Philosophy and Economics in Interplay – Interview with Emil Panzaru

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Emil Panzaru holds a PhD in Economics from King’s College London. With his extensive educational qualifications, including an MSC from the London School of Economics, Emil brings a wealth of insights to this interview. He is currently serving as a research manager at the Consumer Choice Center where he champions a variety of consumer well-being policies on topics ranging from energy policy to airport routes. The interview was conducted by Amjad Aun.

When was the first time you recognized the value of liberty?

Well, I think there are two distinct moments. One of them is when I had an intuitive sense that I valued liberty. The other moment is when I started thinking and putting my thoughts together into something more coherent. We might call it classical liberalism or a type of organized thinking about it. The first time I realized that I valued liberty was actually when I was quite young because there are historical events that imprint on your mind quite early. People often ask, „Do you remember 9/11 or other world-changing events?“ For me personally, it wasn’t a world-changing event, but it was an event that changed my own home country. I come from Romania, and I grew up there during the ’90s, and as everyone who is probably listening knows, the ’90s in Eastern Europe were no joke. There were all sorts of pretty nasty events happening as we transitioned from central planning to market economies and overall free societies. The event that marked me was the fact that a proto-authoritarian movement in Romania decided to take action by force. Romanian pro-democracy and liberal people tried to organize something similar to Euromaidan in response to the autocrats, where people came out in the squares and protested against the takeover. However, violent suppression occurred, and quite a lot of people died. The people tasked with this violent suppression were local miners and individuals waving socialist flags, trade unionists, and all their excuses were about equality and all these sorts of things. That’s when I realized, even as a kid, that these people are talking nonsense just to commit violence. I thought, „I don’t think I can march for that. I think I like what the other people are saying more.“ But I didn’t really have a clear idea of what I thought about it until I got to university, which was my second revelation, like Saul of Tarsus moment or whatever you want to call it. I started reading political philosophy, and we had a couple of lectures on John Rawls, but also on this guy called Robert Nozick. You were supposed to like John Rawls more than Robert Nozick because Robert Nozick is the kind of meanie who doesn’t care about redistribution, therefore allowing certain types of inequalities that Rawls would not. So Rawls is kind of tolerable, but Nozick is not. But hey, when I read Nozick, I thought, „Actually, this guy is more on point about what it means to be an individual, what it means to stand up to authoritarian regimes, what it means for those people not to own parts of you and then to claim that they own you,“ in ways that Rawls missed. Not that Rawls himself was a bad guy or not a liberal. He was, and he actually started off as a classical liberal, which is something that most people probably don’t know. But by allowing people to redistribute talents in the original position, you’re redistributing part of what they themselves are, in ways that Nozick saw but Rawls kind of didn’t. That matches my experience, my prior experience when I was a kid, when I saw people invoking those sorts of things to do all sorts of nasty stuff to each other.

And just to provide some insights to our readers, you’re referring to two very important books, I would say. The first one is A Theory of Justice by John Rawls, and the other one is Anarchy, State, and Utopia by Robert Nozick. Am I correct?

Yes, that’s correct. Those are kind of the two big books that people will tell you relaunched political philosophy as a discipline in the 70s, which is not entirely true because there was someone called Friedrich Hayek who wrote about these issues beforehand with the book The Constitution of Liberty. And there were people like Alasdair MacIntyre who wrote about what it’s like to live together in a communitarian way from a conservative position beforehand. But those two books really launched the entire discipline into the debate that they’re having now, which mostly revolves around different sorts of egalitarianism and responses to that.

And this leads us to the second question, which is related to books. Which three books have influenced you the most?

In a sense, Anarchy, State, and Utopia was just where I started thinking about libertarianism. It’s not where I ended up because I really don’t agree with the Lockean arguments for property that Nozick puts forward. It’s a kind of modified Lockean account, let’s put it that way. Someone who did influence me a lot would be Hayek, particularly aspects of his later works on spontaneous order. Works like Law, Legislation, and Liberty, but also his earlier works like The Constitution of Liberty. I think The Constitution of Liberty is probably his best work in terms of political theory because there he sets out the arguments with an interesting twist. He mentions a Republican ideal of non-domination but argues for markets being the facilitator of non-domination, especially through the rule of law. General rules that apply generally prevent abuses, which aligns with what I mentioned earlier about the abuses in the ’90s. That was the second aspect that was missing for me. We can talk about individual rights themselves, but the background for that you get with Hayek. And of course, he wrote other brilliant works like The Use of Knowledge in Society, Competition as a Discovery Procedure. Not just because he’s a libertarian and says things that I like, but he has a profound insight into the complex nature of our world. He tries to explain the implications of taking society as a complex order, not just relying on a few intuitions about the world, especially moral intuitions. You reason based on the world being a complex place, and he explored that. I don’t think we’ve fully understood everything that implies. It’s an ongoing project and probably the most important project we need to grasp because many people are reacting to the complexity of well-being in ways that are increasingly liberal. They want to shut it down. They argue that trade is too complex, too brittle, and should be made more resilient or even redundant in some respects. These are practical issues we need to wrap our heads around. It’s not just libertarians; everyone should think about it more. What does it mean if the state itself has become a complex system, supposed to solve problems for some people, but now part of the ecosystem and a complex thing where nobody knows anymore what the left hand does versus the right hand in the government itself?

