Free to choose

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Krus, D. J. & Kennedy, P.H. (1982) Some characteristics of Apollonian and Dionysian dimensions of economic theories. Psychological Reports, 50, 967-974.

Some characteristics of Apollonian and Dionysian
dimensions of economic theories

David J. Krus and Patricia H. Kennedy
Arizona State University

Abstract.- A scale based on analysis of Milton and Rose Friedman book Free to Choose was constructed and interpreted within the framework of the Apollonian-Dionysian, East-West dimensions of values and cognitive styles.

Affinity of economic theories and ideology is perhaps less visible in the present computer age than in the age of grand old theories; nevertheless the ideology-based assumptions are ubiquitous even in highly formalized theoretical formulations of economic systems. The direction of causation of this relationship is subject to ideological controversy. Marxists maintain that societal developments are determined by economic and technological progress. On the other side of this controversy, McClelland (1976, p. 6) commented that, “every attempt to trace a particular kind of consciousness to a particular type of social condition has ended in failure. The ideas of men shape external events more than these events shape their ideas.”

Throughout history, a relationship between predominant type of societal climate and prevalent mode of economic thinking can be observed. Examples of this relationship are the societal affirmation of the work ethic and concomitant preference for economic theory of Adam Smith; the acceptance of economic theories of Karl Marx by socialist societies, and concern with problems of poverty and preference for economic theory of John Maynard Keynes.

The key elements of these major economic-ideological structures appear to be the abstract concepts such as equality, freedom, affiliation, power, achievement. Structural analysis of these abstract concepts suggests that their latent structure is relatively simple. The majority of studies pertaining to structure of these concepts found either two or three dimensions (cf. Wiggins, 1968).

The present discussion pertains to experimental matching of a theoretical two-dimensional structure with an economic-ideological structure of the book by Milton and Rose Friedman (1980) Free to Choose. The theoretical reference structure was developed by Krus and Tellegen (1975), Krus and Kennedy (1978), and Krus and Blackman (1980a). The selection of the Friedmans’ (1980) book Free to Choose for inclusion to this structure was based on the assumption that its long-term listing among the top bestsellers was an indication of its resonance with the contemporary Zeitgeist. Also, the book was compliant with criteria for cognitive matching (Krus and Blackman, 1980, p. 948).

Method

The book Free to Choose was read by a group of graduate students enrolled in seminar on theory of tests and measurements. Sentences which in reader’s judgment expressed a quantified value judgment were written on an index card in a form of agree-disagree test questions. Statements recorded by two or more readers were assembled into an 111-item questionnaire, administered to 75 subjects and analyzed. The Kuder-Richardson Formula 20 estimate of internal consistency reliability of the test was .94 with average item difficulty .59 and average item discrimination .37. The items were keyed to reflect authors’ perceived agreement or disagreement with the presented issue. The distribution of test scores was slightly negatively skewed (-.31), reflecting the fact that on the average, more subjects agreed than disagreed with the presented opinions. The test discriminated among subjects very well. Out of the possible score of 111, expressing total agreement with the book’s expressed values, the maximum obtained score was 97. The minimum obtained score was 13. The mean score was 63 with a standard deviation of 18.64. Distribution of item difficulties was approximately normal and average item reliability, corrected to 1-0 interval, was .35. The results of item analysis indicated a high degree of internal consistency of expressed values. A subset of 30 best discriminating items was selected, as listed in Table 1.

Table 1. The Free to Choose Scale with Item Means and Item Discrimination Indices.

