male. We also record how many biological parents (0,1 or 2) live at home. Perceived achievement is reported on a four-point scale; we reverse it so higher values mean better performance and standardise it. Our final sample contains 5,215 pupils.

Descriptive Statistics

Table 1 shows that 51.2% of respondents are girls, mean age is 13.3, and pupils live with 1.8 biological parents on average. Perceived family affluence averages 2.1 on a 1-5 scale, where higher values indicate lower affluence. Among those with one sibling, 50.9% have a brother (Table 2). By construction, the standardised achievement measure has mean zero and unit variance, with values ranging from about-2.25 to 1.50 (Table 3). Overall, the sample is balanced by gender and displays sufficient variation in sibling gender and family background.

Empirical Analysis

Methodology

Estimation Equation

We study the effect of sibling gender on the standardised perceived academic achievement 𝑌𝑖𝑠 for child 𝑖 in school 𝑠. Our main specification is:

where Brother𝑖𝑠 = 1 if the child’s only co-resident sibling is a brother; 𝑋𝑖𝑠 is a vector of individual and family controls, including age, gender and dummies for the number of co-resident parents and perceived family affluence; and 𝛿𝑡(𝑖) are survey-year fixed effects (2006, 2010, 2014). We estimate OLS with standard errors clustered at the school level. We also estimate (i) an otherwise identical model with SameSex𝑖𝑠 (an indicator variable for one’s co-resident sibling being the same sex) as the treatment, and (ii) separate regressions for boys and girls.

Identification Strategy

Our estimand is the average causal effect of sibling gender on perceived academic achievement among children in two-child families. Restricting to pupils with exactly one co-resident sibling avoids confounding gender composition with sibship size and birth-order structure. Under the “biological lottery” argument, sibling sex is approximately random: conditional on covariates and survey-year effects,

so 𝛽1 captures the causal effect of having a brother rather than a sister. The same reasoning applies when the treatment is SameSex𝑖𝑠.

Balance Table

We assess this quasi-randomness with a balance check; predetermined characteristics should be balanced across the treatment and control group.

Table 4 shows that children with brothers and sisters have similar means for age, gender, family structure and perceived family affluence; the same holds for same-sex versus opposite sex sibling pairs. Regressing each characteristic on the treatment indicator and survey-year dummy yields statistically insignificant differences, consistent with approximate random assignment.

Limitations

Exogeneity may not hold perfectly. Fertility stopping decisions (e.g., a preference for “one boy, one girl”), unobserved attitudes to education, and the absence of parental education in our data could generate subtle selection in the two-child sample. We therefore interpret our estimates as approximately causal, applying specifically to Austrian two-child families observed in HBSC.

Model Specification

Achievement is reported on a four-category scale; we reverse and standardise it and estimate OLS, which is appropriate for approximately continuous ordered outcomes. Ordered probit gives similar results (see §3.4).

Controls include only predetermined or slow-moving factors: child’s age and gender, number of co-resident parents, perceived affluence, and survey-year dummies. These capture demographic and socioeconomic differences without conditioning on post-treatment outcomes.

Results Discussion

In the main OLS specification (Table 5), the estimated effect of having a brother rather than a sister is essentially zero (≈ −0.00SD) and far from significant: the standard error is about 0.03 and p-values exceed conventional thresholds. Replacing the treatment with a same-sex-sibling indicator (Table 6) yields similarly small, insignificant coefficients. Separate models for boys (Table 7) and girls (Table 8) also show no meaningful differences: point estimates are small, opposite in sign, and have overlapping confidence intervals.

These magnitudes are negligible. A one unit change in the standardised outcome equals a full standard deviation, and the 95% confidence interval around the main coefficient is roughly 0.05−0.06 SD. Even in the most favourable direction, having a brother instead of a sister would shift achievement by at most about five percent of a standard deviation, far less than one category on the original scale.

A concern with null results is low power. Given our standard error of about 0.03, the minimum detectable effect at the 95% level is approximately 0.05 standard deviations. The point estimate lies well within this bound, indicating the absence of an effect reflects a genuinely small or zero relationship rather than imprecision.

Extensions

We consider two extensions. First, allowing heterogeneity by child gender and same- versus mixed sex sibling pairs does not change conclusions: coefficients remain small and statistically insignificant, implying neither within-pair peer mechanisms nor gender-specific parental responses generate detectable differences in performance. Second, ordered probit models with the unstandardised reversed scale (Table 9) yield qualitatively identical results, with marginal effects near zero and high p-values. Together, the null effect of sibling gender on academic achievement is robust across specifications, heterogeneity splits and functional-form assumptions.

Conclusion

Using three Austrian HBSC waves for two-child households, we find no evidence that sibling gender affects perceived academic achievement: effects are essentially zero and even modest impacts can be ruled out. Thus, in two-child families, sibling gender composition is unlikely to be a useful policy lever; resources should target more powerful determinants such as socioeconomic disadvantage. Future research could examine other outcomes (time use, aspirations, well-being), replicate in other countries and family sizes, and study larger families using the share of male versus female siblings

Statement of Contribution

All members contributed equally to the paper.

Bibliography

[1] Sharpe, G. and Curwen, T. (2024). An Examination of the Importance of Gender and Sibling Characteristics on Academic Perceptions. Journal of Education and Human Development, 13(2), 78–90. https://doi.org/10.15640/jehd.v13n2a9

[2] Ferreira, J.P.R. (2023). Sibling Spillovers in Educational Achievement: Evidence from Tanzania. PhD thesis. https://www.novasbe.unl.pt/Portals/0/KnowledgeCenters/ Economics%20of%20Education/Teses/2023/TM_Joao_Ferreira_2023.pdf

[3] Kipp,A.J.(2015).The influence of sibling presence on grade point average. Theses, Dissertations and Capstones, Paper 924. https://mds.marshall.edu/etd/924

[4] Eirich, G. (2010). Educational Inequality Between Brothers and Sisters in the United States. International Journal of Education. https://doi.org/10.5296/ije.v2i2.521

[5] Zang, E., Tan, P. L. and Cook, P. J. (2023). Sibling Spillovers: Having an Academically Successful Older Sibling May Be More Important for Children in Disadvantaged Families. The American Journal of Sociology, 128(5), 1529–1571. https://doi.org/10.1086/724723

[6] Troesch, L. M., Ledermann, T., Jones, J. W. and Grob, A. (2018). School Engagement and Achievement in Sibling Pairs: Gender and Birth Order Matter. Journal of Relationships Research, 9, e19, 1–8. https://doi.org/10.1017/jrr.2018.18

[7] University of Bergen (2025). HBSC Data Management Centre. https://www.uib.no/en/ hbscdata/113290/open-access (Accessed 9 November 2025)

Result

Mark: 74% (Lower First)

Feedback: The paper is very well written, concise, and technically polished. The introduction motivates the question effectively, and the modelling choices are clearly justified. By restricting to exactly one co-resident sibling, the paper correctly exploits the quasi-random assignment of sibling gender within fixed sibship size. The identification assumption is explicit and supported with a balance table and regression-based balance checks, which is unusually thorough. Interpretation of results is particularly strong. The authors express effects in standard-deviation units and show what effect sizes the 95% confidence intervals can rule out. Mechanisms are examined via sex-specific estimates, and robustness is demonstrated using ordered probit models. . Overall, this is a very strong empirical exercise, though the presentation would be improved by avoiding pasted raw Stata output and instead formatting results into clean, readable tables.

I explain Nietzsche’s distinction between “noble” and “slave” moralities – their differing conceptual order, psychology, and typology – and the mechanism of their inversion, the “slave revolt in morality”.

Nietzsche identifies “noble” morality as the value system arising among those who experience themselves as powerful, healthy, and life-affirming – the aristocratic type whose evaluations spring from overflowing vitality. Though some read this as merely psychological, he is tracing its historical origins. He ridicules the ahistorical “English psychologists” (GM I.1-2) on the origin of moral judgements and defends his alternative with reference to etymology: “‘noble’, ‘aristocratic’ in the social sense, is the basic concept from which ‘good’ […] developed” (GM I.4).

Thus, in noble morality, ‘good’ is primary and affirmative: it was “‘the good themselves […] who felt and established themselves and their actions as good” (GM I.2). What they counted as good is condensed in Nietzsche’s equation, “good = noble = powerful = beautiful = happy = beloved of God” (GM I.7). Only after the noble “conceives the basic concept of ‘good’ in advance and spontaneously out of himself” does its antithesis, ‘bad’, emerge – a secondary label for those lacking his distinguishing qualities (GM I.11).

By contrast, “slave” morality originated among those unable to act on their impulses: “while every noble morality develops from a triumphant affirmation of itself, slave morality from the outset says No […]; and this No is its creative deed” (GM I.10). It begins by negating something external; ‘evil’ is its first moral category. Some interpret this as polemical emphasis, but Nietzsche’s philology shows it marks genealogical priority in concept-formation: the German schlecht (‘bad’) derives from schlicht (‘plain, simple’), whereas ‘evil’ (böse) supplies the primary, moralising predicate of slave morality (GM I.4).

Slave morality first reinterprets “the ‘good man’ of the other morality, precisely the noble, powerful man” as evil; only then does a counter-concept of ‘good’ arise. Like lambs who say, “‘these birds of prey are evil; and whoever is least like a bird of prey, but rather its opposite, a lamb – would he not be good?’” (GM I.13), the slaves define themselves as good by recasting weakness as virtue. Thus the conceptual order is inverted: noble morality runs from good to bad, slave morality from evil to good. Some interpret this as wholly descriptive; though primarily descriptive, Nietzsche plainly despises the excesses of the now-dominant slave morality. His stated aim is to move, not “Beyond Good and Bad”, but “Beyond Good and Evil” (GM I.17); though in that book, he admits, “in all higher and more mixed cultures there also appear attempts to mediate between the two [moralities]” (BGE 260).

This inversion reflects opposing psychologies. Noble valuation issues from active affects and the “flourishing, abundant, even overflowing health” of the knightly-aristocratic type (GM I.7). These “‘well-born felt themselves to be the ‘happy’”, and their happiness lay in doing: “being active was with them necessarily a part of happiness” (GM I.10). They do not nurse injuries; “strong, full natures” are “incapable of taking one’s enemies, one’s accidents, even one’s misdeeds seriously for very long” (GM I.10). Even their terms for inferiors retain “almost benevolent nuances […] of pity, consideration, and forbearance” (GM I.10) – the way birds of prey do not consider lambs wicked (GM I.13). Some read this as compassion, since Nietzsche suggests, “here alone genuine ‘love of one’s enemies’ is possible” (GM I.10), but this should be read ironically: it marks not Christian pity but condescending contemptuousness born of the “pathos of distance” (GM I.2); they do not take them seriously enough to hate them. The nobles’ stance, in short, is self-affirming: it “acts and grows spontaneously, it seeks its opposite only to affirm itself more gratefully and triumphantly” (GM I.10).

Slave morality’s psychology is the reverse. Its wellspring is ressentiment – a negative affect that, unable to discharge itself, “becomes creative and gives birth to values” (GM I.10). Too impotent for action, the reactive psyche “always first needs a hostile external world in order to act at all – its action is fundamentally reaction” (GM I.10). Some regard its simultaneously reactive yet creative nature as contradictory; but the creativity lies not in the first No – the instinct to recast the strong as evil – but in its rationalisation. For that, creativity is necessary, to induce the strong themselves to internalise the inverted values. Thus, they first find pleasure in condemning the strong – Nietzsche quotes Aquinas: “the blessed in the kingdom of heaven will see the punishments of the damned, in order that their bliss be more delightful for them” (GM I.15). Then, to cultivate guilt in others, they “must make the bird of prey accountable for being a bird of prey”, smuggling in a voluntarist picture of agency. Impotence thus acquires a creative outlet in the fiction of a doer behind the deed, a “neutral substratum behind the strong man, which was free to express strength or not” (GM I.13); that fiction enables the conception and spread of the revaluation.

Noble and slave moralities also correspond to two historical-typological cultures: the warrior-aristocrat and the priest, or equivalently the dichotomy of “Rome against Judea, Judea against Rome” (GM I.16). Roman culture is aristocratic, recognising no moral universality; its exemplars resemble Homeric warrior-heroes like Achilles, for whom glory measures worth. The contrast is to priests – figures of spiritual authority within an originally noble stratum – who, physically impotent, transpose superiority into the realm of purity (GM I.6). Jewish priests, consumed with ressentiment toward the “strong and noble” Romans (GM I.16) but unfit for war, stage the “slave revolt in morality”: they invert noble values by defining strength as evil and weakness as good, and postulate the specious theory of agency that holds the strong accountable for their nature (GM I.7).

It is disputed whether this “slave revolt” names an event or a mechanism. Nietzsche presents it as a “fearful struggle on earth for thousands of years” (GM I.16). Some see it as psychological, since it does not depict a particular historical episode. But since it unfolds over millennia, and “all protracted things are hard to see, to see whole” (GM I.8), Nietzsche can be read as allegorising the protracted event for clarity. Christianity is a decisive historical vehicle rather than its essence: it made slave morality globally dominant – “Rome has been defeated beyond all doubt” (GM I.16) – yet the same reactive pattern persists in secular moralities that universalise innocence and blame.

Ultimately, noble morality affirms strength; ‘bad’ is its foil. Slave morality, born of ressentiment, begins with ‘evil’ and exalts weakness. Each reflects a type – active warrior and reactive priest – whose struggle culminates in the “slave revolt”, where the latter’s values prevail.

