Moral Dirigisme: The Knowledge Problem in Ethics

Why are coerced decisions incapable of being virtuous? Is it because “free will” is a necessary requirement? Can virtue be a characteristic of only acts freely chosen? The most common argument against the compelling of virtue rests on affirmative answers to the latter questions. Compulsion, practically speaking, negates free will, and without freedom, decisions have no moral significance (although they may still have political or legal significance). There is, however, another argument – one rarely recognized – that is, in our view, even more important. Freedom, in the sense of the absence of coercion, is a sine qua non of virtue because individuals must use their personal and local knowledge when making moral decisions. This knowledge helps satisfy empirical requirements in the application of general moral principles. These requirements appear in different ways in various moral systems but, in each system, knowledge of the “particular circumstances of time and place” [Hayek, 1948: 80] is critical to the choice of a specific action in fulfillment of a general rule, maxim, or principle. The argument here will be familiar to economists. It rests on an analogy with another kind of decisionmaking: “economic” or market decisionmaking. In market transactions individuals make use of personal or local knowledge in determining the prices and other terms on which they trade. It is through this process of bringing to bear, on his decisions, the agent’s knowledge of the particular circumstances of time and place, that individual knowledge is mobilized for a social purpose [Hayek, 1948]. The price system, it is argued, tends to embody a knowledge vastly superior to that of any individual to the extent that individual agents are free to act on the basis of their own knowledge. Central economic planning, on the other hand, explicitly replaces the knowledge of the individual with the allegedly superior knowledge of the social planner. In reality, however, this knowledge is not superior, but greatly inferior. So, paradoxically, a benevolent central planner is in a poorer position to attain his (or the “society’s”) ends than the myriad of local decisionmakers. Just as central planning of the economy founders on the Hayekian knowledge problem, so too the central direction of individuals’ moral choices founders on it own similar, although not identical, knowledge problem. This is our thesis. Unlike the traditional Hayekian thesis, however, the moral or ethical knowledge problem does not rest on the superior ability of the price system to communicate local knowledge. In fact, we are not here dealing with prices or markets. What will be shown is that, even outside of market decisionmaking, in certain cases, there will be a superior application of general norms when people are free to act on the basis of their own local knowledge.