Item Number and Content	Mean	Disc.
1. The growing role that government has played in financing and administering schooling has led not only to enormous waste of taxpayers’ money but also to a far poorer educational system.	.61	.65
2. Declining test scores throughout the country, increasing problems of crime, violence, and disorder at urban schools, opposition on the overwhelming majority of both whites and blacks to compulsory busing - all this is a result of the trend toward centralization, bureaucratization and socialization of schooling.	.53	.57
3. Government is today the major source of economic instability.	.59	.58
4. The use of force is at t e very heart of the welfare state- a bad means tends to corrupt the good ends. That is also the reason why the welfare state threatens our freedom so seriously.	.55	.57
5. In recent decades the Democratic party of the United States has been the chief instrument for strengthening that government power which Jefferson and many of his contemporaries viewed as the greatest threat to democracy. And it has striven to increase government power in the name of a concept of ‘equality’ that is almost the opposite of the concept of equality Jefferson identified with liberty and Tocqueville with democracy.	.62	.57
6. In education, student performance has dropped as federal intervention has expanded.	.46	.55
7. Government takeover of the educational system reduced the quality and diversity of schooling.	.54	.55
8. Elimination of forced busing would free the black man from domination by his own political leaders, who currently see control over schooling as a source of political patronage and power.	.39	.55
9. The revolution in the role of government has been accomplished, and largely produced, by an achievement in public persuasion that must have few rivals. That public relations campaign has succeeded so well that we are in the process of turning over to the kind of people who bring us our postal service the far more critical task of producing and distributing energy.	.40	.55
10. State control of education is still another example of the common element in authoritarian and socialist philosophies.	.54	.50
11. The economic controls that have proliferated in recent decades have not only restricted our freedom to use our economic resources, they have also affected our freedom of speech, of press, and of religion.	.38	.50
12. The automobile industry is now rapidly being converted into governmentally regulated industry. WE can see the developments that hobbled railroads occurring before our very eyes to automobiles.	.54	.49
13. We have gone very far in the past fifty years in expanding the role of government in the economy. That intervention has been costly in economic terms. The limitations imposed on our economic freedom threaten to bring two centuries of economic progress to an end. Intervention has also been costly in political terms. It has greatly limited our human freedom.	.63	.50
14. The perceived self-interest of the educational bureaucracy is the key obstacle to the introduction of market competition in schooling.	.51	.46
15. Increasing sums and increasingly rigid controls have been imposed on us to promote racial integration, yet our society seems to be becoming more fragmented.	.67	.46
16. Public assistance programs weaken the family; reduce the incentive to work, save and innovate; reduce the accumulation of capital; and limit our freedom.	.60	.41
17. Ralph’s Nader’s attack on the Corvair, the most dramatic single episode in the campaign to discredit the products of private industry, exemplified not only the effectiveness of that campaign but also how misleading it has been.	.53	.39
18. Government finance is needed to promote educational opportunity.*	.46	.37
19. Nationalized industries proved so inefficient and generated such large losses that only a few die-hard Marxists today regard further nationalization as desirable.	.54	.37
20. By making grants to foreign governments in the name of economic aid we promote socialization.	.32	.39
21. A society that puts equality in the sense of equality of outcome ahead of freedom will end up with neither equality nor freedom.	.76	.39
22. The gains that strong unions win for their members are primarily at the expense of other workers.	.59	.33
23. We need a vigilant government to keep business from foisting off inferior products upon the consumer.*	.48	.21
24. The ‘new class’ government bureaucrats, academics whose research is supported by government funds or who are employed in government financed ‘think-tanks’, staff of the many so called ‘general interest’ or ‘public policy’ groups, journalists and others in the communications industry-are among the most ardent preachers of the doctrine of equality. To members of the new class, preaching equality and promoting or administering the resulting legislation has proved an effective means to achieve one of the highest incomes in the community.	.41	.20
25. The century from Waterloo to the first World War was one of the most peaceful in human history among Western Nations. People were free to travel all over Europe and much of the rest of the world without passports. They were free to buy and sell goods to and from anyone. (a) This is a striking example of the beneficial effects of free trade on the relations among the nations. (b) This is not a true picture of the nineteenth century - the era of the robber baron, of rugged unrestrained individualism, of heartless monopoly capitalism, exploiting the poor.	.29	.21
26. More government activity should be directed at altering the distribution of income generated by the market to produce a different and more equal distribution of income.*	.66	.21
27. Central economic planning is the wave of the future. (a) It will provide a world of plenty shared equally. (b) It would be a turn to tyranny and misery.	.53	.22
28. The elimination of unemployment, the vast production of war material that made the U.S. the ‘arsenal of democracy,’ and the unconditional victory over Germany and Japan demonstrates the capacity of government to run the economic system more effectively than ‘unplanned capitalism.’*	.33	.19
29. Socialism, intellectually bankrupt after more than a century of seeing one after another of its arguments for socializing the means of production demolished, now seeks to socialize the results of production. This new trend will (a) be also discredited. (b) result in more equality, benefiting a majority of people.	.71	.18
30. The market must be supplemented by other arrangements in order to protect the customer from himself and from avaricious sellers.*	.49	.13

*Scored in the ‘disagree’ direction.