Bibliography

Nietzsche, F. (1966). Beyond Good and Evil: Prelude to a Philosophy of the Future. (W. Kaufmann, Trans.) New York: Vintage Books.

Nietzsche, F. (1967). On the Genealogy of Morals. In F. Nietzsche, & W. Kaufmann (Ed.), On the Genealogy of Morals and Ecce Homo (W. Kaufmann, & R. J. Hollingdale, Trans., pp. 1-163). New York: Vintage Books.

Result

Mark: 62% (Low 2.1)

Feedback:

This is a good treatment of the distinction between master and slave moralities. You show good knowledge of the texts and your exposition is mostly accurate. However, there are some significant places for improvement.

First, the essay relies much too heavily on direct quotations of the primary text. You of course want to avoid ignoring the primary texts, but it is possible to err in the other direction too. The result is that the essay sometimes reads almost like an abridgement of GM I, rather than, well, an essay. Relatedly, the paper lacks much of a focus. You list many points of difference between noble and christian values, but there is very little argumentative arc or organising thesis here. The result of both of these issues is that the paper is, for the most part, expository rather than interpretive.

Suggestions for how to improve:

• Don’t try to let the primary texts do your work for you; instead consider a few key passages, and discuss them in more depth.

• Have an overarching thesis. It’s helpful to consider how else the text (or some portion of it) might be interpreted, and then structure your essay around arguing that your reading is better.

I.

Charlie Kirk is dead. Before you have any further information, it should be obvious to you that something very sad happened. This is because life is good, and it is almost always bad when it is cut short. If you think there are exceptions like old age or infirmity, they didn’t apply. He was 31 years old, and is survived by his wife Erika Kirk, a three-year-old daughter and a one-year-old son.

Some additional context: Kirk was a political activist, co-founder of Turning Point USA, a “nonprofit organisation that advocates for conservative politics on high school, college, and university campuses”1. He had a close relationship with the Trump family2 and Vice President J.D. Vance3, and was well-known to many senior Republicans. A survey of TikTok users found that he was the most trusted individual among Trump voters under 304; his videos attracted millions of views5, and many profiles credit him with building the MAGA youth movement6. Even had he died in a freak accident, his death would have been a notable event.

But he did not die in a freak accident, and the manner of his death made it especially conspicuous and horrifying, meriting wall-to-wall news coverage. He was doing a public debate at a university, a regular fixture of his career as a commentator. As part of his American Comeback Tour, students of Utah Valley University could approach his “Prove Me Wrong Table”, and engage him on any topic they wished. Twenty minutes into the event, as he spoke with the second student7, a single gunshot was fired, and the bullet struck Kirk in the neck8. Video footage shows him recoil while speaking; eyewitnesses reported “blood pouring out everywhere”9. There were 3000 people in attendance10, including his family. He was pronounced dead two hours later11.

II.

This is extraordinarily chilling. This murder is the first time in modern history that a commentator has been assassinated in America12. Kirk was not a President, not a Senator, not a Martin Luther King Jr. whose prominence made him an obvious target, but someone whose vocation was speaking, arguing, debating, and provoking. It is bad enough that our culture has come to “price in” that politicians will sometimes be targets of violence. This is even more dangerous territory: the elimination of someone whose only crime was having opinions and expressing them publicly. It should be clear that this is, among its other horrors, a major blow to freedom of speech.

Alfred Stearns writes in his reflections (titled, Assassinations Work): “Killing public figures intimidates others into silence […] a conservative considering a career in politics will now weigh the chances of bleeding to death in front of their family on the scales”. Except it’s not only conservatives, but anyone who would express unpopular or controversial views in a public forum. If we in any way normalise or excuse such violence, even obliquely, hunting around for caveats and half-justifications, we strike at the core of democratic life. Murdering people to silence opposing views is not a political issue. It is an unadulterated violation of the rules of the game, an affront to everything we hold dear, and should be condemned in the strongest possible terms.

This seems broadly understood by public figures on the political left. Naturally, commentators who occupy similar roles13 to Kirk, like Dean Withers14 and Hasan Piker15, understood this point immediately. Democratic politicians immediately condemned the violence. Perhaps some of their statements were slightly perfunctory, but then they probably didn’t particularly know who Charlie Kirk was (Gavin Newsom, who had met him and recorded a podcast episode with him, made a more powerful statement than most). At least they said the right things.

However, among “ordinary people” — many students at my university, for instance — there was more excuse-making and deflection. This includes the President-elect of the Oxford Union, who despite having debated Kirk before, reacted to the shooting with ebullient celebration on a group chat. There is something uniquely evil and twisted about reacting this way to a man’s death given he had shaken his hand and stood across the despatch box from him. But even for those who knew him only from TikTok and YouTube, it is grotesque to greet the killing as some sort of karmic retribution.

III.

Karma, for a political activist, may involve one’s side losing an election. For a commentator, losing a debate. Kirk’s preferred candidate (deservedly) lost the 2020 election; and in my view, he came off worse in plenty of his debates. That, not a bullet puncturing his carotid artery16, is what accountability, or “karma”, looks like in a democracy. Indeed, it is praiseworthy that he let himself in for it so often, making a career out of engaging young people’s arguments and making the case for his beliefs. As Ezra Klein noted in his New York Times piece17:

Kirk was practicing politics in exactly the right way. He was showing up to campuses and talking with anyone who would talk to him. He was one of the era’s most effective practitioners of persuasion. […]

I envied what he built. A taste for disagreement is a virtue in a democracy. Liberalism could use more of his moxie and fearlessness. In the inaugural episode of his podcast, Gov. Gavin Newsom of California hosted Kirk, admitting that his son was a huge fan. What a testament to Kirk’s project.

Klein received some criticism for this, for instance from Jeremiah Johnson, who argues that “his goal was not respectful two-way conversations”, but to “farm clips he could use on social media to make his opponents look ridiculous”, thus contributing to an environment of polarisation. But as far as I can tell, Klein is correct. Sure, his titles often have this clickbait character, but then so too do Christopher Hitchens18 or Ricky Gervais19 clips. Watching Kirk’s college debates now (which I hardly did when he was alive, except when The Algorithm thought fit to serve them up to me) it does seem like he basically conducted himself respectfully towards respectful students, and was mostly disrespectful to disrespectful students.

That’s not to say he was some paragon of truth-seeking. He was a propagandist20 for the Trump campaigns and administrations, certainly, but that’s just to say that he found his views well-represented by an existing political vehicle, and sought to persuade others to see things the same way. This meant he was often wrong, and the just deserts for that fault is for the wrongness to be exposed in debate. Instead what has happened is that the very possibility of his getting what he deserved is gone. He was murdered beneath one of his Prove Me Wrong signs, and now he can never be proven wrong again, because he no longer exists except as a cold body in a coffin21, and that fact should sicken us all.

It is vitally important that violence never be treated as an option in politics, or a consequence that might befall people for their views. Violence is humanity’s oldest method of settling disputes; it took millennia of cultural evolution to build the fragile architecture that allows us to do otherwise. Navigating our disagreements peacefully is the central problem of human co-existence; constitutions, parliaments, liberalism, democracy — the set of social technologies that we together call “civilisation” — are our answer to it. That some still give in to the atavistic impulse is easy to understand. What deserves our outrage is the willingness to surrender to barbarism, and the reckless readiness to discard what civilisation has so painstakingly secured.

IV.

This includes many reactions to Kirk’s shooting on the Republican side who needlessly raised the stakes and poured fuel on the fire: the unthinking ease with which Trump blamed “the radical left”22, before anything was known about the shooter; Elon Musk’s declaration that “Either we fight back or they will kill us”23; a general attempt to blame trans people24. Spencer Cox, the Republican governor of Utah (where the shooting happened), seems to have mostly been an honourable exception here.

It also includes, as I suggested, normal people25 who greeted the murder with laughter or rationalisation. A university student celebrating murder may not be as bad as the President of the United States indulging reckless blame-casting, but both chip away at the same fragile boundary. (Also, one is more likely to read this piece than the other). While I have no intention of seeking to cancel such people, as many on the right have sought to do, it is worth examining their excuses.

There are the cowardly responses, the ones that won’t quite endorse the slaughter, but who will say things like “Well, I disagree with murdering him, but perhaps that’s just what happens sometimes if you’re too provocative”. They don’t say exactly that Kirk had done something plausibly deserving of capital punishment, but hint sweetly that his rhetoric meant he was perhaps ever so slightly asking for it. Include in this category Ash Sarkar of Novara Media, who bizarrely tweeted that “Charlie Kirk died by the code that he lived by”26, adding just that she objects to the code.

This makes sense only if you believe that being polarising and argumentatively combative is a form of living by the sword, somehow comparable to dying by the sword of assassination. This is absurd. It is not some balanced middle-ground position, a careful balance between the extremes of “excusing murder outright” and “condemning it unequivocally”. It is simply a genteel way of flirting with the former while outwardly doing the latter, a grotesque category error that confuses words with violence and lowers murder to the level of debate.

I am quite sure that Sarkar would see this obscene equivocation for what it is if someone had suggested of George Floyd — who five years ago was also senselessly murdered on video — that on account of his criminal background, he “died by the code that he lived by”. If this view were applied consistently, then one would have to say that if Ben Shapiro or Candace Owens or Hasan Piker were killed tomorrow, there would be “good” and “bad” sides to that too. Such an attitude — suggesting in the face of violence that there’s “fault on both sides” — is incompatible with the basic norms of a civilised society.

These deflections often rely on combing through the thousands of hours of Kirk’s video content to single out his most egregious remarks. A handful of these are genuinely bad, such as his glib reaction to the attack on Paul Pelosi27. But most rest on dubious claims of racism, by stripping his attacks on affirmative action of context; or of homophobia, by twisting his views on Christianity. Thus Karen Attiah was fired from the Washington Post for misquoting Kirk as having said that black women in general “do not have the brain processing power to otherwise be taken really seriously”28; and both Alastair Campbell29 and Stephen King30 ended up apologising after sharing a false claim that he’d called for the stoning of gay people31.

V.

An especially common deflection is to note Kirk’s stance on gun policy and the Second Amendment. Since he maintained that Americans should retain a right to own guns, it is suggested, he was essentially partly responsible for his own death, and there is little point feeling sorry for him. One person told me quite explicitly that “ironically he’s been killed by the exact thing he supported” and so I “look stupid feeling bad for that”32. They bring up the following statement Kirk made on this subject; it is worth quoting at length33, though usually the bolded part is quoted in isolation:

The Second Amendment is there, God forbid, so that you can defend yourself against a tyrannical government. And if that talk scares you — “wow, that's radical, Charlie, I don't know about that” — well, then you have not really read any of the literature of our Founding Fathers. […]

Now, we must also be real. We must be honest with the population. Having an armed citizenry comes with a price, and that is part of liberty. Driving comes with a price: 50,000 people die on the road every year. That's a price. You get rid of driving, you'd have 50,000 less auto fatalities. But we have decided that the benefit of driving — speed, accessibility, mobility, having products, services — is worth the cost of 50,000 people dying on the road. So we need to be very clear that you're not going to get gun deaths to zero. It will not happen. You could significantly reduce them through having more fathers in the home, by having more armed guards in front of schools. We should have a honest and clear reductionist view of gun violence, but we should not have a utopian one.

You will never live in a society when you have an armed citizenry and you won't have a single gun death. That is nonsense. It's drivel. But I think it's worth it. I think it's worth to have a cost of, unfortunately, some gun deaths every single year so that we can have the Second Amendment to protect our other God-given rights. That is a prudent deal. It is rational. […]

So then how do you reduce? Very simple. […] How did we stop shootings at baseball games? Because we have armed guards outside of baseball games. That's why. How did we stop all the shootings at airports? We have armed guards outside of airports. How do we stop all the shootings at banks? We have armed guards outside of banks. How did we stop all the shootings at gun shows? Notice there's not a lot of mass shootings at gun shows, there's all these guns. Because everyone's armed. If our money and our sporting events and our airplanes have armed guards, why don't our children?

I should preface my remarks by noting that I’m British, and don’t understand America well enough to be confident on what optimal gun policy is for them. The British status quo seems to me broadly satisfactory, and I would not want to move in their direction. But it’s obviously naïve to suppose that simply copying our “common sense” gun laws would solve their problem34. As Kirk indicates, Americans have a unique cultural attachment to guns and the Second Amendment given their history; given this, just banning them would probably be as ineffective as Prohibition was35.

It’s reasonable to disagree with the position Kirk advocated. But as the full quote should make clear, it is not reasonable to say (as I have seen many people36 say), that “I don't support what happened to Charlie, but Charlie supported what happened to Charlie”. It seems almost libellous to suggest that because Kirk favoured the Second Amendment, he was pro-murder. Evidently, he had his own views about how to deal with gun violence and gun culture, namely more security and harsher sentencing for violent criminals. If there are flaws in this position, they should be critiqued on their own terms, not adduced in support of schadenfreude one feels at his murder.

Indeed, his last tweets were about the stabbing of Ukrainian refugee Iryna Zarutska by a man with 14 prior arrests37. Of course, every time we let a violent criminal out of prison, it’s because we think it’s worth a cost of some potential lives they may take. Every time we insist on a fair trial in which the guilty may go free, we think the same. And Kirk is right that in allowing cars, we also to some degree trade lives off against convenience38. I can do no better than to agree fully with Matthew Adelstein’s remark39: “I’m irritated that […] Kirk seriously acknowledging tradeoffs [sic] is treated as a gotcha by people who are happy about his death”.

