The Cephalization of Man


What is a Freeman?

“Liberalism is more left wing than communism. Especially in relation to economics.”


This post is a response to a response written by Reactionary Future.  Mostly this is just a response to the quote above.  Let’s start with a definition of capitalism, why because Reactionary Future doesn’t believe it is a real concept but alas we need to start with something.

Capitalism,” a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Wealth of Nations). Economic individualism’s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and profits; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international markets.”

Oh boy, that definition is a bit, as we say, problematic.  If Econlib says that capitalism is basically tied with liberalism then we have a long way to go.  Fortunately, I’ve spent quite a bit of time deprogramming the Whig History from the brain.  So let’s try and separate the “the thing that makes us rich” wheat from the “retarded economic individualist” chaff. One of the recurring themes of the reaction is the emphasis of judgement over systemization.  This is not the pure repudiation of systemization but the reification of judgement over any systems or systems which would seek to limit it.  Systems are tools to be used by capable people and not the other way around.  Part of the difficulty in the realization of sane economic policy of a reactionary nature is the muddling of economics with Whig ideology.  The twin beasts birthed by the enlightenment were a fetishization of freedom and equality.  To many peoples’ surprise Marx, unlike his knuckle dragging college bohemian acolytes, did study Adam Smith and other economists. There were still many lessons he missed from them.  The labour theory of value didn’t come out of a vacuum but was bandied at the time.  This is not to excuse or defend Marx but to point out that the twin beasts really did come from many of the same threads.  The logical conclusions of these beasts: absolute methodological individualism and egalitarianism were not misinterpretations but purifications inevitably brought about by these pre-existing heresies.

Yet we know that trade long pre-existed “enlightened” states.  In fact, trade has existed for most of recorded history and liberalism in all its forms has no monopoly on this form of human organization no matter what liberals might say.  To understand where much of the confusion comes from, let us go back to the fall of Rome.  Much ink has been spilled on the Manorial System and if you want more background I would suggest reading HBD*Chick.  By the time Manorialism had spread in much of Western Europe there was a huge disruption in trade.  From the south, Islamic Pirates raided the Meditaranian, as well as all out invasions, and from the North Vikings pillaged and plundered.  Almost all economic activity required physical fortifications to defend the populace from raiders.  Manorialism seems to have selected for well behaved, responsible, low-time-preference behavior.  Not everyone could get, or wanted to be a serf.  Many of these freemen or runaway serfs simply died.  This was another selection pressure.  Eventually, groups of these vagabonds banded together.  These armed bands, including armed ships, travelled around selling wares.  When enough of these merchant bands existed they began to form communities around church grounds.  Often they would rent or buy land from the church and utilize and fortify existing structures to defend themselves.  This is the origin of the return of large cities to the wasteland after the collapse of Pax Romana.

If every society selected for something then what did freedom (near anarchy) select for?  It selected for hardy men who could organize and defend themselves while using their wits to survive based on investments in time, goods and travel.  Before the age of Pax Rexes (the peace of kings) these men became a class of their own, eventually to be subsumed into the primitive states that emerged.  One will note that Vikings did not distinguish formally between piracy and trade and would often travel great distances to sell slaves to the Byzantine empire or even the Muslim Caliphates.  These men were “free” not in the sense that they were ideological liberals or anarchists but that, outside of church law, they had been accustomed to living in a state dissimilar to serfdom.  They ran their own affairs and the consequences of their failure were theirs.  Later serfs would either run away or who had not acquired a demesne would come work for them.  These former serfs displayed noticeable differences in status and behavior.  They had not gone through the same selection pressures as they were entering into re-civilized areas.  They were not as self-directed nor rich.  Many might run their own business such as tanning or being a blacksmith but often lived on the outskirts of town and did not often enjoy the same “rights” or responsibilities.  Rights being subject to the burger laws or responsibilities to defend the town when it was in danger (before Pax Rexes).