That’s very interesting. So, the next question is, which three intellectuals have influenced you the most? I would take Hayek as number one. Who would be the next?

I think that’s the obvious number one. The second one would be Elinor Ostrom. The notion of polycentricity is an attempt to grasp the complexities of modern ways of governing and being governed, including market and civil societies. I really like her empirical approach, which examines how these things work in practice and tests them out. Another aspect I appreciate about Ostrom is her reminder that it’s not just about markets versus the state. There is a significant realm in between, which is society and non-market ways of organizing. This complicates the libertarian perspective and prompts us to consider how civil organizations interact with each other, the existence of illiberal groups within liberal societies, and the broader implications for societal dynamics, such as the culture wars. Ostrom’s work delves into the rules that maintain a healthy and functioning society. As for the last thinker on my list, it’s actually not even a libertarian, believe it or not. It’s someone called Bernard Williams, a highly influential philosopher. I appreciate how Bernard Williams discusses the relationship between politics and morality, which is often taken for granted. Many public discussions suffer because people derive their moral sense solely from their political position and vice versa, collapsing everything into a narrow framework. Bernard Williams argues that the interaction between politics and morality is more complex and can have detrimental effects on both. His works explore the unique aspects of politics, such as conflict, conflict of interest, and the basic problem of cooperation, emphasizing that politics is not simply applying moral principles. Williams cautions against excessive moralizing in politics, as it can lead to never-ending conflicts and overlook the fundamental goals of peaceful coexistence. His critiques of utilitarianism and moral philosophy offer valuable insights and serve as a counterpoint to prevailing problems. I encourage readers to explore his writings, as they provide a more reasonable perspective on politics, urging us to move away from destructive notions.

So, moving on to philosophy, we’re approaching the next question. I’ll begin by stating that philosophy, in my opinion, has a role in enhancing individuals‘ reasoning capabilities. Although I’m not a philosopher myself, I believe it holds importance for researchers in various fields. As an economist and philosopher, how significant do you think philosophy is for researchers? And based on your own experience, what role do you see philosophy playing in the rapid and unprecedented development of AI nowadays?

Oh, I thought you would ask me that. I’m going to answer both those questions at the same time. I’m going to do the philosopher thing and step a little bit back and ask you, why should we even pay attention to philosophy in this? Right. If AI is important or discussions of consciousness are important, because those are the kind of discussions that are going on in AI. Why don’t we just do a CAT scan and have neuroscientists figure out what consciousness is by looking at brain activity. Why don’t we just rely on systems theory from computer science to tell us what consciousness is?

So my answer as a philosopher is that’s a very naive view of engaging with research because before even conducting research, you have to consider the intentions and concepts you have in mind. Without reflecting on those, you may focus on certain aspects while completely ignoring other important questions. For example, if you approach consciousness in the way Descartes did, as a separate, inanimate entity called the mind inhabiting a physical body, it will influence your understanding of consciousness and how you theorize about it. This perspective has persisted for centuries, with people contemplating the existence of a soul separate from the body. Such limited perspectives result from a lack of reflection on the concept itself.

Reflecting on the concepts you work with is particularly crucial in the context of AI and consciousness. Many individuals do not adequately contemplate consciousness when delving into AI-related research. They may assume that because ChatGPT simulates aspects resembling consciousness, it must be consciousness. However, without a solid philosophical foundation, there is no coherent understanding of the starting point or the ultimate goal. In my view, consciousness should be regarded as a process that is partially tied to biology—a naturalistic perspective. To replicate consciousness, one must replicate that biological process, although we do not fully comprehend its nature. I do not believe that consciousness is merely a product of simulating computations or a simple input-output mechanism. This is why I do not consider ChatGPT to be conscious at present.