In combination with other scales, this test subset was administered to an experimental group of 87 subjects. The mean age of this group was 32.88 yr., SD = 10.84. The representation of males and females in the sample was approximately equal. The other scales included in analysis were Gilgen and Cho’s (1979) East-West scales, the Zen and Goethe scales and Consciousness I and II scales.

The East-West Scales differentiate between styles of thought typical of Eastern and Western civilizations. The Eastern mode indicates preferences for integration, intuition, affiliation, and imagination, the Western mode indicates preference for analysis, differentiation, and rational and critical styles of thought. As different from Gilgen and Cho’s (1979, p. 839) scoring system, the East-West scales were constructed separately, to avoid bipolarity.

The Zen, Goethe, and Consciousness I and II scales were constructed as a result of analysis of other bestsellers: Pirsig’s (1975) Zen and the Art of Motorcycle Maintenance, Goethe’s (1779) Die Leiden des Jungen Werthers and Reich’s (1971) Greening of America, as described by Krus and Krus (1978), Krus and Blackman (1980a) and by Krus and Tellegen (1975). The preceding analyses of these scales indicated a stable two-dimensional structure. The dimension loading on Zen, Goethe, and East scales was labeled Dionysian. High correlations of this dimension were found with an external locus of control, high trust proneness, high absorption levels, focal-peripheral space awareness, affective-cognitive belief systems, susceptibility to hypnotic suggestions, high levels of written output of low complexity and suspended critical appraisal. The dimension loading on Consciousness I, Consciousness II, and West scales was termed Apollonian. This dimension correlated highly with internal locus of control, low trust proneness, peripheral-focal space awareness, cognitive-affective belief systems, low susceptibility to hypnotic suggestions, low levels of written output of high complexity, and immediate critical appraisal.

The matching of the value structures of the reference scales (East, West, Goethe, Zen, and the Consciousness scales) with the Free to Choose scale was by factor analysis. Since the nomological network provided by the East-West reference structure has a high relational fertility, it was expected that the proximity of the Friedmans’ scale to either pole of this reference structure would provide us with a multifaceted interpretive framework.

Results

Item analysis of the short form of Free to Choose scale showed it to be highly internally consistent; KR-20 = .80. The pattern of average discrimination, average difficulty, and average item reliability indices (.37, .59, .35) approximated values of these indices (.37, .59, .35) obtained from the item analysis of the long form of the questionnaire. Intercorrelations of scales included in the analysis are presented in Table 2. The Free to Choose scale showed substantial correlations with West, Consciousness I, Consciousness II scales and low or negative correlations with Goethe, Zen, and East Scales. Age of the subjects was also included in the analysis. As expected, older subjects tended to agree more with opinions expressed within the Free to Choose scale. Determinant of the correlation matrix was .058; it was used for computation of Bartlett’s sphericity test. The obtained chi-squared was 235, indicating that the patterning of coefficients of correlations was non-random.

Table 2. Intercorrelations of scales providing the nomological network for
the obtained factor analytic structure.

	2	3	4	5	6	7	8
1. Friedmans’	.309	.302	.669	-.157	.227	.229	.215
2. West		.582	.523	-.135	.174	.225	.207
3. Consciousness I			.594	-.287	.204	.117	.295
4. Consciousness II				-.289	.264	.173	.373
5. Goethe					.393	.385	-.331
6. Zen						.554	-.098
7. East							.086
8. Age

Principal components analysis of the correlation matrix returned two eigenvalues greater than one, accounting for 37% and 24% of the total variance. Using Roff’s method of squared multiple correlations as communality estimates and Kaiser’s rule as a criterion of the number of factors to be extracted, estimated communalities were inserted into the main diagonal and iterated until they converged. The convergence required 10 iterations. The extracted factors accounted for 63% and 37% of the common variance. The factor matrix was rotated to simple structure using Kaiser’s Varimax. The rotated factor matrix is presented in Table 3.

