April Freeman Banner 2014


Coping with Disappointment

Freedom and the price system are key.


In the real world, knowledge is imperfect, incomplete, and impermanent. Thus we can’t know for sure what’s going to happen down the road, either as the result of our action or our inaction. Things change in unpredictable ways all the time. If you like things as they are right now, that will change. If you don’t like the way things are, that also will change.

Nevertheless we habitually impute stability and substance to what we perceive, even though nothing is quite what we think it is. In a way, we have to. We still need to form expectations and plan for the future. And when the unforeseen inevitably happens, it surprises or disappoints us to some degree.

In a world in which knowledge is imperfect, incomplete, and impermanent, the main challenge is not so much how to relish success and pleasant surprises, which of course do happen, but mostly how to cope with disappointment. In the individual context that means, first of all not, clinging to our particular plans or expectations when they don’t work out. In the social context it means, when plans fail to mesh, somehow adjusting them all toward better social cooperation.

Persistence in the Face of Failure

Now, sometimes not accepting failure can lead to success. But it’s also true that a person who stubbornly and obsessively pursues a goal in the face of repeated failure tends to be unhappy or go crazy. And in the context of government policies dealing with larger social groups, such as the nation-state, that kind of persistence in the face of failure can be deadly. It’s the source of injustice and brutality, whether in war (even “necessary” ones) or in domestic interventions.

The inability or unwillingness of governments to adjust to changing conditions at the social level ultimately results in forcing people to do things against their will in the attempt to achieve the impossible, such as equalizing wealth over time while maintaining prosperity, or nation-building after a war. Even more limited interventions require the State to subordinate the individual to so-called collective interests.

For an individual the key to coping with ignorance and imperfection is to adjust in the right direction when expectations are disappointed. That requires wisdom–being a grown up.

The key to coping with ignorance and imperfection for larger social orders, when individual plans don’t dovetail, is to allow people to mutually adjust their plans in the right direction. It requires a well-functioning price system and the freedom to form and break social ties–the former provides the signals with which to spot opportunities, the latter the ability to pursue them. Collectivist central planning, an extreme denial of this, entails a rejection of the very means, free markets, that enable people both to tell when they have failed (losses) and to correct their errors (market entrepreneurship).

Doing the Best One Can

To cope with disappointment, to adjust in the right direction, either as a private person or as a policy maker, is to do the best you can and to embrace the inevitability of disappointment, to accept that nothing comes out exactly as planned, to appreciate the deep beauty in a world that doesn’t exactly conform to our expectations, no matter how superficially ugly or distasteful.

(That by the way is what “wabi-sabi,” the name of my column, means: to see the beauty in things that are imperfect, incomplete, and impermanent. Here’s an early column where I explain why I chose that name.)

For the individual it takes the realization that we have the power to change ourselves. For the policy maker it takes the strength to refrain from dominating others and to let them pursue their own ends, especially when they are contrary to those she prefers–to trust that free people will work things out, however imperfectly, incompletely, or impermanently.

F.A. Hayek once referred to the price system at the heart of a free market, which enables countless individuals to mutually adjust their plans and expectations toward better social cooperation without deliberately aiming to, as “a marvel.” A marvel it is–and though not perfect, still beautiful.



Sandy Ikeda is an associate professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism. He will be speaking at the FEE summer seminars "People Aren't Pawns" and "Are Markets Just?"

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April 2014

Around the world, people are struggling to throw off authoritarianism, with deeply mixed results. From Egypt to Venezuela, determined people build networks to overthrow their regimes, but as yet we have not learned to live without Leviathan. In this issue, Michael Malice and Gary Dudney discuss their glimpses inside totalitarian regimes, while Sarah Skwire and Michael Nolan look at how totalitarian regimes grind down the individual--and how individuals fight back. Plus, Jeffrey Tucker identifies a strain in libertarianism that, left unchecked, could reduce even our vibrant movement to something that is analogous to the grim aesthetic of architectural brutalism. The struggle for our lives and freedom is a struggle for beauty; it begins inside each of us.
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