VI.

There has also been peculiar, alarmingly widespread response that essentially goes, “It’s fine/irrelevant that he died, because of what’s happening in Gaza”40. I suppose the psychology here is that it is obviously wrong to feel indifference or pleasure at a man’s public assassination, so they link it to a cause that feels sufficiently grave to override the normal moral intuitions. Why waste pity on one dead American, when thousands of Palestinians are being killed?

Clearly, this is a moral non-sequitur. Suffering is not zero-sum; there is no competition between the two tragedies. It amounts to little more than an attempt to change the subject, a sleight of hand to shame people for caring about the “wrong” atrocity. Did you catch the part in Andy Masley’s optics lecture where he leans into the camera and says, “By the way, when an ally is committing war crimes, literally any physical violence from anyone for any reason is a-okay”41? People who make this move repeat the same dehumanising gesture they decry in others, sorting deaths into those that matter and those that don’t.

This nihilistic attitude cannot stand. Kirk’s murder is the third occasion, in a very short span of time, that I’ve observed this strange disposition. The first was on October 8th, 2023, in the aftermath of Hamas’ attacks on Israel. On that day, “Warwick Action for Palestine” posted a “Statement on the Palestinian Resistance”, declaring in bold that the massacre was “the response of the colonised” and signing off with “Long live the revolution!”42. The second was the generally positive reaction to the homicide of UnitedHealthcare CEO Brian Thompson43. All three reveal a terrifying indifference to the value of human life.

It is the peak of stupidity to imagine that violence is justified against innocent Israelis because of Gaza, or against health insurance executives because of capitalism, or against political activists because they are right-wing. Charlie Kirk’s murderer thought that he was “full of hate and spreading hate”44, apparently blind to the irony of his own act. All excuses of this kind are only different costumes for the same intellectual emptiness, the surrender to the idea that people are reducible to symbols of the systems you despise. Innocent people are not mere abstractions or proxies for a cause. They are people, and that’s why it’s tragic when they die.

Political violence is not only bad because it begets more violence, though it does. It’s bad in itself. If there is any line worth defending absolutely, without compromise, it is this one. To embrace political violence is to throw away the project of civilisation, and with it, the very idea that disputes can be fought with words, ballots, and arguments rather than with fists and bullets. To justify it, even obliquely, is to spit on the possibility of persuasion, to deny that opponents are fellow human beings, and to reduce politics to war. That way lies only ruin, and the triumph of barbarism.

Prove me wrong.

Context: This summer, I participated in the Hoover Institution Summer Policy Boot Camp, a program “intended to instruct college students and recent graduates on the economic, political, and social aspects of United States public policy”. This involved many interesting speakers, and lots of pre-reading for their lectures. Prior to Stephen Haber’s lecture, we were set his paper Patents and the Wealth of Nations. Some of the arguments didn’t sit right with me, and I immediately wrote up some reflections, that ended up forming the first three sections of this essay. Afterwards, we had a chance to submit a Policy Proposal, “an essay of 1,500–2,000 words that advocates a a specific public policy measure”; so I turned my notes into the below, and submitted it.

Epistemic Status: I basically stand by the critique of patents. I am of course under no illusions that what I’ve proposed in their place is, as written, feasible (or even good). This is partly owing to the constraints of a 2000 word limit, partly because I had to minimise jargon and technical content, and partly no doubt a skill issue. So, I may at some point extend what I’ve written into a longer, more rigorous piece that works through the institutional design in more detail — and also e.g., model incentives formally, quantify welfare effects relative to patents, compare to existing alternatives. Consider this a first draft outline.

If you’d prefer a LaTeX PDF version:

Beyond Patents Designing A Market For Ideas To Foster Innovation (HISPBC Policy Proposal)

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Beyond Patents: Designing a Market for Ideas to Foster Innovation

Introduction

Stephen Haber’s paper Patents and the Wealth of Nations[i] is an empirical analysis of the claim made in its introduction, namely that secure and enforceable property rights, particularly patents, are fundamental to generating long-term economic growth. Haber demonstrates compellingly enough that modern econometric studies and historical evidence from Britain’s Industrial Revolution and the rise of the United States point to a clear causal relationship between strong patent rights and innovation.

His theoretical argument is simply that patents, like any other form of private property, create the security and tradability needed for markets to form around new ideas, allowing specialisation and coordination that would otherwise collapse. In this paper, I concede that patents are one way of forming the “web of contracts” Haber describes, and led to growth in the historical cases he considers. But it does not follow that they did so counterfactually, because that conclusion requires accepting his implicit assumption that in the counterfactual, nothing whatever is done about the problem of intellectual property. I argue instead that while patents are one solution to that problem, they are costly and limited, and I propose in their stead an alternative, market-friendly mechanism for addressing it.

The Problem

Intuitively, we can understand private property as a mapping from subjects (usually individuals) to objects in the world. If there is an arrow from a subject to an object, the subject enjoys a privileged liberty set over the use, transfer, or destruction of the object. Historically, both the domain and the codomain have been quite variable: the set of subjects which may have ownership rights includes not only persons, but also corporations and families; at the time of slavery, the codomain also contained individuals. Thus there is no prima facie absurdity in the suggestion that the codomain might include intangible ideas as well as physical objects. It is no more unnatural than many other such mappings, and as Haber argues (which I accept), doing so has been socially productive.

However, whereas tangible property typically represents a claim over an individuated object – this house, that car – with patents, the claim is on a generalised description (for instance, “any method of achieving X by Y”). That is, the mapping is to an equivalence class of possible instantiations, not to a single object. Haber’s example is of some new method for how a fuel injection system measures the mix of air and gasoline in a car. Against the standard model in which patents are treated as state power granting monopoly rents over an otherwise non-rival public good, he argues that patenting this idea does not lead to a monopoly, since others could still “invent around the patent” to measure the air-gasoline mixture through other methods.

But this description shows us that there is a sense in which patents violate the ordinary logic of private property, by allowing a monopoly on implementation. If I have in my possession, or acquire through free exchange, all the parts needed to put together that fuel injection system, I should be free to do so, by the definition of private property. And having done so, since the resulting device was made by combining my own labour and capital, it too is my private property that I should be free to sell according to my desires; yet under a patent regime, I may be prohibited from doing so even if my design was reached without copying.

Of course, had I been aware of the idea beforehand, one can argue that it was made partly through the labour of the person who came up with the design; in such cases, it is desirable that she be paid, to incentivise that creation. However, patent law generally does not care whether or not I came up with the idea independently[ii]. If I did, my labour and capital are subordinated to a prior paper claim simply because I was second. This is a fairness worry, and violates the Lockean intuition that property arises from mixing one’s labour with material resources.

Since the unfairness takes the form of a stealth violation of ordinary private property rights, it is accompanied by efficiency issues. Independent invention is not rare but common[iii]: Newton and Leibniz developed calculus separately; several inventors independently pioneered the telephone and jet engine. Yet under patent law, the second inventor must abandon or license her own work, even without copying, meaning the regime predictably destroys surplus. Most modern infringement suits do not even allege imitation[iv], suggesting that patents often reward being first to file rather than genuine originality.

Moreover, patents can be exploited by actors who do not contribute to production or discovery. Non-practicing entities, or “patent trolls”, purchase portfolios of claims to threaten litigation and extract settlements from firms engaged in actual research and manufacturing. Such litigation disproportionately targets cash-rich firms and reduces their subsequent innovative activity[v]. Estimated losses to publicly traded firms from troll litigation averaged over $83 billion annually between 2007 and 2010, roughly one-quarter of U.S. industrial R&D spending[vi].

None of this denies the empirical finding that stronger patent rights correlate with faster growth in patent-intensive sectors[vii]. Combining these results, we see that the mechanism is positive on average yet systematically misallocates rewards and burdens by conflating two functions: an incentive/payment mechanism to reward the original inventor; and an ownership/exclusion mechanism granting her exclusive control to block others’ implementations.

Principle: Reward Discovery Without Banning Independent Implementation

The considerations sketched above suggest two design desiderata that a policy proposal to deal with intellectual property must handle in order to retain the benefits of patents while avoiding the inefficiencies. First, society should reward discovery. The central insight in Haber’s account is correct: innovation rents arise when markets can contract on ideas and allocate risks. Without expected rents, there will be underinvestment in inventive effort, and therefore a slowdown in the growth engendered by innovation. Second, society should not prohibit independent implementation. If I did not learn from you, there is no wrongful taking of information, and thus no basis for restraining my inventive and commercial activity, especially since the efficiency cost of doing so is so large.

The natural thought is that we would like to reformulate intellectual property rights so that the arrow in the property mapping points only to the idea itself – the abstract specification or algorithm – and not to the entire equivalence class of its possible instantiations. The distortions of the current patent regime arise precisely because the latter move extends beyond rewarding discovery into forbidding implementation. If we confine the property claim to the idea alone, then the appropriate institutional mechanism is a market in which ideas can be bought and sold at competitively discovered prices, just as with any other form of property.

This would allow those who generate useful ideas to be rewarded – satisfying the first desideratum – since they are paid by those who make use of the idea. At the same time, if someone independently rediscovered and implemented the same idea without having purchased it, they would be free to do so at no cost, satisfying the second desideratum.

The obvious difficulty, and the reason such a system does not emerge spontaneously in the free market, lies in Arrow’s information paradox: to value an idea you must know it, but once you know it, you no longer need to pay for it[viii]. This informational asymmetry represents a market failure, which suggests that there is scope for a policy intervention by the government, in subsidising or facilitating a market for the exchange of ideas. It is the institutional design of such a mechanism to which I now turn.

The Proposal

To address the limitations of patents while preserving incentives, this paper proposes a Federal Idea Exchange (FIX), a federally chartered market institution (perhaps under the U.S. Patent and Trademark Office) for ideas to be discovered, verified, priced and traded, without conferring blanket monopolies over implementation. FIX operates with the following mechanisms.

Verifiable but Obfuscated Disclosure

An inventor wishing to sell or license an idea registers (for a fee, to prevent frivolous submissions) an obfuscated description that establishes novelty and plausibility without revealing full details. She publishes a specification of what she claims the invention achieves, along with hash-based proofs or minimal working prototypes. The FIX registry timestamps the submission and stores the complete design in encrypted form, using a blockchain or similar technology. This addresses the lemons problem[ix] by providing potential buyers with credible signals of quality while protecting the inventor’s secret until a contract is in place.

Prediction Markets with Licensed Third-Party Evaluators

To price entries, FIX licenses third-party evaluators who, under strict fiduciary and liability regimes, can access full designs under nondisclosure. Each listing is paired to standardised prediction markets in which the evaluators trade, that resolve on pre-registered tests relating to whether the design will meet the stated performance threshold, whether bidders will be satisfied, whether challenges will invalidate the claim, and so on. A continuous market maker supplies liquidity[x], ensuring the market yields efficient probability estimates for each question. These probabilities are publicly inspectable.

Escrow and Due Diligence

On the basis of the information revealed in these prediction markets, interested buyers can bid for the right to inspect the full design under a non-disclosure agreement. An escrow intermediary – publicly regulated but privately operated – holds payment while experts verify that the buyer has received the information promised. Payment could be structured in tranches linked to milestones, similar to venture capital staging. If the buyer rejects the idea after inspection, the escrow returns the funds and the idea remains available; repeated false claims would damage the seller’s reputation – her future designs may be penalised in their FIX prediction markets, for instance.

This mechanism mimics early-stage venture capital markets, where investors bear risk based on limited disclosure and mitigate it through contracts, staged investment and reputational mechanisms.

Independent Invention and Compulsory Licensing

Unlike patents, the market would not grant a monopoly over implementation. If another inventor independently discovers the same idea and registers it, both are free to practice and compete. To reward the first discoverer while respecting fairness, the law requires that anyone who learned of the idea through the registry pay a royalty or licensing fee. The registry itself creates an auditable evidentiary trail of knowledge transfer, since it timestamps and logs when an idea is inspected. Royalty rates could be negotiated or set statutorily, drawing on existing experience with compulsory licensing in antitrust and standard-essential patents. If an inventor uses the idea without having accessed the registry (for instance, through independent discovery), no royalty is owed.

This rule aligns property rights with causal knowledge transfer: you owe compensation only if your knowledge came from someone else. Such a defence would protect independent inventors and encourage competition; it also stimulates innovation, by reducing the fear of inadvertent infringement and associated litigation costs.

Evaluation Methods

Assessing the effectiveness of FIX requires both quantitative and qualitative methods. Key indicators include changes in R&D investment levels, number and diversity of ideas registered, and subsequent commercialization outcomes compared to patent-intensive sectors. Prediction market accuracy can be measured by ex post verification of claimed performance, while transaction data reveal liquidity and pricing efficiency. Surveys of participating firms and inventors provide evidence on trust, perceived fairness, and litigation avoidance. Comparative studies against patent litigation costs and innovation rates can establish net welfare gains, taking into account the cost to the government of administering the policy. Finally, independent invention claims offer a natural test of whether knowledge transfer rules function as intended.

Conclusion

FIX restructures intellectual property by decoupling discovery rewards from implementation monopolies. This materially reduces the deadweight loss from patent troll litigation while preserving and increasing innovation incentives through competitive price discovery. The result should be faster technological progress, reduced barriers to entrepreneurship, and more efficient allocation of R&D resources – achieving Haber's vision of property rights fostering growth, but without the systematic inefficiencies of the existing patent system.