Allow me to share a thought experiment that David Chalmers, a renowned philosopher, introduced: the zombie experiment. Imagine there is an exact replica of Amjad named Amjad two. Amjad two outwardly behaves and reacts in the same manner as Amjad, mimicking his actions and conversations. However, Amjad two lacks internal thoughts and merely replicates everything Amjad one says. Can we consider Amjad two conscious? Most likely not. This demonstrates that consciousness is likely more than a mere function of behavior. It’s even simpler. Let’s imagine you’re in a dark room without any windows or lights. However, there’s a small slit, similar to the ones found at post offices, where people can pass documents without direct interaction. Now, someone slips you a note through that slit, but the entire note is written in Chinese. The only English text on it says, „Please copy these notes down.“ Despite not knowing Chinese, you obediently copy down the text and return it. Does that mean you understood the meaning of the text? No, not at all.

That’s how I perceive ChatGPT. It reproduces information without true understanding, like a stochastic parrot. While it’s possible that we may achieve consciousness in the future, I don’t believe we have it now. Furthermore, there are concerns that ChatGPT, being superintelligent, could pose dangers and act like a cheat code, attaining godlike powers. I also have reservations about such arguments, and we can discuss them later.

That’s a truly thought-provoking answer. Thank you for sharing it. To delve deeper into the topic, I’d like to bring up what Stephen Hawking once asserted when he proclaimed that philosophy is dead, suggesting that scientists, not philosophers, have taken up the mantle of advancing humanity’s pursuit of knowledge. I’m curious to hear your perspective on this statement.

It’s the unfortunate statement that led physics astray for a significant period, and this was even before Stephen Hawking. Einstein believed that discovering truth merely involved examining the facts. However, as I mentioned earlier, the things we seek go beyond just the facts themselves. They arise from our interpretation of what we should be seeking in the first place. Without reflecting on this aspect, we encounter difficulties. Physics faced a similar challenge when quantum physics was misinterpreted as relativism, which undermined the notion of seeking truth in the world due to a lack of reflection on the underlying positivism behind Einstein’s views. When people dismiss philosophy without much consideration, they often end up providing a philosophical answer, albeit an inadequate one. A classic example is the case of Sam Harris, who claimed that philosophy is no longer necessary because we have figured out the essence of morality: doing the most good for the most people while minimizing harm and suffering. He argued that harm is biologically measurable, pointing to the suffering of animals. However, his stance merely reinvents utilitarianism, an ethical theory that has been discussed for over two centuries and raises numerous questions about measuring harm and its comparability between individuals. Had he engaged with philosophy, he would have realized that the answer is far from obvious.

It is indeed intriguing that, as you mentioned, one must engage in philosophical thinking to support the assertion that we do not require philosophy. It presents a somewhat amusing paradox that we need philosophy to argue against its necessity.

Yes, and that gives rise to various challenges. There were several philosophers known as Positivists who held similar beliefs, simplifying the world into two types of true statements. Firstly, there are logical statements that are true through deduction, and secondly, there are empirical statements that are true through induction. These categories can be considered as the a priori, referring to truths that exist prior to experience, such as definitions. For instance, when we define the moon as the satellite of the Earth, it becomes almost tautological. The other category encompasses statements that are acquired through observation or experiential learning, and these are considered the only valid form of truth. However, what do you think this theory fails to consider? What aspect do you believe it overlooks upon closer examination?

That’s a hard question.

How about the very theory of science itself? True. That viewpoint fails to account for certain aspects that are neither derived strictly through experience nor a priori. Consider the very method they employ to verify things. It was not solely derived from observation, nor was it solely derived from theory. Furthermore, let’s consider moral thinking. It is not something that can be simply observed in the world, as many individuals may not always act morally. Attempting to create it a priori is also challenging, as it cannot be fully achieved axiomatically. Unfortunately for them, they have overlooked these factors and omitted them from their worldview. Additionally, they have neglected metaphysics, although their intention might have been to exclude it due to their anti-religious stance. But even if we set aside metaphysics, do you not care about moral thinking? Do you not care about being able to formulate your own theories? These are important considerations. Neglecting them has led to numerous abuses throughout history, as seen in the early 20th century. Therefore, simply looking at the facts alone is insufficient because it disregards the subjective lens through which we interpret those facts. More sophisticated positivists, like Quinn, would have agreed on this point. Embracing a more nuanced approach when conducting scientific inquiry is crucial. So instead of merely stating, „I look at the facts, and when I dislike these facts, I look at other facts,“ we should strive to understand the underlying reasons behind our choices and interpretations.

As I mentioned earlier, in addition to being a philosopher, you’re also an economist. And I have a significant question that I personally would like to ask you. How do you perceive the interaction between these two fields? Is it a linear relationship where philosophy directly influences your research in economics, or is there a reciprocal influence between the two?

