Introduction

The theme of this book is the rationality of liberty. It has for me a special significance.

I was born under the communist regime. During that time it was unquestionable that anything that is rational in the world of human action is organized²; a rational society was an organized society. This idea survived in today's mentality and many politicians would talk about ``building a free society''.

Two decades ago I was present at the lecture of one of the headmasters of the central party school. He spoke about the role of the unique party in the socialist society. There was nothing special about the content of that lecture. One can find its ideas in the now forgotten handbooks of ``scientific socialism''. The lecturer, a former manual worker, had difficulties in finding the right words, even when he repeated the dull slogans of the party. One could hardly detect any enthusiasm in what he was doing, with one exception. He began to talk about a world that is more and more complex. He made a pause and his eyes glittered with the conviction that this was an irreproachable argument: in an increasingly complex world the role of the party has to increase. This was for him an obvious truth: somebody has to organize the society.

A few years later I discussed with a distinguished sociologist. He despised the uneducated apparatchiks and their rule. He argued that a committee of enlightened experts should organize society rationally.

I have almost completed this book. I relax for an hour; I watch, on a Western TV Channel, a documentary movie about the first cities. Historians from Western universities present their views. In order to show the amazing complexity of a city, the movie starts with images from New York and a comment that what keeps the city functional is a high degree of organization.³ It continued with other comments emphasizing the role of organization. Old ideas are very resilient. They are intertwined with a vision of liberty as highly irrational. A recurrent theme in the movie was that without a unifying central authority complex human groups would simply disintegrate.

This book develops the theory that a rational society is not organized. The roots of rationality are elsewhere, in the rule of individual liberty. There is nothing original about this theory, but I try to examine as far as possible its presuppositions.

In its quest for deep presuppositions the book goes as far as to ignore not only the organization of society, but society itself. The term `society' refers to an object like `Pegasus'. The book proposes a refined methodological individualism: all the explanations of human actions have to be rephrased in the language individual actions and actions-as-connections among individuals who form complex networks of agents. Societies are bundles of networks, often kept together by strong force. Their shape is distorted according to schemes or plans backed by power.

Would it be possible that one day a universal plan would organize all human actions into a coherent society? The communist party claimed that it had discovered the science that would permit us to design such a plan. Is this logically possible? The answer in this book is no. The argument is quite simple: the idea behind this plan of action should be an algorithm. But there is a well-known result in the theory of algorithms according to which there is no universal algorithm. The plan cannot be coherent from a logical point of view.⁴

Going back to the topic of increased complexity, we may note that the book exploits the idea -- familiar to those who are interested in computer programming and in cognitive science -- that we cope with complexity using modularity and communities of objects. Neural networks have also shown that there is no need to have a central unit in a complex structure that is able to learn.

Liberty is linked in a surprising mode with rationality. The whole investigation that follows starts with a world of choices and continues with a search for rational rules that could govern the world of human action. This is not an empirical investigation of the transition to liberty. No conjectures are formulated. In a world of choices only what-if analyses make sense.

The basic idea is that the computational limits to central planning offer the foundation for an approach to liberty that bypasses the traps of direct individualism. Direct individualism starts with the individual selfownership. We use an indirect approach: start with the logical impossibility of planning and then restrict planning to its proper sphere: individual planning. This opens the way for the rule of private property. Further, we investigate the role of money in networks of agents. Liberty is connected, in this context, with the lack of arbitrary obstacles to entry and exit from networks or the creation and destruction of connections in a network of agents.

POST SCRIPTUM

The book started as a Hayekian enterprise: its main aim was to examine the role of knowledge in society.⁵ There is already a literature on the link between Hayek, networks and complexity.⁶ During the investigation, however, the focus changed: the significance of the logical impossibility of planning played an increasing role; tacit and practical knowledge also played a minor role, as well as the evolutionary process through which rules are discovered.