This is just one of many examples of the re-emergence of trade.  Plenty more examples happened within confines of peaceful empires.  Yet we must not ignore these people as mere outliers, but must accept that in the Western Europe and probably elsewhere there are men to distinguish from either natural aristocrats or serfs.  For example:

“A better explanation of the Puritans’ diligence is that by refusing to swear allegiance to the established Church of England, they were barred from activities and professions to which they otherwise might have been drawn—landownership, law, the military, civil service, universities— and so they focused on trade and commerce. A similar pattern of exclusion or ostracism explains why Jews and other racial and religious minorities in other countries and later centuries tended to concentrate on retail businesses and money lending.”

Oh wait…..that may have been a bad example.  Note to self, market-oriented religious minorities don’t act like other capitalists. In modern parlance these freemen represented the return of capitalists, their employees (not co-workers) and workers were usually as slavish as the serfs (because they were former serfs not selected for independence and self-reliance).   Merchants acquired early forms of wages slaves just as the barons had serfs.  This was not new.  Yet the new class of freemen was something different.  They could use judgement to rule themselves within the context of tradition and law (secular and religious).  This is not to say that democracy works or that kings are unnecessary but in a pre-state period there may be men who may rule within a sub-sphere of a diverse and fracture political landscape.  These men could live without managing to get themselves killed or going crazy.  Though to be fair quite a few towns needed to be put down in medieval history.  They don’t need to be told what to do nor fed, nor receive direction.  They were neither as Worthy as aristocrats nor as Slavish as serfs.  To put it bluntly, the Market as we know it is for free men.  Not all men are free.

Cephalization or the Genesis of Judgement



the concentration of sense organs, nervous control, etc., at the anterior end of the body, forming a head and brain, both during evolution and in the course of an embryo’s development.
In Coase’s seminal essay “The Nature of the Firm” Coase quotes a passage from Frank Knight’s own seminal work “Risk, Uncertainty and Profit”. This passage:
“When uncertainty is present and the task of deciding what to do and how to do it takes the ascendancy over that of execution the internal organisation of the productive groups is no longer a matter of indifference or a mechanical detail. Centralisation of this deciding and controlling function is imperative, a process of “cephalisation”
is inevitable.” [emphais mine]
This term is a throwaway metaphor both in Coase’s work and indeed in Knight’s work itself. However, it is a powerful metaphor for the process of the organization of the capabilities of man. To properly understand cephalization we must first explain what a creature looks like when it is NOT cephalized.
“While a starfish lacks a centralized brain, it has a complex nervous system with a nerve ring around the mouth and a radial nerve running along the ambulacral region of each arm parallel to the radial canal. The peripheral nerve system consists of two nerve nets: a sensory system in the epidermis and a motor system in the
lining of the coelomic cavity. Neurons passing through the dermis connect the two.[28] The ring nerves and radial nerves have sensory and motor components and coordinate the starfish’s balance and directional systems.[5] The sensory component receives input from the sensory organs while the motor nerves control the tube feet and musculature. The starfish does not have the capacity to plan its actions. If one arm detects an attractive odour, it becomes dominant and temporarily over-rides the other arms to initiate movement towards the prey. The mechanism for this is not fully understood.”

If that’s too technical here’s a nice simple diagram:


See it wasn’t that complicated. Ring and spokes.

So what are the qualities of a non-cephalized creature?

1. It operates radially (we’ll ignore asymmetric creatures). It does not have a set (singular) direction in which it operates.
2. It has no ability to plan it’s actions. No forethought.
3. It is a slave to sensory input and not in a directed way either.
4. There are multiple agents within the system.