Endnotes & References

[i] Haber, S. (2016). Patents and the Wealth of Nations. George Mason Law Review, 23(4), 811-835. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2776773

[ii] Tabarrok, A. (2011). Launching The Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast. TED Books.

[iii] Merton, R. K. (1961, October 13). Singletons and Multiples in Scientific Discovery: A Chapter in the Sociology of Science. American Philosophical Society, 105(5), 470-486.

[iv] Cotropia, C. A., & Lemley, M. A. (2009). Copying in Patent Law. North Carolina Law Review, 87, 1421.

[v] Cohen, L., Gurun, U., & Kominers, S. D. (2019, December). Patent Trolls: Evidence from Targeted Firms. Management Science, 65(12), 5461-5486.

[vi] Bessen, J., & Meurer, M. J. (2014, January 2). The Direct Costs from NPE Disputes. Cornell Law Review, 99, 386-424.

[vii] Hu, A. G., & Png, I. (2013, July). Patent rights and economic growth: evidence from cross-country panels of manufacturing industries. Oxford Economic Papers, 65(3), 675-698. doi:https://doi.org/10.1093/oep/gpt011

[viii] Arrow, K. J. (1962). Economic Welfare and the Allocation of Resources for Invention. In The Rate and Direction of Inventive Activity: Economic and Social Factors (pp. 609-626). Princeton University Press.

[ix] Akerlof, G. (1970, August). The Market for "Lemons": Quality Uncertainty and the Market Mechanism. The Quarterly Journal of Economics, 84(3), 488-500. doi:https://doi.org/10.2307/1879431

[x] e.g., as in Hanson, R. (2007). Logarithmic Market Scoring Rules for Modular Combinatorial Information Aggregation. Journal of Prediction Markets, 1(1), 3-15. Retrieved from https://mason.gmu.edu/~rhanson/mktscore.pdf

Objection: Low liquidity makes prediction market prices meaningless

Nobody has ever actually said this to me, but readers with a background in finance may be wondering if we don’t just end up with big gaps between bid and ask, and if this means we can’t really talk about a single “price”. Basically, yes, but this is a solved technical problem. Let’s explain the worry for everyone else.

Stocks are traded in order book markets: buyers and sellers post limit orders (“I’ll buy 100 shares at £99”; “I’ll sell at £101”). The highest price any buyer is currently willing to pay is called the bid, and the lowest price any seller is currently willing to accept is the ask; the gap between them is the spread. Trades clear when a bid meets an ask. Liquidity is deep, both because many people already want to trade, such as hedgers and investors reallocating their portfolios; and because professional market makers continuously post bids and asks, earning the spread. In liquid equities, this depth means the spreads are tight, and the last price is a meaningful consensus about value.

One might worry that unlike equity markets, prediction markets lack these features. There is no natural base of hedgers or portfolio allocators; nobody “needs” to hold these securities the way fund managers need to hold stocks and bonds2. Thus, order books are thin: if one person offers to sell at £0.60 and there are no bids, the “price” is just that lone offer. If another trader then posts £0.40, it may appear the probability crashed from 60% to 40%3, even though there was no shift in collective judgement — just two small players posting small orders. Contrast this with how many millions you would need to move the price of Apple stock even slightly! So maybe the relationship between price and probability in prediction markets is less robust than I claimed.

It’s a reasonable concern, and it’s exactly why modern prediction market platforms use automated market makers, such as Robin Hanson’s logarithmic market scoring rule (LMSR). Rather than waiting for a counterparty, you trade against the LMSR market maker — a piece of code that always stands ready to buy or sell, at a price determined by its current “inventory” of shares on each side of the bet. A liquidity parameter in the cost function4 sets how sharply the price responds: small trades move it only slightly, and the cost of pushing the price from, say, 40% to 70% grows nonlinearly; forcing it to 99% becomes prohibitively expensive. The result is that prices adjust smoothly rather than jumping around with each isolated order, and there is always a well-defined quote. In other words, the automated market maker guarantees continuous liquidity (that is, it subsidises trading without adding noise5), and eliminates the jumpiness of illiquid order book markets. This makes it meaningful to interpret the displayed price as the market’s best probability estimate.

Objection: Don’t financial markets and betting markets already do this?

Occasionally when I make the comparison to financial markets, it will be objected that since we already have those, prediction markets are a redundant addition. If I want to predict the future cash flows of a company, that’s a solved problem; I can just look at its stock price. Betting markets likewise already exist to provide odds on popular events like sports results. So what’s the big deal?

The response is straightforward. Financial markets were built to solve a specific problem, that of deciding how to allocate scarce capital. And as a by-product, they generate market prices that contain valuable relevant information. But many other domains present informational needs that aren’t satisfied simply as a spillover from some other system — policy effects, project timelines, likelihood of a study replicating, and so on. In these cases, it’s clear that we should generalise the principle and deliberately create markets with the purpose of providing that information.

Objection: Stupid people add noise; the result is just experts but diluted

It may have occurred to you that the putative validity of prediction markets comes from aggregating the judgements of actually informed traders. But if anyone is allowed to bet, can’t their knowledge be swamped out by traders who don’t know anything? Sure, I suggested mistakes would tend to cancel out, but what if amateurs are biased in the same direction? Worse, what if there are just no informed traders in the market at all? Fear not: as I will show, the presence of uninformed traders in the market makes the price more, not less efficient. More generally, anyone betting for any reason other than that they have information — so-called noise traders — increases the efficiency of the market.

To see why, imagine you’re in a market with no noise traders, in which everyone is well-informed and rational, and that this is common knowledge. You obtain private information about the value of the asset (that is, about the probability of the event). Do you trade on it? Well, no. You assume that since some other informed, rational participant is taking the other side of your trade, they know something you don’t. Everyone else reasons the same way, so in this market, no trades happen; nobody contributes their knowledge. This is essentially the no-trade theorem (Milgrom & Stokey, 1982) applied to prediction markets.

But in the real world, there are “stupid”6 (uninformed) participants in these markets. These noise traders create the possibility of trade, since informed traders wanting to take the dumb money become willing to act on their private signal. Of course, any individual noise trader is, by definition, adding noise, pushing the price in random directions. But the more dumb money there is, the greater the incentive for smart money to enter the market to correct it. Again, just as in financial markets, noise simply subsidises the process by which informed traders push the price to be well-calibrated.

Objection: Prediction markets can be gamed by the rich

Another common worry about using prediction markets for decision-making is that wealthy participants could manipulate them to support their preferred narrative. When Polymarket prices began indicating that Trump’s chances of winning the 2024 election were rising, many were concerned that a few traders with deep pockets might be distorting perceptions of his actual prospects7. One can only imagine how much more concern there would be if prediction markets were used to guide policy choices — say, on tax rates.

Of course, a version of this objection is immediately answered by the previous point. Trading because you want to influence perceptions is just one example of “betting for any reason other than that you have information”. It’s just offering free money to informed counterparties who see that there’s no basis for the swing. But a more sophisticated worry might be that some actors (including large corporations) may have lots of capital relative to the size of the market, and therefore be willing to lose large amounts of money for a long time in order to sustain a misleading price.

This is another legitimate consideration, that also appears solved if you consider the analogous case of traditional financial markets. There too, some players have trillions of dollars of assets under management, and comprise a non-negligible percentage of the markets they trade in. But manipulation is near impossible, not only because of how expensive8 it is to keep burning money against informed traders correcting you, but also because regulation ensures attempts to do so quickly run into legal walls.

Objection: Prediction markets prey on gullible fools & incentivise gambling (which is a vice)

Fine, so neither the existence of stupid people nor the existence of rich people deals a decisive blow to prediction markets. Still, perhaps you were put off by the explanation of how the noise generated by uninformed participants is the reward to informed traders. Doesn’t this mean that to function, they depend on bettors who have no business participating in these markets? Is that so different from gambling? Should we really be encouraging that kind of degeneracy?

Let’s first take the concern that this is a vice society ought not encourage. There is a considerable body of opinion that maintains that there is nothing contemptible about betting on one’s beliefs — on the contrary, that it is virtuous to put one’s money where one’s mouth is and own the consequences of being mistaken. Still, opinions differ, probably irreconcilably.

I offer the following points as solace: first, there are many good reasons that participants may have for trading in these markets, including that they regard themselves as being well-calibrated (and wish to test their mettle and find out), or to practise their forecasting skills. Second, demand for speculative risk-taking exists regardless, and it seems better if those energies go towards the pro-social end of providing information rather than towards zero-sum endeavours like casino slot machines or meme coins. Third, the category of noise trader is not solely made up of uninformed traders. It also includes hedgers and those with heterogeneous risk preferences, though admittedly, unlike in financial markets, these types are a minority.

However, the truly important point here is that the worry simply isn’t true; prediction markets need not depend on noise traders in this way. Notice that most prediction markets that could exist, don’t. What explains that we have high-volume markets for the outcomes of presidential elections, but none for the effect of raising the minimum wage on unemployment? The answer is that the former is just much more interesting to people. So lots of amateurs trade — for fun, for vibes, whatever — and their money attracts informed traders in the manner described. But they don’t subsidise all these other markets in the same way. If we want these markets to exist and be informative, we can’t just rely on these “gullible fools” to subsidise the market — some interested stakeholder would have to provide the subsidy. Once they do, this looks much less like clever insiders feasting on hapless rubes, and more like institutions deliberately underwriting a public good. This relates in an obvious way to the next objection…

Objection: Prediction markets need subsidies, or there won’t be enough volume to be informative

So as we have seen, not all prediction markets gain traction. And sometimes the information we want isn’t supplied for free. Snowberg, Wolfers & Zitzewitz complain in their paper Prediction Markets for Economic Forecasting, in a section titled Why They (Sometimes) Fail:

[…] design flaws sometimes prevent reliable forecasts. These flaws generally lead to a lack of noise traders (or thin markets) that reduces incentives for discovering, and trading on the basis of, private information (Snowberg, Wolfers and Zitzewitz, 2005). In order to attract noise traders, the subject of a prediction market must be interesting and information must be widely dispersed.

This by itself, you will notice, isn’t really an objection. It’s just a statement of the dynamic I’ve already described. But it then infers from the fact that noise traders often end up subsidising markets, the more questionable claim that if they are not designed to attract noise traders, they must fail. This is untrue. As Robin Hanson responds:

Noise traders are traders who subsidize your market for free, for reasons of their own, such as risk-hedging, idiocy, etc. If you fail to attract noise traders, you fail to get their free subsidy. But you can still offer to directly pay for your info, by subsidizing the market […] Here we are only talking about a “failure” of prediction markets to mooch stuff for free!

He is, of course, correct. Sometimes information is a public good, in which case it makes sense for governments to fund it. Other times, it is a private good that companies might want to pay for. Except in the rare cases where noise traders sustain a market because of their own interest and enjoyment, you must pay for what you want. It is, in this regard, like any other good. The claim of prediction markets isn’t that they can magically obtain information for free; it is that they are the most efficient way to spend one’s time and resources to acquire trustworthy information.

Specifically, the concerned actor can subsidise the market by sponsoring liquidity through the automated market maker I discussed in response to the first objection. Even a modest ongoing subsidy can yield outsized informational gains. Crucially, the LMSR mechanism not only subsidises trading, but also ensures that pay-outs flow only to traders who move prices closer to truth — guaranteeing that the subsidy rewards accuracy rather than just noise.

Objection: Prediction markets reflect popularity, not truth

Your hackles may be raised at this point. You might have to pay for this information? Won’t you just buy the crowd’s favourite story, and find out what’s popular to believe? What guarantees you get your money’s worth, and learn something about reality?

For one thing, market prices aren’t headcounts. They’re weighted by how much capital participants are willing to risk, which in turn depends on how confident they are in their convictions. Whereas a poll tells you how many people say they believe something, a market tells you how much they will stake on being right. Expressive trading is costly: if you buy because it’s fashionable, you pay. This skin in the game leads to strong selection pressures: participants who are systematically wrong lose money and fade from influence9.

For another, popular narratives with no grounding in reality just create incentives for market participants to take the free money on the other side of the trade. If you’ve been reading linearly, you may be tired of this point, but it bears repeating: whenever prices diverge from reality for any reason, they create a bounty for anyone who knows better10 to step in and correct them. The greater the divergence, the greater the incentive, and the faster they will act to correct it.

Objection: Prediction markets have made mistakes before!

That’s all well and good theoretically, you may say. But theory can only take us so far; and haven’t prediction markets often just failed in reality? Weren’t prediction markets straightforwardly mistaken about, for instance, who would become Pope in 202511? And doesn’t this sort of mistake undermine everything I’ve said?

Let’s suppose a prediction market tells us event Y has a 20% chance of happening. Then Y happens. Was the market wrong? Not necessarily. If the market were efficient, we expect to see this outcome sometimes, about one time in five to be exact. Observations like this are clearly not sufficient to claim a market was mispriced.

Ah, but you say the price was obviously wrong, ex ante. It was always clear that Y was going to happen. Nevertheless the stupidity of the market reigned. The wisdom of crowds became the madness of crowds, and despite the future being totally clear to you, prices stubbornly refused to take note. If indeed this is your view, I don’t see why you’re complaining. If true, this means you are being offered free money by prediction markets12! If you believe prediction markets are habitually offering up ridiculous results, and you know better, pick a platform of your choosing, bet on what you know to be obviously true, and extract your reward. Good luck!

