Carissimi Diego et Rasheed,

Your stated difference between younger and older classical liberals in Spain I found very interesting: the older generation references the Salamancan school and the younger generation references crypto. Perhaps this difference is deeper though than merely young and old, and Tyler’s claim that there is a tradeoff between intellectual depth and forward lookingness struck a chord with me – as it always does. It also got me thinking about what does that tradeoff look like, its causes, and its ideal form.

Some of the political economy things I truly look forward to are deep classics in economics say the economic writing of Nicole Oresme 14th century and the political economy writings of Vitalik Buterin. How strange is this! I suppose culturally it is hard to get people interested in both, but it is striking to me how much Vitalik himself keeps reading, so that his practical experience gets strengthened by what he reads, perhaps in a way that wasn’t true for him five years ago. Unsurprisingly, people who are engaged in the actual work of political economy gain a lot more from reading than those who only read!

But who should be reading the Salamancans? Who should be reading Vitalik? (Everyone, in my opinion, or at least everyone interested in political economy) But if there has to be division of labor, I have a framework I’m interested in hearing you confirm or deny. Reformers are lawyers or are of the lawyerly temperament and thus approach questions from a historical and philosophical manner. In Spain and the European continent more generally, Classical liberalism is born out of law departments and works on the philosophy of justice. There is a strand of classical liberalism is born from commentaries on Book V of Aristotle’s Nicomachean Ethics. And both philosophy and law have the character in them of seeking out Authority and Tradition to lend weight to decisions; oftentimes continuity lends credibility. This is where the traditional strain within liberalism meets the liberal strain within the western tradition.

So perhaps it is the case that if you are interested in reform, law and philosophy are usually the tools to do it. The lawyer reads Suarez and Molina, because he is embedded within a system of traditions already and these lawyers are naturally capable of learning from the scholastics [1].

You might object, however, that the builders of the Enlightenment era, like John Adams, read a lot of the old stuff. I do think John Adams was a little bit exceptional in his reading habits. But there was certainly a continuum from the lawyers like John Adams to the inventors like Ben Franklin. But I find it notable (and endlessly annoying) the extent to which the builders of that era refused to acknowledge how their ideas were informed by the authors of the past. The Nullius Verba of the Royal Society, I suspect, led the Anglophone world to be philosophically thinner in a way that perhaps did not penetrate the continent until fairly recently. British Enlightenment thinkers seem to hate citing the sources for their ideas. Yet, of course, that is likely part of the Anglophone world’s strength. Only in English law does tradition have much purchase and even there… novelty can be found. Comfort with novelty means a much greater propensity to invent, demonstrate, and at least to try to overthrow the old way of doing things.

If you are young and fresh to the world of finance and not so embedded in older systems or social orders, then you get more excited about crypto and the whole experience of speed running the history of finance and monetary economics [2]. One needs the Rite of Spring, that zeal and boldness to build new enterprises. There is so much value in speed running the history of anything! Learning the why behind things requires testing what the real limits are. And so being early to something, anything, really, is such a valuable experience as you get to see some young enterprise mature into something older.

I thought it was notable in your discussion with Esperanza Aguirre that she referenced Adam Smith, Friedrich Hayek, and was clearly formed by intellectual ideas, yet she strongly suggested the importance of practical experience – in shadow government, in non-government jobs, and in specialization in hospitals and transit construction. The Hayekian point of specialization is clear, but the value of bigger and broader ideas and experiences is also clearly valuable simply by the way she talks.

When one inhabits a context of relative stability then the lawyerly approach to institution building does well, but when there’s the opportunity to try and upend an ecosystem, the lawyerly approach is not bold enough: you have to build with alacrity and find ways to go faster and through fewer permissions.

I think the best way to tradeoff between knowing the tradition and building better polities is to just actually be engaged in several projects with different time horizons. Just as some investments pay out quickly and others over a very long time, some intellectual and practical enterprises offer quick feedback, and others are bitter long before the sweet fruits are tasted. Few have the breadth and patience for this, but if you want to grow wise before you grow old, I do not think we have much choice.

Valete, Amici.

[1]. Though even if I’m in an environment of slow reform, I wouldn’t let my eye get to far away from seemingly distant changes in politics or technology. Take note of the Napoleons off fighting in Northern Italy, or the caravels off the coast of Brazil… they might be coming to your Moscow or your Macau.

[2]. “One thing that I like to say around here is that crypto rapidly recapitulates the history, and re-learns the lessons, of traditional finance. I don’t particularly mean this as a bad thing. Learning is good! Speedrunning all of financial history from scratch allows you to make different, interesting, sometimes better choices about what to do about those lessons. Also most of those lessons were learned a long time ago and are now sort of buried tacit knowledge; the traditional financial system does lots of things, and it does most of them for good reasons, but often most people have forgotten what those reasons are. Crypto provides frequent convenient entertaining reminders.”

Matt Levine, December 22nd, 2021, “Money Stuff: Wall Street Is No Fun Anymore”