Radial operation precludes the operation in a singular direction. For animals like sea stars they can move in any direction, but cannot direct themselves as such. They could move in any direction and their sensory organs are distributed to their extermities so it really makes no difference. Animals with bilateral symmetry tend to move in one direction: the direction that their sensory organs face (or are concentrated). To the degree an animal is cepahalized it has directionalality. Even jelly-fish, though possessing radial symmetry, move in the direction of their bell which possess limited sensory organs (where-as sea stars are concentrated in the arms)

If we were to ask why a sea-star moved in a direction, what drove it, we would say that IT smelled something yummy. However given its radial symmetry and essential multi-agent nature, it might more specific to say one of its arms smelled something yummy and directed the body to move (through the inhibitor mechanism). The telos of the sea-star extends radially. Its main end is to be sated (to eat), which requires locomotion towards food. However given the mouth is centrally located relative to any axis of motion all paths lead to the mouth, which is to say there is no “path” to the mouth. Given its nature, this requires no orientation or planning, simply near deterministic translation of sensory input to motion. For a bilaterally symmetrical creature the creature first orients itself then moves towards its end. That is to say given orientation bilaterally symmetric creatures physical locomotion tends to project linearly from their “head”.


When one’s body has bilateral symmetry there is a cost to motion there is a reason to move in one direction over the other. One must “decide” how to orient the body. For the sea-star, there is no decision it just follows whatever arm smells the yummiest thing. That arm will be pointing in the general direction of food: just follow your arm/nose.

Human’s have bilateral symetry and naturally must orient themselves towards what they are sensing to asses it.  Here is  a description of this process as a natural reaction to potential danger.

You continue on your path. Suddenly, you hear a series of loud noises behind you – noises reminiscent, for the sake of argument, of a large motorized vehicle hurtling over a small concrete barrier (a barrier much like a kerb). You are safe on the sidewalk – or so you presumed, a second ago. Your meeting-fantasies vanish. The fact that you are late no longer seems relevant. You stop hurrying along, instantly, arrested in your path by the emergence of this new phenomenon. Your auditory system localizes the sounds in three dimensions. You involuntarily orient your trunk, neck, head and eyes towards the place in space from which the sounds apparently emanate.31 Your pupils dilate, and your eyes widen.32 Your heart-rate speeds up, as your body prepares to take adaptive action – once the proper path of that action has been specified.33

You actively explore the unexpected occurrence, once you have oriented towards it, with all the sensory and cognitive resources you can muster. You are generating hypotheses about the potential cause of the noise even before you turn. Has a van jumped the kerb? The image flashes through your mind. Has something heavy fallen from a building? Has the wind overturned a billboard or street sign? Your eyes actively scan the relevant area. You see a truck loaded with bridge parts heading down the street, just past a pothole in the road. The mystery is solved. You have determined the specific motivational significance of what just seconds ago was the dangerous and threatening unknown, and it is zero. A loaded truck hit a bump. Big deal! Your heart slows down. Thoughts of the impending meeting re-enter the theatre of the your mind. Your original journey continues, as if nothing has happened. -Maps of Meaning

This ancient instinct the orientation of the trunk towards danger speaks to the very nature of the concentration of sensory organs. By making an animal optimized for locomotion and sensory reception in one direction you have given it reason to have a singular, organized and hierarchical thought process.  A sea-star need not orient itself nor could it really consider the cause of an issue.  Nor could it overcome or become accustomed to stimuli which it knew was safe.  We know humans are cephalized, it is immediately evident when observing any lives specimin, but what does it mean for man to be cephalized.?

The Visionaries

Back to humans. What did Frank Knight mean when he said:

“Centralisation of this deciding and controlling function is imperative, a process of “cephalisation” is inevitable.””

Let’s break down cephalization again: “the concentration of sense organs, nervous control, etc., at the anterior end of the body, forming a head and brain…”. For humans to cephalize there must be such thing human differences. Specifically, there must be differences which would advantage humans to serve different functions. This of course echoes the specialization of labor but what is unique about Frank’s insight is the conception of specialization of vision and judgement as valuable and unique to some men.