Objection: Prediction markets are reflexive; they incentivise rooting for, or causing, bad outcomes

Hopefully you’re by now convinced of the epistemic efficiency of prediction markets. They’re mechanically sound, distinct from vibes, and probabilistically meaningful. However, that isn’t the only thing we care about. You might worry they have a corrupting effect on incentives. Markets, after all, sit inside the systems they predict, and so can influence the events they track. What if someone places a large bet on some event, and then attempts to bring that event about in order to profit?

A useful place to start is to consider that a similar worry holds in existing financial markets. Investors short companies they think will decline, or buy insurance against disasters. We allow this because they serve useful functions. But this already makes it possible to, say, take out a large short position against a publicly traded company, then have its CEO assassinated, and collect your profit when the share price inevitably collapses13. It’s noteworthy that this seldom happens.

You will respond, correctly, that this likely has something to do with assassination being a rather big deal, with high potential costs. But what about markets with perverse incentives for lower cost activities? For example, Polymarket had a market on whether a dildo would be thrown onto the court of a WNBA game on some specified dates. Clearly it would be all too easy for someone to bet on this happening, then do it themselves, and profit. And clearly that would be bad.

The response is quite simply that prediction markets, like all markets, have to be designed with this problem in mind. We already don’t allow several kinds of contracts because of perverse incentives: you can’t take out fire insurance against your neighbour’s home, for instance, because then you’d have reason to strike the match. Likewise, well-run prediction markets should exclude topics where individual participants can cheaply influence the outcome. I think it’s bad that Polymarket ran the aforementioned dildo market. But the most valuable use cases tend to involve large-scale, many-cause events, and such markets do not have this problem. The crucial point is to set boundaries on what contracts are permissible, and to enforce conduct rules around manipulation or conflict of interest.

Objection: Prediction markets aren’t widely used, so there’s some other problem I’m neglecting

It’s difficult to believe, but I have been accused of being “prone to rhetorical sleight of hand”. I reject such accusations, for what it’s worth, but you may nevertheless feel that I must be misleading you somehow. After all, prediction markets aren’t in widespread use; and if what I’ve said here is right, they should be. Therefore, I’m wrong.

Though prediction markets like Polymarket, Kalshi, and Manifold exist and are growing in popularity, the observation is clearly true. Part of this is about legal and regulatory issues. One thrust of my argument has been that prediction markets, as financial markets like any other, will function well when regulated accordingly. Instead, they are often just illegal, because of online gambling laws (yes, really). If these misguided laws didn’t exist, I bet they’d be used more.

But that doesn’t answer the question entirely. After all, there don’t seem to be many companies using internal prediction markets to help guide decisions. What am I missing? Hanson’s view, to which I have already alluded, is that people’s real motivations often diverge from their stated ones. Prediction markets help them achieve what they say they want — better forecasts — but in practice they care more about their status. And if a worker asked about a project deadline responded, “I don’t know, but maybe we could use a prediction market”, they’d lose status; promotions would go instead to those who confidently claimed to know.

This certainly may be part of the story, but I am obliged to regard it as something of a cop-out. In the next part, we will explore why, in spite of all the arguments in this post, rational actors choose not to use prediction markets as much as Hanson expects14.

A prediction market is, at its core, a mechanism for turning private beliefs about uncertain events into publicly visible prices. In the simplest design, we have a security that will pay £1 to its owner if some event occurs, and £0 otherwise — for instance, “a Democrat will win the next U.S. presidential election”. If this security currently trades for £0.54, then the implied probability of the event is 54%1. The event resolves when an adjudicator or dispute mechanism confirms whether the specified criteria were met; at that point, all outstanding contracts pay out, and the market closes.

As in financial markets, traders who believe the value of the security is higher than the current market price (or equivalently, that the probability is higher than 54%) will buy, since the contract offers positive expected value for them. For instance, if one thinks the “true probability” is 70%, the expected value of the security is £0.70, and so buying at £0.54 yields an expected profit of £0.16 per contract2. Conversely, traders who think the probability is lower than 54% will sell short. In effect, traders who are more right than the price make money; traders who are less right than the price lose money.

These profit-seeking trades push the price towards a consensus forecast. Buyers increase demand and push the price (and implied probability) up; sellers increase supply and push it down. The process continues until the market reaches a point where, at the margin, buyers and sellers are indifferent: the price reflects the crowd’s risk-neutral expected value of the payoff. Under familiar conditions — adequate liquidity, low transaction cost, and a sufficiently large pool of informed traders — that marginal price is a reliable forecast.

Of course, the kind of “binary option” prediction market I’ve described isn’t the only possible contract type. Markets can be multinomial, with mutually exclusive outcomes whose prices sum to one (“which candidate will win the Republican nomination?”); continuous, that tracks an ongoing variable over time instead of resolving at a single future moment (“what will quarterly inflation be?”); range or time-to-event contracts, which slice a continuum into bands or dates; and, most usefully for decisions, conditional and combinatorial contracts (“if policy P is implemented, will Y occur?”).

The distinctive feature of prediction markets is simply that the underlying asset is not a stock or bond but a claim on a particular outcome. Just as the price of Apple shares reflects the market’s collective judgement about the company’s future profits, the price of an election security reflects the market’s collective judgement about the chances of a given result. The key insight is that traders have incentives to act on their private information — whether that information is explicit (a new poll, an inside view of how a policy will play out) or tacit (a hunch grounded in domain expertise). Prices aggregate all of this information into a single, continuously updated number.

The cleanest intuition pump3 for why aggregating many small, noisy judgements can yield reliable forecasts — the principle underlying prediction markets — is the example of Francis Galton4 observing a contest in which villagers were invited to guess the weight of an ox. The median estimate turned out to be extremely close to the true weight, and it is the opening example of James Surowiecki’s The Wisdom of Crowds. As Philip Tetlock recounts and explains in Superforecasting:

When Galton watched people guessing the weight of the doomed ox, he was watching them translate whatever information they had into a number. When a butcher looked at the ox, he contributed the information he possessed thanks to years of training and experience. When a man who regularly bought meat at the butcher’s store made his guess, he added a little more. A third person, who remembered how much the ox weighed at last year’s fair, did the same. And so it went. Hundreds of people added valid information, creating a collective pool far greater than any one of them possessed. Of course they also contributed myths and mistakes, creating a pool of misleading clues as big as the pool of useful clues. But there was an important difference between the two pools. All the valid information pointed in one direction — toward 1,198 pounds — but the errors had different sources and pointed in different directions. Some suggested the correct answer was higher, some lower. So they canceled each other out. With valid information piling up and errors nullifying themselves, the net result was an astonishingly accurate estimate.

Prediction markets are designed to harness this dynamic, and improve on it in several respects. They align incentives, so that unlike surveys or pundit panels, traders are rewarded for being right and moving the price towards reality, and penalised for adding noise. They self-correct at the margin, because any mispricing attracts those who can profit by correcting it: when the price drifts from reality, the next trader to act is disproportionately likely to be someone who recognises the error, and their trade pushes the market back towards truth. And cross-market arbitrage squeezes out inconsistency, ensuring for instance that the prices of mutually exclusive events sum to one and that conditional probabilities respect Bayes’ rule, indirectly improving each component forecast. The result is a system that, like Galton’s ox-weighing crowd, aggregates dispersed fragments of knowledge while letting errors cancel out, but with built-in mechanisms that strengthen the signal and discipline the noise.

A concrete example makes this vivid. Consider a binary market: “Will Policy X pass by 31 December?” It opens at 50%. A civil-service insider, seeing a whip count, believes 75% and buys shares, pushing the price to 68%. Journalists report new defections; some traders update down to 60% and sell. A legal analyst notes an obscure procedural hurdle, sells, and price moves to 56%. Over time, as evidence accrues through news, leaks, and analysis, the price traces a path that — ideally — looks like a sequence of Bayesian updates on the true state of the world. At resolution, holders are paid £1 or £0; ex-post, the market’s entire time-series is a transparent, monetised, continuously-updated forecast.

So, that’s the idea. Prediction markets give us a way to harness the wisdom of crowds, and turn it into useful forecasts for decision-making. But I know from past conversations that you’re probably not convinced by this; indeed, you probably shouldn’t be, just yet. You’ve likely identified at least some flaws in this story.

Good: let’s turn now to rebutting some common objections.5

One of Kant’s aims in the Critique of Pure Reason is to provide a foundation for metaphysics, which has hitherto made no progress because its practitioners could not agree on the appropriate method or appropriate first principles. The Antinomies are a set of contradictory conclusions that metaphysicians have drawn. Kant intends to show that his critical philosophy, and in particular his doctrine of Transcendental Idealism (henceforth, TI) – that space and time are neither things in themselves nor properties of things in themselves, but forms of intuition shaped by subjects’ cognitive faculties – can resolve these matters. In particular, he argues that since the opposite assumption of Transcendental Realism (henceforth, TR) leads inexorably to these contradictory conclusions, this is a proof by contradiction for TI. I argue that the argument is ultimately uncompelling.

Kant claims that the Antinomies arise from Reason’s inevitable tendency to overreach. Reason is about drawing inferences from what one knows, so we can have better understanding; a rational explanation thus consists in showing how something follows necessarily from something else. In other words, we observe the “conditioned”, some state of affairs; and we reason (as it were) backwards, to understand why that state of affairs arose; and then why that state of affairs arose; and so on, until we arrive at the “unconditioned”, something which is not itself in need of explanation. The issue is that by the unconditioned, one might mean the first member of that series, or the series taken as a whole; either explanation is equally valid, and yet they contradict each other. For four questions in metaphysics, he takes the former explanation as the Thesis, and the latter as the Antithesis; the contradiction is the Antinomy. For instance, one is about whether matter is finitely divisible (Thesis) or infinitely divisible (Antithesis); another is about whether there is some necessarily existing being (Thesis) or if all beings are contingent (Antithesis). Each contradiction flows from the assumption of TR; thus, TR is false.

Even before we present Kant’s solution to the Antinomies using TI, there are several objections one might raise at this point. It is not self-evident, for instance, that the arguments for all Theses and all Antitheses are equally compelling and valid. It has not been the view of preceding metaphysicians that matter is both finitely divisible and infinitely divisible; rather, different philosophers have taken different, consistent perspectives, each arguing that her position is correct. One might thus claim that no contradiction emerges if one simply takes one side as being correct, and thus the inference to TI is flawed. Moreover, the “proof” of TI seems to depend on the “Supreme Principle of Pure Reason”, that “if the conditioned is given, then the whole sum of conditions, and hence the absolutely unconditioned, is also given.” (KrV A 20 / B 34). But the Transcendental Realist may simply deny this principle; then again, the arguments for the Theses and Antitheses would not be sound, so no contradiction emerges. Indeed, Kant himself does not think the Supreme Principle is knowably true: “Such a principle of pure reason, however, is obviously synthetic; for the conditioned is analytically related to some condition, but not to the unconditioned.” (KrV A 308/B 364).

These objections are unproblematic for Kant’s ultimate objective in this section, which is to say, securing a basis for metaphysics and creating agreement on first principles and method so that its practitioners’ views might converge. Kant himself need not accept every argument which has appealed to various philosophers on these matters, so long as he shows that they are all operating under the assumption of TR, and that rejecting that stance would resolve their disagreement. In particular, he has already provided positive arguments elsewhere in the Critique for TI, so the argument is not circular. However, as it relates to this indirect argument for TI, it is certainly a problem if no contradiction actually must follow from TR. Moreover, it remains to be seen if TI actually solves the Antinomies, as Kant claims; otherwise, we simply return to a state of ignorance. Thus, we shall have to consider the specifics of Kant’s arguments to determine if his proof is robust.

Let us first take Kant’s exposition and solution to the Second Antinomy, about whether there exist simple parts of matter, or if matter is divided to infinity. Suppose that TI is false, or equivalently that TR is true. Then exactly one of these disjuncts can hold, and moreover space and time must exist independently of our cognitive faculties, as properties or frameworks pertaining to things in themselves. Suppose matter is composed of simple, indivisible parts; then it would be impossible for these indivisible simples to constitute extended objects. Thus, matter must be infinitely divisible; but then an infinite regress of divisions is required, and it does not seem possible that actual objects can be so divided. So we have a contradiction: TR is false. Contrarily, suppose TI is true. Then we see that material bodies are not things in themselves, but mere appearances; since we can always divide matter infinitely in thought, matter is plainly infinitely divisible – there is no problem of actual, real objects somehow actually being divided into infinite parts (KrV A 434-36 / B 462-64).

One might object to this attempted reductio ad absurdum by noting again that the arguments given for the proposition that matter can be neither finitely divisible or infinitely divisible under TR are hardly unarguable. One might argue, for instance, that it is possible for continuous, extended objects to be built out of discrete elements in the same way that infinite sets in mathematics can be defined using finite elements combined with each other (for example, the recursive definition of the natural numbers). Equally, it might be argued that although it is difficult to see how a physically real object can be infinitely divided, this is not a compelling case for the proposition being contradictory. One could advocate for either of these arguments, or else advocate for the same epistemic humility advocated for by Kant regarding transcendentally real objects, without rejecting the view that space and time are properties of things in themselves. This brings us to Kant’s suggested resolution: as critics like Ameriks have noted, it does not really answer the question about matter. Instead, he simply shifts the question to a different topic, namely what is true about our ideas or perceptions. Certainly, if his doctrine of Noumenal Ignorance is true, then the problem of whether matter is finitely or infinitely divisible is relegated as unanswerable. But this is merely the same state of ignorance that pertained before regarding the status of matter understood as a thing in itself. Metaphysicians before could equally well have made arguments for the finite versus infinite divisibility of our idea of matter, but it is a substantially different question. Moreover, it is not obvious that Kant’s solution in this realm is not equally prone to Antinomies: one might argue that we cannot divide matter infinitely in thought, since we are finite beings, for instance.