Probably, a much better title would be The Rationality of Liberty. However, the title remained unchanged. It reflects more the history of the book than its actual content, but it is also sufficiently broad to cover everything that is in the book. The specific result of this evolution is something that one might call a ``how to mises a hayek-church''⁷ There is also an effort in the book to tell a story that the mainstream economics researcher -- with her disgust for ideology and distrust of mysterious tacit, practical forms of knowledge -- might read with interest.

1: I use this word in Hayek's sense. He has dedicated his book, The Road to Serfdom, to the ``socialists from all parties''; to the people attracted by the idea that societies are organized or build by central authorities
2: The phrase in communist newspeak was ``organized framework''. Every action needed an organized framework.
3: The authors of the movie and their consultants, I am sure, have not heard about John H. Holland, the father of the genetic algorithm, and his book Hidden Order: How Adaptation Builds Complexity (Reading: Addison-Wesley, 1995). According to Holland, the way New York is supplied with bread is a demonstration of an emergence of intelligence in an agent-based system that is not organized by some center.
4: To my knowledge there are surprisingly few explorations of the implications of these results in the theory of human action. Pierre Lemieux, ``Chaos, Complexity, and Anarchy'', Liberty 7, no.3 (March 1994), pp.21--29, clearly sketches the idea of such a link between the theory of the complexity of algorithms and the theory of liberty. He invokes the results obtained by Gregory Chaitin, which are more powerful than the results of Gödel, Church and Turing, used in this book. Starting from these mathematical results he develops the theme of their implications for the theory of human action. He states that ``The planner's dream is inherently impossible''(ibidem, p.29). He has also a lot of interesting things to say about the role of mathematics in a new investigation of the foundations of Austrian Economics.

In the philosophy of mind there is a name that has to be mentioned in connection with Gödel's results. It is the name of the Oxford philosopher J.R. Lucas. Of special interest for the present investigation is his book on free will [80].
5: There is in Hayek also the idea of the network model of the market (see chapter 10 ff. here).
6: See [10]for an interpretation of Hayek's work as network-based approach to markets. [18] underline Hayek's influence on the neo-Austrian and modern Walrasians; they also focus on the link between knowledge and order in Hayek. For an analysis of Hayek's theory of the mind see [35]. Dempsey emphasizes the idea that knowledge creates coherence through cognitive connections. He also points out the role of self-referentiality. [131] discusses the relationship between Hayek and modern complexity theory; it also warns against rash applications of complexity theory to the real world. [138] investigates critically the new generation of market socialists.
7: The phrase imitates the title of a paper that belongs to the tradition of analytical philosophy: David Kaplan, ``How to Russell a Frege-Church'', The Journal of Philosophy, no.19(1975), pp.716--729. The allusion in our expression is to an infusion of Misesian thought into the Hayekian tradition, on the background of the theory of algorithms developed, among others, by authors like Alonzo Church.

Acknowledgments

The initial form of this book was based upon a course of lectures on liberty at the Department of Philosophy of the University of Bucharest. Together with Emanuel Socaciu, I started a course on liberty, entitled ``Freedom, Minds and Institutions'', in the first semester of the academic year 2001/2002. For this course, we have received a grant from the International Freedom Project, an International Higher Education Initiative of the John Templeton Foundation. The Atlas Economic Foundation administered the grant and I am very gratefull to Leonard Liggio and Nikolai Wenzel of the Atlas Foundation for their support and the incentive provided for an academic reflection on liberty.

In the second semester of the 2001/2002 academic year, at the Department of Philosophy, I have presented lectures on ``Liberty and Mentalities''. This course continues on a regular basis, as a compulsory course for the students who are choosing the moral and political philosophy package of courses.

Enrico Colombatto, from the University of Turin, Italy, kindly accepted our invitation to integrate his lecture on transition in Eastern Europe within the framework of the ``Freedom, Minds and Institutions'' course.