It’s more of a reciprocity or a conversation. So, you know, I don’t think the term dialectic is one that libertarians really use. Don’t think about Marx, but dialectic is a term used in general to think about how things make sense when they’re put in conversation with each other. When you put philosophy and economics in a relationship with each other, you gain a lot more insights than you would otherwise. I’ve met many philosophers who are so bad at economics that they derive theories about how economic systems should work, ignoring all the challenging questions of economics. For example, they write theories about post-scarcity worlds in a world of scarcity, assume perfect knowledge in a world with no perfect knowledge, and assume full compliance in a world with incentive problems. Essentially, they eliminate all the problems that their theory supposedly solves in the first place.

When they operate by deriving concepts without considering empirical realities, it’s easy for them to say things like, „equality means treating everyone free and equal“ or „giving everyone due recognition.“ They criticize our social systems for not achieving this ideal, proposing their own theories on how things should be rearranged in society. However, the problem with this approach is that they don’t actually understand how markets work, and that’s where economics comes in. On the other hand, economics needs philosophy because sometimes it believes that everything can be derived from data alone. But if you think about the concepts behind things, you realize that not everything of value can be captured by data. For instance, Milton Friedman once wrote a paper suggesting that all economics needs to do is make good predictions, treating it like a heater and temperature reader. However, this overlooks the fact that a scientific discipline like evolutionary theory can be valuable despite having zero predictions.

My concern is that economists, especially with the increasing emphasis on quantitative methods, may lose sight of important facts that are not easily quantifiable or given in data. It requires philosophical reflection to consider the ways in which things are done. I worry about economists going down this path and believe they need philosophy to bring them back on track and recognize that there is danger in solely focusing on data-driven approaches. By neglecting non-measurable aspects, they miss out on crucial elements that people often protest against in economics, such as economic imperialism and the tendency to impose economic ideas on other disciplines like sociology and anthropology. Not everything can be measured in that way, and it’s essential to consider the broader context and how these measures fit into the world.

That’s a very insightful perspective, especially for someone like me who is pursuing a master’s in economics, and it’s also valuable for our audience consisting of students studying economics or philosophy. I find it quite helpful. Moving on to my next question, it’s more current. Nowadays, the world is experiencing high levels of inflation, along with intensifying trade wars and an increasing implementation of constraints on free markets. My question to you is, do you believe that implementing protectionist measures during difficult times is beneficial? And if not, what explains politicians‘ actions of continuously imposing more regulations during such challenging periods?

I can only sigh at the way things are unfolding. It’s evident to me that this is a destructive cycle. The issue lies in political incentives, which lead to decisions that deviate further from sound economic reasoning. Politicians have to be seen taking certain actions, and there is a short-term focus in politics. Unfortunately, we rarely hold politicians accountable retrospectively for their poor decisions because people tend to forget. This allows politicians to extract short-term benefits from protectionist measures that may benefit specific groups without people being fully aware of it. It’s important to consider these dynamics from a public choice perspective, but I say „up to a point“ because if we solely rely on public choice theory, there seems to be no way out. Public choice theory suggests that the structure of political decision-making leads to such outcomes, and changing this structure would require political actors who are themselves disincentivized to make those changes. It can feel like a dead end. However, I disagree with this perspective because I work daily with an organization that strives to bring about change. We face challenges, but we also experience successes. So, there is hope for change. It’s not just about resigning ourselves to the way politics operates, as suggested by Gordon Tullock’s viewpoint. Instead, we need to critically analyze political decision-making and find ways to work within the system to drive change. For those who are more radical, we should question whether our current understanding of politics is even valid and explore alternative frameworks.

From my philosophical standpoint, I believe people often expect the state to fulfill tasks it cannot accomplish. They then become frustrated and demand even more from it. However, the state cannot provide a singular worldview or make everyone agree on a particular societal view, whether it’s progressive or conservative. It can’t redistribute status within society or necessarily control economic crises because it is itself influenced by time and complexity. Going forward, I fear that politics will become increasingly acrimonious as people realize that their desired outcomes are not being met. Disappointment, particularly among those with strong beliefs, can lead to further problems. Unfortunately, I anticipate worsening conditions in the future as disillusioned individuals seek even more control, thinking that the issue lies in gaining more power and removing those who disagree with them.

Thank you for your answer. It appears to be a grim future, but fortunately, there are many people who are working actively to counteract it.