Therefore, the general criticisms considered before remain devastating in the case of a particular Antinomy. It is beyond the scope of this essay to argue for all four Antinomies; nevertheless, the structure of argument will clearly apply in all cases. The argument that the assumption of TR leads inevitably to contradiction, and thus must be rejected in favour of TI, which resolves the Antinomies, is flawed because the arguments for the Thesis and Antithesis are not necessarily valid (a proposition which must be considered on a case-by-case basis for each Antinomy), or sound, because of status of the Supreme Principle of Reason. Most importantly, the same move Kant makes, about considering appearances rather than objects, is available even to the Transcendental Realist; it does not answer the question, nor demonstrate that TI resolves the contradiction. Hence, the indirect proof Kant offers is ultimately unconvincing.

Result

Mark: 74% (Low First), averaged across this and two other answers.

In this essay, I consider Hume’s argument about induction, and argue that although he succeeds in demonstrating that the process of inductive reasoning he describes is not epistemically justifiable, he does not succeed in establishing grounds for scepticism because such reasoning is not required to obtain beliefs about unobserved matters of fact.

Hume believes that the objects of human inquiry can be distinguished into “Relations of Ideas”, such as mathematical objects, knowledge of which is a priori and certain; and “Matters of Fact”, which are known a posteriori on the basis of experience, since they depend on what is actually existent in the world. Since knowledge of matters of fact is obtained via experience, he addresses the question of how we arrive at beliefs about that which we do not observe, such as our belief that the sun will rise tomorrow. He claims that the basis for such beliefs is inference from that which we have observed, through induction: we believe that the sun will rise tomorrow because it has risen on every previous day. Of course, such an inference must be justified, and he claims that the justification for such inferences is founded on the principle of cause and effect: like causes lead to like consequences; when a billiard ball strikes another, it causes the movement of the other, so we can infer that when the same thing happens in future, the same causal relationship will again cause similar movement. However, Hume argues that the relation of cause and effect is not one we ever experience directly; all we ever experience is the constant conjunction between various kinds of events. There is, he claims, no legitimate argument from the fact that in our experience, some event has typically been accompanied by another, to the view that it will always be so accompanied in future. The best one can do is appeal to the uniformity of nature, that “the future will be conformable to the past”; but this cannot be justified inductively, for the argument would be circular; and nor can it be demonstrated through reason. Thus, inductive reasoning has no rational foundation; it is a mere custom, or habit.

Against this, it can be argued that Hume has too high a standard in mind. In particular, all he has shown is that there is no deductively valid argument for the inference from observed matters of fact to unobserved matters of fact. But as Strawson argues, “deduction is one kind of reasoning and induction is simply a distinct, fundamentally different kind of reasoning.” There is no sense in thinking that the latter must conform to the standards of the latter; the question is whether inductive inferences of the kind we frequently make are inductively justifiable, which they trivially are. Moreover, there is a good pragmatic reason for believing that we are on sound footing in making inductive inferences: Hume himself concedes that “Custom … is the great guide of human life”, and since we cannot do without inductive reasoning, it remains the best we can do in discovering what’s true.

However, neither of these arguments satisfactorily deal with the problem of induction. As Laurence Bonjour puts it, “it seems to be suggested (though often not very explicitly), the skeptical challenge is adequately dealt with, even if not exactly refuted” (emphasis mine). To argue as Strawson does that inductive inference is almost definitionally justified because it is the cornerstone of inductive reasoning does not tell us anything about what is or is not the case. Matters of fact, in Hume’s terminology, are true or false on the basis of what actually exists in the world; rephrasing our epistemic standards does not change that. If indeed it is true, as the pragmatists argue, that we cannot help but rely on induction, then either there is some identifiable reason that it is a useful guide to navigating reality (in which case, we must identify the reason), or else we are back to Hume’s view that although we cannot help but rely on it, there is no rational case for it; after all, beliefs arrived at through induction sometimes turn out to be false.

It has been suggested, for instance by Beauchamp and Rosenburg, that Hume did not mean to advocate the sceptical conclusion, and only demonstrate that induction did not attain the epistemic rigour of deductive reasoning. One reason for thinking this is that he himself uses inductive reasoning in his philosophy of natural religion, arguing that the reason one typically believes people’s testimony is because one usually finds that it has been correct in the past. But for the reasons given, this is not tenable: the argument against induction does lead one to scepticism about conclusions one thereby obtains, unless it can be defeated.

A part of Hume’s argument with which one might take issue is his account of causation. His inductive scepticism depends on the fact that if we consider our experience, we never actually “find” a cause. If such causal relations could truly be observed, then we would be able to know the effects of some events a priori, since to say “A causes B” is to say that “A necessarily leads to B”. But whether we are observing external bodies or our own internal decisions, it is only ever through experience that we learn the effects of an event. Thus we can never get this impression of necessity which must be the concomitant of causation; all we ever find is mere “succession” of events.

Anscombe has criticised Hume’s introspective method as motivated reasoning: “It is argued that ‘all we find’ is such-and-such, and it turns out the arguer has excluded from his idea of ‘finding’ the sort of thing he says we don’t ‘find’”. Hume is perfectly content to say we perceive, say, a billiard ball as a individuated substance (and not, say, a collection of qualities); yet he denies that we find causality. Thus she argues that this does not demonstrate what Hume thinks it does. Furthermore, Hume’s account of causality is that it is events which cause other events; but this is not self-evidently the idea of causality we possess. For instance, in Kant’s conception, causes are substances (or their causal powers), and effects are the changes of state in those or other substances. If we adopt such a model, it arguably transpires that we do in fact observe causality in experience, and this may provide a foundation for induction.

Taken together, these criticisms show that Hume’s sceptical argument fails, because it does not rigorously dispense with causal realism. Alexander Miller uses the example of a billiard ball which collides with another; then the second billiard ball moves away, and simultaneously, an onlooker sneezes. The point is that the collision caused the movement, but not the sneeze. On Hume’s account, this is because there is a constant conjunction in the one case and not the other; usually people don’t sneeze here. But supposing in someone’s experience they always did, perhaps because they have an allergy to chalk. Then it would be possible to form an explanation of the conjunction, as a state-transition precipitated by a causal power of that element. This hypothesis implies a prediction for what will happen in the future; the conditions of this “experiment” can be varied. Thus, we arrive at a Popperian view: as David Deutsch puts it, “inductivism rests upon a mistaken idea of science as seeking predictions on the basis of observations, rather than as seeking explanations in response to problems”. We obtain knowledge about unobserved matters of fact by having an explanatory model of the causal relationships at play in the world, and the explanation enables us to make predictions.

Thus, Hume’s sceptical argument dissolves. It is true that inferring that the future will be like the past is invalid, and Hume demonstrates the problem with such reasoning. But if one reconceives of the nature of causality as discussed, and of the nature of reasoning used in forming beliefs about unobserved matters of fact, the grounds for scepticism disappear.

Result

Mark: 74% (Low First), averaged across this and two other answers.

This essay presents Locke’s separability and resemblance criteria for distinguishing between primary and secondary qualities, and argues that the distinction can survive under scrutiny, if it is understood through the lens of his corpuscularian commitments.

One might see Locke’s distinction as a response to Descartes’ example of how, when a piece of wax is melted, all of its sensory qualities (its taste, smell, colour, shape, sound, temperature, hardness) disappear, and nevertheless one judges that the same piece of wax remains. This is a challenge to the empiricist assumption that knowledge is acquired solely through the senses; the mind must have an innate intellectual capacity to grasp the idea of a substance that is merely extended, flexible, and changeable, in spite of how its sensory features change.

Thus, a primary quality of an object is one which is ‘utterly inseparable’ from it. That is to say, however the object is altered or transformed, that quality – examples of which include “Solidity, Extension, Figure, Motion, or Rest, and Number” – remains. In contrast, secondary qualities like “Colours, Sounds, Tastes”, are not in this way separable; they are “nothing in the Objects themselves, but Powers to produce various Sensations in us”, a power which emerges from the combination of primary qualities acting together. This definition leads to a second way of distinguishing the two kinds of qualities: ideas of primary qualities resemble the corresponding feature of the object itself, while secondary, or “imputed” qualities, as mere powers, do not.

Several criticisms are immediately apparent. In the first place, one might ask whether, in the separability criterion, Locke is referring to determinables (like colour) or determinates (like red, blue, or yellow). It cannot be his argument that determinate primary qualities are inseparable from objects, since clearly the particular determinates of the primary qualities he give can change when an object is transformed; we can clearly change an object’s figure, for instance. So he must mean that primary determinable qualities are inseparable from objects. But one might argue that secondary determinable qualities are likewise inseparable; one can change an object’s colour, but not remove its colour entirely. Moreover, the resemblance criterion appears incompatible with Locke’s representative realism, according to which we only experience the external world indirectly through ideas objects engender in us. Thus it seems senseless to suppose that sensory input can shed any light on whether an idea resembles the underlying physical object, when by definition, we never have unmediated access to the object.

Against the first criticism, Locke can respond that secondary determinable qualities depend on perceivers; that is to say, an object only has a colour when it is being perceived. On the other hand, primary qualities exist in objects even without direct sensory observation. This is the sense in which they are “inseparable” from objects. A tree in a forest, absent any observer, must still have solidity, extension, figure, and so on – it is inconceivable to think it is shapeless in such a scenario (“ a body with no extension or shape” collapses into incoherence – we would no longer be thinking of a body). But it is perfectly intelligible to suppose that if it falls, it doesn’t make a sound, since that is simply a power it produces in observers. Its primary qualities still interact in the same way to produce sound waves, but with no observer, it has no sound (hence, sound is a secondary quality). Hence, Locke is often thought to be arguing that primary qualities are “intrinsic”, while secondary qualities are found only the interaction of the object with the world. We can understand both this view, and Locke’s response to the second criticism about resemblance, by understanding his micro-structural story. The distinction between primary and secondary qualities is motivated by his commitment to corpuscularianism, the view that any physical object is composed of tiny particles (‘corpuscles’) whose basic qualities – such as motion, size, and shape -- determine the properties of the object. Even when no colour is present, the corpuscular “primary” arrangement (size, figure, motion of particles) remains. These micro-features ground the dispositional power to produce colours or sounds, but the power does not amount to a colour actually being in the object until the relational conditions are met. And it is in this sense that primary qualities “resemble” the bodies themselves, and are intrinsic.

This response to these criticisms shows that his distinction is certainly consistent, in the sense that it is well-defined and does not collapse immediately into incoherence. That is, the ostensible tension between the other views he advocates in his Essay Concerning Human Understanding and the separability and resemblance criteria disappears when one considers the corpuscularian dimension. Furthermore, this account corroborates Locke’s view that the resemblance of primary qualities and objects explains how physical objects engender ideas of each kind of quality in us.

Nevertheless, there are other criticisms that have been raised, most notably by Berkeley. One objection he raises is that since by “resemblance”, one means that both relata share properties, it is absurd to suggest that an idea can resemble an object at all: he says “an idea can be like nothing but an idea”; it cannot have extension or figure in the way Locke claims objects do. Jacovides has argued that “the best reading of Locke’s theses takes them literally”, suggesting that Berkeley’s literal reading has force; it was a “common doctrine” in Locke’s time that objects and ideas might be related in this way. As well as this, Berkeley argued that primary qualities cannot be inseparable or intrinsic to objects, since one and the same grain of rice can appear to be large to a mite, yet small to a human. Hence, Locke’s view leads to a paradox of conflicting appearances: it cannot be the case that the same glass of water leads to the idea of hot in one person, and cold in the other, and for both incompatible ideas to be veridical.

Despite Jacovides suggestion that Locke may have meant what Berkeley takes him to mean, it is overly ungenerous to suppose that Locke argued that ideas and objects were the same kind of thing, and that their “resemblance” is to be understood in terms of ideas possessing primary qualities, rather than being of those qualities. Such a view is plainly unworkable, and the textual evidence – setting aside the historical intellectual context – is slim. Granted, Locke writes “the Power to produce any Idea in our mind, I call Quality of the subject”; but if we interpret this in the sense argued for previously, there is no real difficulty here. Moreover, the problem of conflicting appearances is similarly unproblematic. If we understand this, as Kalderon advocates, as a paradox in which an object cannot have two incompatible qualities if both qualities are veridical, Locke need only deny that one of variation, incompatibility, and veridicality holds in any given case. In the example of the mite, it is straightforward to deny that the small and large appearances are incompatible, since size is a relational quality: the grain of rice can be small-to-me and large-to-the-mite with no contradiction. It is easy to argue similarly in response to any particular apparent contradiction Berkeley might raise.

Hence, Locke’s distinction between primary and secondary qualities, though it appears contradictory, can be clarified through the doctrine of corpuscularianism, in such a way that both the separability and resemblance criteria are clear and consistent. Moreover, I have shown that Berkeley’s criticisms either misunderstand Locke’s distinction, or fail to disturb it.

Result

Mark: 74% (Low First), averaged across this and two other answers.