There were many opportunities for me, during the last decade, to research, discuss and correct my views on the topic of individual liberty. Many of the results are reflected in this book. It would be hard for me to mention them all, but I will try to make a list as comprehensive as possible.

A series of programs, at the Department of Philosophy, created genuine opportunities for research. The program on complexity theory, directed by professor Ilie Pârvu, integrated my research on ``Markets, Predictions, Intervention and Complexity'' and funded a stay at ICER (Turin, Italy), in November 2001. I am grateful to ICER for offering me wonderful research conditions. The program on government and institutions, directed by professors Adrian Miroiu and Valentin Muresan, created for me the framework within which I explored aspects of the formal approach to human action. Last but not least, the program on institutions and mentalities, directed by professor Adrian-Paul Iliescu, offered the possibility to investigate the old and the new institutionalism. It also created an exceptional material base (including the laptop on which this book has been written) for research at the Department of Philosophy.

A CEEPUS program in cognitive science offered extraordinary possibilities of contact with colleagues from Central European universities. Gabriel Vacariu's enthusiasm kept this program alive in our university. I am particularly grateful to all those who commented on my work in this program. During debates in Bucharest, Professor Grinberg, from Sophia (Bulgaria), suggested that I should pay more attention to simulations of social phenomena that use agents. I also paid a visit to Eötvös University in Budapest, in May 2002. After my conference on ``Models of Cognition and Social Interactions'', professors László Ropolyi and Howard Robinson made valuable comments. László E. Szabó challenged my excessive focus on neural networks. I am very grateful for their suggestions and the stimulating atmosphere at the Department of History and Philosophy of Science of Eötvös University.

Despite the lack of a direct connection to the book, many ideas in it would not have come to my mind without the discussions at the Liberty Fund seminars. They are the best academic debates at which I have ever participated. I am grateful to W.W.Hill for suggesting to Svetozar Pejovich to invite me for the first time at such a seminar. My own reflections on liberty were considerably modified by the encounter at these seminars with such diverse and challanging persons as James Buchanan, Anthony Flew, John Gray, Hillel Steiner, Richard Flathman, Svetozar Pejovich, John Moore, Norman Barry, Eric Mack, David Miller, Nicholas Capaldi, Enrico Colombatto, Viktor Vanberg and many others. Fred Fransen of Liberty Fund paid a visit to Bucharest and had a most encouraging impact on our local efforts to keep debates on liberty at a high academic level.

In Bucharest, the most stimulating discussions at which I have participated during the last decade were at the Romanian Mises Institute. During these debates, organized with such genuine enthusiasm by my former student Cristian Comãnescu, I had the opportunity to revise many of my insights on human action.

I have to come back also to the students of my courses on liberty. Their questions, comments and critical remarks were really valuable. My former student and now colleague, Emanuel Socaciu, with the young man's passion for liberty, was extremely supportive on many occasions.

My wife, Sarolta, as it happens during the final phase of the elaboration of a book, took upon her shoulders the care for the entire household and sacrificed her own researches in historical demography. I want to thank her for this.

My daughter, Ada, and my wife helped me to design two versions of the cover (a colored and a black and white cover). I am not sure how will the cover look like in print, after the editing process, but I appreciate very much their support.

Ironically, socialist¹ intellectuals from the West, who came massively to the East after 1989, were also an incentive for me to prove what seemed to need no proof.

I should add perhaps myself on some ironical list, because my love for free sharing pushed me three decades ago into the rooms of the National Library in Bucharest. My lack of love for money facilitated the involvement with philosophy. Without all these factors, I would probably do today some practical work with computers or other technical devices invented by the human mind, instead of trying to find my way in the labyrinth of the links between freedom, minds and institutions.

It is absolutely obvious that none of the individuals that I have mentioned bears any responsibility for my mistakes. I am the only one who has to take this responsibility, but I have to share the possible merits with many others.

Screen version of the book.

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