Table 3. Rotated factor analytic structure.

Scales	Factor I	Factor II
Free to Choose	.583	.160
West Scale	.607	.138
Consciousness I	.698	.037
Consciousness II	.905	.105
Goethe's Scale	-.424	.664
Zen Scale	.190	.750
East Scale	.177	.674
Age	.431	-.160

The obtained structure, as plotted in Fig 1, confirmed the stability of the Apollonian-Dionysian system of values and cognitive styles.

Fig. 1. Location of the Free to Choose scale within the
reference factor analytic structure.

The vertical factor was interpreted as reflecting Eastern modes of thought. The horizontal factor corresponded to Western values and cognitive styles.

Discussion

Considered within the interpretive framework of the Apollonian-Dionysian, West-East reference structure, the ideological character of Friedmans’ economic theory can be described as Western and Apollonian. Its emphasis is on self-reliance, high responsibility, past-future time orientation, immediate critical appraisal and a belief system which is based primarily on cognition and only secondary on affect. It should appeal to entrepreneurs with preference for reason to intuition in thought, rational and critical to imaginative and non-discursive modes of operations and legalistic-impersonal personnel policies. The intellectual climate partial to Friedmans’ economic theories would be intellectually objective, analytical, rational, hierarchically selective, stressing differentiation over integration, encouraging legalistic principles, and achievement over affiliation.

Provided assumptions suggested by McClelland (1976, p. 6) about the causative ideological-economic flow of events hold and change in the societal outlook is desirable, Friedmans’ economic theories would have to be implemented not only on the economic level, but primarily on the concomitant ideological level, favored by intellectual elites and media, setting the cognitive and motivational trends, the Zeitgeist and intellectual niveau of the society. Whether this change can be accomplished in the absence of major societal upheaval is questionable. The mechanism of change in the sense of Denton and Phillips (1968, p. 194) “action-reaction process in political philosophy, taken in the broad sense to include the general attitude of the elites toward the ‘correct’ society” is largely unknown. Krus and Blackman (1980b, p. 98) observed a 80 to 120 year cycle, associated with incidence of armed conflicts, suggesting this type of revaluation of preferred values across a broad societal spectrum. To forecast a probability of occurrence of turning points for this action-reaction process would necessitate sound theoretical analysis of structure and dynamics of this process and quantitative analysis of factors, determining the future of our society.

References

Denton, F. H., & Phillips, W. (1968) Some patterns in the history of violence. Journal of Conflict Resolution, 12, 182-195.

Friedman, M., & Friedman, R. (1980) Free to choose. New York: Harcourt.

Gilgen, A.R., & Cho, J. H. (1979) Questionnaire to measure Eastern and Western thought. Psychological Reports, 44, 835-841.

Goethe, J.F. (1774) The sorrows of young Werther. New York: Signet, 1962.

Krus, D.J., & Blackman, H.S. (1980a) East-West dimension of ideology measured by transtemporal cognitive matching. Psychological Reports, 47, 947-955.

Krus, D.J., & Blackman, H.S. (1980b) Time-scale factor as related to theories of societal change. Psychological Reports, 46, 95-102.

Krus, D. J., & Kennedy, P. H. (1978) Measuring value systems as related to societal change. Psychological Reports, 43, 3-9.

Krus, D.J., & Tellegen, A. (1975) Consciousness III: Fact or fiction? Psychological Reports, 36, 23-30.

McClelland, D. C. (1976) The achieving society. New York: Irvington.

Pirsig, R.M. (1975) Zen and the art of motorcycle maintenance. New York: Bantam.

Reich, C.A. (1971) The greening of America. New York: Bantam.

Wiggins, J.S. (1968) Personality structure. Annual Review of Psychology, 19, 293-350.