This essay considers the intuitive appeal of the presentist position that ‘only what is the present exists’, and shows that neither core intuition can persist under scrutiny; specifically, the failure of presentists to provide truthmakers for other times undermines the common-sense appeal, and further suggests that this position is irreconcilable with the dynamical view that ‘what is present changes over time’. Thus, the position generates several commitments which are difficult to maintain, especially in light of modern physics; hence, I argue that presentism is incompatible with relativity theory.

The view that only the present moment exists is called presentism; I shall parse its central claim as “for any entity x, x exists if and only if x is present”. On this view, individuals from the past (say, Caesar) and events in the future (say, a forthcoming eclipse) have ceased to exist, or may yet exist, but they do not. It is a variant of the A-theory of time, which holds that tense is not merely a matter of perspective, but a feature of reality itself.

The position’s primary draw is its intuitive appeal; indeed, Zimmerman has argued that “it is simply part of common sense that the past and future are less real than the present”. After all, take language as it is commonly used: one typically say “dinosaurs no longer exist”, and not (as the eternalist might have it), “dinosaurs exist at a different location to us in the four-dimensional spacetime manifold”. Moreover, our experience of the passage of time seems to be dynamic: the past is unchangeable, the future is open, but we move through time, experiencing successive moments which (at the moment we experience them) are called ‘the present’. Nevertheless, neither of these intuitions can persist under scrutiny, and the position generates several commitments which are difficult to maintain.

One issue with the former motivation is that ordinary language also presumes countless propositions about the past that can be true or false. “Napoleon was a British monarch” is a statement that is understood to be false. On the common sense view, the best explanation for this is simply that there is an entity, Napoleon, with several properties (such as “being Corsican”), which do not include being a British monarch. Thus, one critique of presentism holds that it is unable to provide an adequate account of what makes past- and future-tensed statements true or false.

Several responses are available to the presentist, but none are compelling. One strategy is to suggest that although only present things exist, we can postulate the existence of ‘ersatz times’ that represent how things were or how they will be, and that the truthmaker for past-tensed propositions can be understood with reference to these ersatz times. That is, just as the proposition “Hilary Clinton could have become president” is made true by there being a ‘possible world’ in which she beat Donald Trump to the presidency, “Napoleon was a British monarch” is made true by there being no ersatz past time at which Napoleon was in fact a British monarch. There are other similar responses which appeal to ‘surrogates’ of various kinds for other times, such as ‘past-tensed properties’ (a presently existing object having the property that it was such-and-such) or temporal distributional properties (having the property of being x then y).

But such a reply immediately abandons the “common sense” appeal of presentism, which partly came from the fact that only the present moment seems vivid and really real. Now, suddenly, we must contend with these abstract entities which abstractly represent past and future moments; and as Lisa Leininger has noted, there is no reason to suppose that the ersatz times actually correlate with reality. The only way to “explain” why there is no ersatz past time at which Napoleon was a British monarch is to simply postulate it as a brute fact, at which point one is either simply speaking of the past existing (not an abstract representation of it), or demanding the acceptance of what amounts to a miracle. Leininger’s response applies equally to other surrogate arguments, since if indeed surrogates could exist in a world with only one moment, then no adequate account of their link to actual past events can be provided.

As well as demonstrating that the presentist is unable to solve these ‘truthmaker problems’ (and concomitantly, cannot provide an account of cross-time relations such as “Lincoln was taller than Napoleon”), Leininger advances a positive argument that the presentist finds herself in a contradiction. This is related to the second foregoing reason I suggested presentism has intuitive appeal, that it claims to account for the dynamic ‘flow’ of time. More precisely, as Kristie Miller has put it, “presentism combines an ontological thesis with a dynamical thesis”: the former is that “only the present moment exists”, and the latter is that “the present moves: which moment is the present changes”. But having now shown that presentism has no plausible account of truth-makers for past-tensed propositions, it seems to follow that these theses are incompatible. The dynamical thesis (or ‘change thesis’) holds that at one moment, an object can have some property; but then time passes, and a new moment becomes the present, and at this moment it can have some different property. But this form of words requires that both times exist; if only the present moment exists, and truthmakers for other times aren’t possible, then change is in fact impossible, and the dynamical thesis cannot hold.

But even if there were some other truthmaker for past- and future-tensed propositions that we have failed to consider, considerations from physics show that it cannot be upheld in any case. For one thing, given the disconnect between the time it takes us to perceive our surroundings and for the surroundings to change (for instance, given the time it takes light to reach our eyes), presentism implies that most of what we perceive is not real. Arguably, this is an unimportant objection – the delta is sufficiently small that we can nevertheless navigate the world coherently – it provides an intuition pump for why the notion of objectively privileging one moment over all others is difficult. According to our best understanding of the universe given by the theories of general and special relativity, the same event may happen at different times for different observers; there is no objective moment that we could call ‘the present’.

Therefore, the presentist claim that “only what is present exists” is incorrect, and collapses in every sense. Relativity theory suggests there is no objective moment one could call the present; even if there were, it is difficult to maintain that no other moments exist, since otherwise we would have no basis on which to say that claims about the past can be true or false; and even if that were not so, no plausible account can be given of how which moment is the present changes, and account for our dynamic experience of the passage of time – thus undermining all intuitive, common-sense reasons for believing presentism.

Result

Mark: 76% (Low First), averaged across this and another answer.

In this essay, I shall consider the conditions under which a record can convey information, and show that low entropy is one necessary condition. Accordingly, I consider Boltzmann’s arguments about entropy and statistics to explain that records of the past depend on an increase in entropy in one direction, namely from the past towards the present. I elucidate the criticism that since the laws of physics are time-symmetric the statistical argument does not provide robust grounds for thinking the increase is so unidirectional, and suggest that the past hypothesis ultimately grounds the entropic asymmetry that explains why only records of the past, and not the future, can exist.

By a “record” (or “measuring device”) I am referring to any system which begins in some ‘ready’ state, and which after interacting with another system reliably transitions into another ‘record-bearing’ state, so that one can infer with high probability from the latter the nature of the interaction – some event in the past. Contrarily, observing a record can never lead one to have knowledge of the future, since any observed state is compatible with a large number of possible future events. I shall henceforth refer to this condition as ‘epistemic asymmetry’.

Ludwig Boltzmann argued that this epistemic asymmetry is grounded in entropic asymmetry, which can in turn be explained by statistical mechanics. Entropy is a measure of disorder in a system. Any system can be understood at two levels of granularity: its ‘macrostate’, an overall high-level description of the system’s behaviour; and its ‘microstate’, the configurations of the units that make it up (like atoms or molecules). When we speak of a system being high or low entropy, we are referring to its macrostate exhibiting a large or small amount of order respectively. But since most possible microstates will lead to apparent randomness in a system’s macrostate, and only a small number of specific microstates cause it to appear ordered, there is a statistical tendency for the constituent elements to become disordered. This is the second law of thermodynamics: the overall entropy of a closed system always either increases or stays the same.

The relevance of this to measuring devices is that for a record to provide us with knowledge, it must be in a low state of entropy. It cannot have arisen spontaneously; we must have some reason for thinking that the record-bearing state is improbable, but for the interaction that led it to that state. For instance, a footprint on a beach is indicative of someone having trodden on the sand only because that configuration of sand particles very rarely organises itself into that shape. Thus, the low entropy condition of a record must have arisen from a state of even lower entropy. Absent Boltzmann’s idea, this leads to an infinite regress; but by understanding that entropy increases over time for statistical reasons, we see that there are very few situations that could have led to the observed state of the measuring device, but many situations to which it could lead. A footprint tells us someone stepped on the beach; it does not preview who will do so tomorrow.

But this explanation is not without flaws. For one thing, the laws of physics are time-symmetric. But Boltzmann’s explanation seems to imply that entropy should increase statistically towards both the past and the future. If we do not properly ground the entropic asymmetry of time, it will hardly suffice as an explanation for epistemic asymmetry. Moreover, although low-entropy states are statistically improbable, they are not impossible, so on this view it may be possible to sometimes have records transmit information about the future.

The statistical response from Boltzmann has it that the universe – for the statistical reasons given – is almost always in a state of maximal or near-maximal entropy. But since time ‘extends’, as it were, for a very long time, there will inevitably be occasions in the lifespan of the universe when entropy decreases before returning to the maximum. Since the very possibility of life presupposes low entropy, we only ever observe such instances. Thus life necessarily takes place on an entropic gradient: a period in which entropy is decreasing from one side, as it fluctuates down from its usual maximum condition; and increases on the other, as it returns to that state. On this view, time has no ‘intrinsic’ direction; it is simply a matter of how creatures on the entropic gradient perceive it.

As discussed, a record can only transmit information from a low entropy state. For us to have confidence in what it tells us, it might seem knowledge that it was previously in the ‘ready’ condition, requiring yet another record to tell us that it was so. But this is absurd, for it leads to an infinite regress. So it must be that we have an independent reason for thinking that the record-bearing state was not simply the initial state, but a consequence of some event. Therefore we can only have knowledge of events on the part of the entropy gradient on which entropy was decreasing. Definitionally, to those creatures – say, humans – that direction will be called ‘past’; the other direction, of which we cannot similarly obtain knowledge from measuring devices, we call ‘future’. Thus that we can have records of the past but not the future is a direct consequence of how these are defined by creatures such as ourselves. The direction of time is not an objective feature of the universe, but a matter of how we perceive the entropic gradient. There may be other creatures whose perception is ‘reversed’, who have knowledge of what we call the future, but which they call the past.

Huw Price has noted a flaw in this reasoning, namely that fluctuations from the ordinary maximum state of entropy are statistically more likely to be very small than very big. Thus, conditional on our existing and having perceptions, we should expect that we are located on a very slight deviation rather than a very large one. But if that is so, the evidence we have from the direction of lower entropy, that we call ‘the past’, would in fact be the result of random fluctuations. They would, in other words, not be reflective of actual events from that time, but totally illusory. On Boltzmann’s view then, we must expect with high probability that our records of the past, and thus any knowledge we have of the past, is mistaken.

In order to solve this problem, several philosophers have argued for the necessity of an additional cosmological assumption, the “past hypothesis”, which posits that the universe began in a condition of extraordinarily low entropy. On this account, it is much easier to explain why entropy statistically increases only towards the future. Thus, knowledge of the past encoded in records need not be abandoned as probably illusory, but as legitimately reflecting the way that it has interacted with events as entropy has increased throughout time – still, no doubt, with fluctuations, but with a genuine overall direction that is not merely a matter of perspective (in the sense that all creatures at any point in time will see entropy increasing in only one direction).

Although critics have argued the sheer improbability of the universe having been in such a low entropy condition, Callender and others have defended the hypothesis as a ‘brute fact’: if we accept it, then we can make sense of the several temporal asymmetries that are otherwise perplexing, including the epistemic asymmetry that has been the subject of this essay.

Result

Mark: 76% (Low First), averaged across this and another answer.

Scott Alexander wrote a blog post titled, ‘Come On, Obviously the Purpose Of A System Is Not What It Does’. I hope the title of this piece plainly telegraphs that I do not think this is so obvious, and wish to defend the contrary view — that often, analysing the purpose of a system in terms of its behaviour is a useful heuristic.

Scott’s post considers some systems and some things they do, and notes that it is “obviously false” that the observed outcomes reflect the purposes of the given systems:

• The purpose of a cancer hospital is to cure two-thirds of cancer patients.

• The purpose of the Ukrainian military is to get stuck in a years-long stalemate with Russia.

• The purpose of the British government is to propose a controversial new sentencing policy, stand firm in the face of protests for a while, then cave in after slightly larger protests and agree not to pass the policy after all.

• The purpose of the New York bus system is to emit four billion pounds of carbon dioxide.

He then considers the possibility that these types of cases are not what people have in mind when they assert that the purpose of a system is what it does (POSIWID); so for good measure, he “searched the phrase on X/Twitter to see how people were using it in the wild”. It transpired that the random social media posters were being quite stupid, so he confidently concludes that there can be no sensible uses of the phrase after all.

In my shock and surprise that the usually-so-reasonable random posters on X/Twitter could be so sloppy, I shall engage no further with these examples. However, I did in the comments take issue with Scott’s examples, and used them to explain why and when POSIWID can be a useful heuristic:

I think POSIWID is best applied to bureaucracies or large structures where the reason bad outcomes occur is not because of difficult battles with reality (like government or hospitals or the Ukrainian military), but because of the way incentives are set up in the system.

If someone said, “the purpose of the Civil Service is to drive through new, innovative ways of delivering rapid change!”, that would clearly be absurd. That may be their goal, or how they see themselves; but the purpose of the system is not defined by either of those things. If it was, they wouldn’t incentivise caution and slowness. Whether that’s good or not, the purpose of the Civil Service is best approximated by what it does!

In other words, I agree that sometimes people invoke this heuristic in support of baseless conspiracies, by attributing Everything That Happens to malicious intent and failing to notice that sometimes bad outcomes are just the result of incompetence, limited resources, or bad luck. Curing cancer is hard!

But there are other occasions when outcomes are in fact strongly linked with the institutional structure of the system — what it incentivises agents within it to do, what it penalises them for, and so on. In these cases, it is reasonable to understand the purpose of the system in terms of the actual outcomes it creates, because the system could, by changing its structure, actually obtain different outcomes.

This is in contrast to the strawmen examples1 Scott gives: there is not much the Ukrainian military could change to be more effective in their war with Russia, so the stalemate is a consequence of hard constraints and the presence of a powerful adversary. If there were systemic changes they could make to massively increase their chance of success, it would be reasonable to wonder if the stated purpose of military effectiveness was the actual purpose. It is quite possible for a military to be set up in a bad way that fails to achieve this end; its purpose might practically be to confer status on certain elites, for instance.