It’s growing in the medium term, but in the long term, I believe things are shaping up. I don’t want to leave readers too pessimistic. Political decision making can be grim at the moment, and conversations around politics can be extremely toxic. However, in terms of future prospects, things are actually looking up in the macro sense. There is still improvement and progress happening in the world. For instance, we are close to eradicating Guinea worm disease and making strides in tackling absolute poverty. Many issues that were once scourges of humanity are being addressed. So, if you ask me whether we are freer now compared to the past, I would say we are freer now because we consider the freedom of others and take it seriously. In the past, that wasn’t always the case. More people are experiencing freedom now, even though there are still restrictions that can make life unpleasant. However, I believe those restrictions will eventually pass. In a way, protectionist measures lay the groundwork for future freedom of trade by highlighting their negative effects and emphasizing our interdependence.

Free movement and free trade are concepts that necessitate greater individual liberties and fewer government interventions. However, what we observe in the real world is that when two countries attempt to implement these ideas, they end up with an extensive list of regulations. Is this disparity between theory and practice due to the real world behaving differently, or is it simply impossible to translate theory into practice? Alternatively, could it be that governments intentionally dilute the essential nature of these ideals through their conduct?

I guess that’s a good question because I’ve wondered about that myself sometimes. Well, I would say that I wouldn’t go for the argument of „Oh, they betrayed the ideal“ or whatever because that would contradict what I was talking about earlier. In practice, there are various coordination problems in a system dominated by states. We don’t live in a global system, but rather an international one, between states. So, if there’s a need for regulations within those states, I think we can accept that compromise as long as there’s relatively open trade between them. Unfortunately, that’s the realistic option on the table. Fortunately, organizations like the WTO or the IMF are supposed to watch over these regulatory measures and prevent them from getting out of control. Of course, I would prefer fewer regulatory barriers, but it’s a fight that needs to be taken step by step. If you ask me whether I’d prefer no trade at all or this type of trade, I would choose this type of trade. So, I’m not super excited about the compromise, but I’m willing to accept it. Also, when nationalization occurred in many countries, it led to increased regulation. Instead of direct control, those countries opted for private entities heavily regulated. That was the historical trade-off we had. Personally, I wouldn’t desire such regulation, but there’s a difficulty in eliminating certain prospects from the state as others arise. The relationship with the state isn’t one-way. We see this with digital coins now. States don’t just want to eliminate them; they realize they’re beneficial to state activity, so they want to get in on the game. This poses a problem for some libertarian thinkers who thought these mechanisms were against the state, but it turns out the relationship is reciprocal, and states also benefit from it. This has happened historically before, like with French liberals in the 19th century who aimed to eliminate state control over the economy and trade unions. However, by doing so, they also eliminated a counterweight to state power, which led to the rise of Napoleon III and an authoritarian regime, the opposite of their intentions. So, yes, it requires deeper thinking about these complex relationships I mentioned earlier. Of course, I’m not personally happy about it, but if we can compromise, I’d prefer this compromise over the alternative given how the political structure works. Unless you want to dismantle everything and start over, which is not feasible because it has its own consequences. That’s true. We can view it as a gradual enhancement, a small step towards what we’re trying to implement. But with improvement or compromise, we need to be aware that every step towards improvement may take us further away from the ideal, like a lateral step. To give an analogy, if you think about the ideal in utopian terms, reaching halfway there while flying across the ocean means you’ve landed in the sea, not close to the ideal. It’s not as bad as an airplane crash, but it’s somewhere in between, possibly further from the ideal. This means we may never fully realize the ideal. However, I’m okay with that because, as I mentioned before, it’s better for people to get along up to a certain level. If people strongly advocate for regulation, we need to change their minds about it first before attempting to change the regulations. Because every time we try to change regulations without convincing them, they’ll get angry and regain power to reverse the changes. That’s the problem Britain is currently facing. People never properly made the case for liberal societies, allowing radicals to advocate for a return to the past, to what Tony Benn said.

Is there something you would like to say to our European audience in general? Something you find important or necessary to mention.

I guess I would say, you don’t have to be pretentious or cringe to be a philosopher. You can philosophize in your own way, thinking about questions as a kind of conversation. Plato’s texts were not boring articles; they were plays. They played out 2500 years ago, and they’re still interesting today. He came up with ideas that became the basis for the „Ring“ from The Lord of the Rings, among many others that still resonate with us. People like to meme about Plato, saying that most of Western philosophy is just a footnote to Plato and Aristotle. That’s not entirely true, but we can still explore these questions and find value in them. When it comes to topics like AI and consciousness, we’ve pondered them before, and they didn’t destroy society back then. They won’t destroy it now. We should try to remain calm and gain perspective. By reading philosophy, even from the past, we can discover that it asks the same questions that we do today, connecting us across time and offering insights into consciousness and other matters beyond philosophy itself.

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