Scott responds to my line of argument by noting my use of the word “goal”. He claims that this is synonymous with “purpose”, and thus in conceding that, “[Driving innovative change] may be their goal”, I have unwittingly conceded defeat:

It sounds like Aashish think [sic] it’s useful to use the word “goal” to discuss what a system is trying to do, separately from what it does or doesn’t accomplish. I agree! I just think “purpose” is a synonym for goal.

If you use POSIWID, you have to posit some kind of weird new ontology where “purpose” means the opposite of “goal”. If you don’t use POSIWID, you can just keep the words “purpose” and “goal” having their regular everyday meaning, and describe this state of affairs with phrases like “The goal/purpose of the Civil Service is to deliver rapid change, but due to perverse incentives, its actual effect is to prevent change.”

But I don’t think I’ve claimed — or need to claim — that “purpose means the opposite of goal”. I’m just not convinced they’re interchangeable in this context. There’s a short proof of this: “goals” are properties of individuals, grounded in their mental states; “purposes” are properties of systems. Systems are not necessarily individuals. QED.

The issue at stake is simply whether it makes more sense to identify the purpose of the system with the goals of some relevant individuals (like an institution’s leaders or founders), or with what it actually does. I do agree that sometimes the purpose of a system can be identified with someone’s goals! This happens when some individual has a large degree of control over the system, like a CEO over a small company or a dictator over a state apparatus. But that’s because that person’s goals are unusually effective at shaping the system’s design, incentives, and outputs — that is, what it does.

But if we think goals are what ultimately matter in general, we run into a problem: it isn’t clear which set of goals should be taken to constitute the system’s purpose. The founders may have had one vision, and the current leaders another. Those within the institution may pursue a mix of personal advancement, idealistic reform, or bureaucratic maintenance. These goals often diverge and conflict; is the purpose of the system some muddled average of their goals that no individual actually holds?

Though I’ve now explained why I don’t think it usually makes sense to identify “purpose” with “goal”, I haven’t yet explained what distinct meaning “purpose” I think actually has. In particular, I haven’t distinguished it from “behaviour” or “function”.2

To do that, it might be useful to remember that the POSIWID heuristic has its origin in cybernetics. A foundational3 article in that field, “Behavior, Purpose and Teleology”, by Arturo Rosenblueth, Norbert Wiener, and Julian Bigelow provides a definition of these terms that fit their “regular everyday meaning”:

[T]he behavioristic approach consists in the examination of the output of the object and of the relations of this output to the input… [it] omits the specific structure and the intrinsic organization of the object. This omission is fundamental because on it is based the distinction between the behavioristic and the alternative functional method of study. In a functional analysis, as opposed to a behavioristic approach, the main goal is the intrinsic organization of the entity studied, its structure and its properties.

Or to rephrase: “behaviour” is the short-hand for what a system actually does; “function” is what a system is — a holistic account of its internal organisation and mechanisms that tells us how its behaviour would vary across different environments.

Where does purpose fit into this picture? One way to think about what we mean by “purpose” is that we’re asking, “what is this system for?” What role does it play in the broader ecology of systems that it’s embedded in? What outcomes does it reliably produce, and if it didn’t exist, what would be different?

Evidently, analysing anyone’s intentions is usually not going to be a productive way of answering these questions. Instead, we want to look at the system’s stable pattern of behaviour, which emerges from the way its function interacts with the existing environment. From this, we can infer the implicit justification for the system’s continued existence — what problems does it solve? That is what I mean by purpose.

This is well-understood in other contexts. The purpose of a thermostat is to maintain room temperature. How do we know this? Because its internal mechanisms respond to deviations from a target value, resulting in stable, homeostatic outcomes. The purpose of a bird’s wings is to enable flight. In this case, unlike with the thermostat, nobody had that goal in mind, because nobody designed the wings. But we understand their purpose from what they do.

In the more general case, I claim that it makes more sense to infer the purpose of a system from its function, or what it is, than to identify it with someone’s goals. And sometimes, there is a strong correlation between what it is (incentives, institutional structure, constraints) and what it does (the outcomes it attains). In such cases, inferring purpose from behaviour is a sound heuristic, and one that is useful because analysing all of the internal workings of a system is difficult. It’s a much sounder heuristic than the notion that its purpose can be found in “the intentions of those who design, operate, or promote it”.4

In Scott’s examples, the POSIWID heuristic is less sound because the behaviour of the system is constrained by the sheer difficulty of the problem they’re trying to solve; even an optimally designed system would be unable to cure all cancer patients or win all wars. So we would have to determine the purpose through the more difficult task of directly analysing the structure of the system.

But this isn’t always the case! Often, systems produce bad outcomes because the structure of the system is “designed” (not necessarily consciously) to produce them. And this is important to understand, not to be paranoid or conspiratorial, but because sometimes a better designed system really could produce better outcomes.

POSIWID is not meant to put an end to conversation or replace analysis. It is meant to be a useful starting point for analysis. It isn’t always appropriate, but it often is.5 I see no sense in discarding it wholesale because it fails in edge cases or because it has occasionally been invoked in stupid ways. If that were the standard, we’d probably have to give up on saying anything at all, and sit forever in enlightened silence. Wittgenstein would approve.

This essay explains Kant’s distinction between analytic and synthetic judgements, and argues that it cannot be sustained without an objective standard for conceptual content.

Kant defines analytic judgements as those where the predicate is “covertly” contained within the concept of the subject, so that denying the predicate leads to a logical contradiction; they are therefore “judgements of clarification”. He gives as an example, “All bodies are extended”, since our concept of the subject ‘body’ already includes the idea of taking up space, so the predicate ‘extension’ is built into its definition. By contrast, synthetic judgements are “judgements of amplification”: the predicate adds to the subject something which “could not have been extracted from it through analysis”. His example is, “All bodies are heavy”, as the concept of ‘body’ does not include the idea of weight; we can conceive of a massless body, and so we must go beyond mere analysis and refer to experience to determine whether the judgement is true (Kant, 1998, p.141).

Kant notes in introducing this distinction that he is considering only “affirmative judgements, since the application to negative ones is easy” (Ibid.). Even so, a common objection to this distinction holds that it is too narrow, since “it applies only to judgements of subject-predicate form”, but many judgements – like disjunctive judgements, which have more than one subject – do not have the form ‘S is P’ (Van Cleve, 1999, p.19). Thus, insofar as Kant’s distinction hinges on the predicate being contained within the subject – what Van Cleve calls ‘the containment characterisation’ (Ibid., p.18) – it is too restrictive to account for various judgements of interest to him, including conditional statements (‘if A, then B’) and contrapositive statements (both crucial to mathematical reasoning).

This objection is easily overcome, by altering slightly the emphasis of the earlier definition. If we take as the fundamental feature of analytic judgements that their denial results in a contradiction (originally noted as a mere consequence of the containment characterisation), the distinction can be applied to a wider range of judgements. (Kant, 1998, p.280) himself stresses the importance of contradiction: “If the judgement is analytic, whether it be negative or affirmative, its truth must always be able to be cognized sufficiently in accordance with the principle of contradiction”. On this view, the containment characterisation is merely a special case of the criterion of analyticity that applies to subject-predicate judgements.

This argument thus causes no difficulty, but yields the following revised account of the analytic/synthetic distinction: a judgement A is analytically true iff from its negation, we can derive a formal contradiction using only laws of logic and substitutions authorized by definitions; it is analytically false iff we can derive a contradiction in this way from A itself; it is synthetic iff neither of these hold – that is, it is not analytic (Van Cleve, 1999, p.20).

Kant’s Leibnizian contemporaries, J.G. Maass and J.A. Eberhard, raised another challenge I will call the ‘Objectivity Problem’. Their concern was that “Kant’s division of judgements into analytic and synthetic [is] purely relative, in other words subjective or psychological” (Rovira, 2020) because there is no objective test for what is “contained” in a concept. In the Prolegomena (Kant, 1977), “Gold is a yellow metal” is given as an analytic judgement, since “my concept of gold […] contained the thought that this body is yellow and metal”. But different knowers attribute different content to a term like ‘gold’: for laypeople, it may only include ‘a yellow metal’; for chemists it may also include ‘atomic number 79’. So the statement, “Gold has atomic number 79” might be synthetic for the layperson yet analytic for the chemist. If the same judgement can be simultaneously analytic and synthetic depending on who asserts it, the distinction would seem to lack the objectivity required for it to serve as a fundamental division in epistemology. Note that treating the contradiction characterisation as primary does not eliminate this objection, since (except in the case of logical tautologies) the question remains whether the relevant contradiction test depends on subjective conceptions rather than an objective standard.

One response to this argument, proposed by J.G. Schultz, is that these are in fact two different concepts masquerading under one word. One thus distinguishes between sentences and judgements: the layperson’s concept of ‘gold’ is not the same as the chemist’s, so although the sentence “Gold has atomic number 79” is synthetic for the former and analytic for the latter, “such relativity will not undermine Kant’s project in the slightest”, for they are expressing different judgements and no contradiction arises (Van Cleve, 1999, p.19).

This ostensibly compelling response sidesteps the crux of the matter. In genuine disputes – say, over whether geometry is synthetic (Kant’s view) or analytic (the Leibnizians’ view) – the parties are not using different concepts for ‘triangle’, and yet they disagree on whether “the interior angles of a triangle sum to 180 degrees” can be deduced simply by unpacking the concept. As (Hogan, 2013) stresses, Kant’s link between analytic judgements and logical contradiction presupposes a stable, intersubjectively agreed content. If one can simply expand a concept indefinitely (for instance, defining ‘event’ as ‘a caused occurrence’), many of Kant’s allegedly synthetic truths would collapse into trivially analytic ones. Likewise, Kant’s claim that ‘body’ analytically includes ‘extension’ but not ‘weight’ requires a principled standard for deciding which marks intrinsically belong to ‘body’, independent of any particular thinker’s associations or experiences. Hence, Schultz’s solution does not fully address whether there is an objectively verifiable way to see that geometry (or any domain) must rely on synthetic rather than analytic reasoning; Kant requires a further account about how we fix the content of shared concepts and why geometry counts as “irreducibly synthetic” by that standard. Kant tries to secure objectivity by demanding proof that a concept truly applies to something real: before one can assert a judgement is analytic, one must show that there is actually an object matching the concept at issue. In foregoing example, simply defining ‘event’ as involving a cause does not automatically guarantee that all events in nature must have causes. One must also show – synthetically – that reality features ‘events’ instantiating that expanded definition (Schulz, 1790). But this approach makes his distinction circular: he calls a judgement synthetic if verifying its content requires going beyond the subject-concept, yet establishing what that subject-concept legitimately contains often looks like it also depends on some broader empirical or intuitive check.

Thus, even after reformulating Kant’s analytic/synthetic distinction in terms of logical contradiction to withstand the charge of narrowness, it cannot be sustained in the absence of an objective criterion for fixing conceptual content without becoming circular.

Bibliography

Hogan, D., 2013. Metaphysical Motives of Kant's Analytic-Synthetic Distinction. Journal of the History of Philosophy, April, 51(2), pp. 267-307.

Kant, I., 1977. Prolegomena to Any Future Metaphysics. s.l.:Hackett Publishing Company, Inc..

Kant, I., 1998. Critique of Pure Reason. Cambridge: Cambridge University Press.

Rovira, R., 2020. Is the division of judgments into analytic and synthetic relative? The discussion between Maaß and Kant (through Schultz). Kant-Studien, 111(3), pp. 445-469.

Schulz, J., 1790. Rezension von Johann August Eberhard, Philosophisches Magazin. Jenaer Litteraturzeitung, pp. 281-284.

Van Cleve, J., 1999. Problems from Kant. Oxford: Oxford University Press.

Result

Mark: 78% (Lower Mid First)

Feedback:

In your essay, you engage very well with the question of whether Kant's distinction between analytic and synthetic judgments can be sustained, demonstrating an outstanding level of understanding of its key aspects.

One of your essay’s many strengths is your critical reasoning already regarding the definition of the key terms: You argue that the containment criterion is too restrictive, and that we must shift the emphasis to the contradiction criterion instead. Accordingly, you refine your definition of the terms in § 5. Your critical discussion is also on a very high level: You demonstrate both skills in explaining the objections as they were formulated by Maass and Eberhard as well as Schulze, and critically engage with them by explaining with regard to Schulze why “This ostensibly compelling response sidesteps the crux of the matter.”

I do not entirely get your point in the penultimate paragraph that Kant’s distinction becomes “circular: he calls a judgement synthetic if verifying its content requires going beyond the subject-concept, yet establishing what that subject-concept legitimately contains often looks like it also depends on some broader empirical or intuitive check.” Couldn’t one resolve this by arguing that Kant employs a conception of the dispositional a priori (as it was called in the lecture) such that “establishing what that subject-concept legitimately contains” does not require experience in the same sense as the verification of a synthetic judgment? Moreover, Kant’s “proof that a concept truly applies to something real” involves, in the case of synthetic a priori judgments, intuition a priori (space and time), for instance the construction of a geometrical figure in space. In this sense, it does not rely on experience (at least in the official story, but you could of course argue that this is not convincing for certain reasons).

Advice on how to improve for future assignments:

I do not really have tips for improvement because your essay is already extraordinarily good.

One formal note, the Critique of Pure Reason is normally quoted in this manner: CPR A 94 / B 128.

Very well done!