If we were to construct an anatomy of a corporation we could first start with profit. Profit is the primary signal by which most corporations judge their own performance. This signal is consumed by the owners (we’ll ignore complex corporations for the purposes of simplicity but this equally applies to shareholders as Frank notes). The average employee has no direct contact with profit, they may happen to know what the profits were but they do not benefit nor interact. There is only one mouth to a corporation. If may and indeed have thousands of arms which bring it materials, money, employees but it has a centrally located mouth to consume profits.

So far in our analogy of the corporate body, we have the image of Moloch the blind consumer demanding tribute. But what of vision? What are these sensory organs? What, how do they sense? Humans on average are fairly similar in the powers of the senses. The sensory organs adorning the corporate head are indeed biological they are men, none-the-less it is not their ability to sense physical phenomenon but to accurately perceive potential. Obviously, this potential is the potential for profit but more specifically it is the ability to perceive opportunity, calculate [non-intersubjectively categorizable] risk and derive occult value.  These qualities are important for navigating the uncertainty of the world. The environment is ever changing and a company cannot always be reactive. A visionary offers a company the opportunity to create value where there was none.

The final quality of cephalization is the formation of the brain (including a centralized nervous system). In the simplest sense, this is the formation of hierarchy. What is illuminating about Knight’s perspective is explication on the value of judgement which Knight explains below:

…So fundamental to our problem is this fact that human judgment of things has in an effective sense a “true value” which can be estimated more or less correctly by the man possessing it and by others—so fundamental is it for understanding the control of organized activity, that the problem of judging men’s powers of judgment overshadows the problem of judging the facts of the situation to be dealt with. And if this is true of knowledge it is
manifestly true of uncertainty. Under organized dealings with our environment, attention and interest shift from the errors in men’s opinions of things to the errors in their opinions of men. Organized control of nature in a real sense depends less on the possibility of knowing nature than it does on the possibility of knowing the accuracy of other men’s knowledge of nature, and their powers of using this knowledge.

The fundamental principle underlying organized activity is therefore the reduction of the uncertainty in individual judgments and decisions by grouping the decisions of a particular individual and estimating the proportion of successes and failures, or the average quality of his judgments as a group. It is an application of the broader principle of consolidation of risks, but the circumstances are peculiar. The result can never be calculated, either from a priori data or from tabulations of instances observed. It is an estimate in the purest sense, an estimate into which previous observation may enter little. We form our opinions of the value of men’s opinions and powers through an intuitive faculty of judging personality, with relatively little reference to observation of their actual performance in dealing with the kind of problems we are to set them at. Of course we use this sort of direct evidence as far as possible, but that is usually not very far. The final decision comes as near to intuition as we can well imagine; it constitutes an immediate perception of relations, as mysterious as reading another person’s thoughts or emotions from subtle changes in the lines of his face.”

The corporate body being made of men depends primarily on the judgement of the head. Specifically the head’s ability to judge the judgement of other men. As Richard N. Langlois and Metin M. Cosgel put it:

“We can summarize Knight’s theory of organization this way:
Because of the non-mechanical nature of economic life, novel possibilities are always emerging, and these cannot be easily categorized in an intersubjective way as repeatable instances. to deal with this “uncertainty,” one must rely on judgement. Such judgement will be one of the skills in which people specialize, yielding the usual Smithian economies. Moreover, some will special in the judgement of other people’s judgment. As the literature since Coase [1937] suggests, however, a theory of specialization is not by itself a theory of organization, since, in the absence of transaction costs, there is no reason why the division of labor could not be undertaken through markets rather than within a firm. Knight’s answer is that the function of judgment is ultimately non-contractible.” -FRANK KNIGHT ON RISK, UNCERTAINTY, AND THE FIRM:

The key insight, besides summary, that Langlois and Cosgel extract from Frank is that judgement is not contractible. That is to say, it can’t be sold, transferred, traded, serviced or borrowed. It is only by being the “head” having direct control and ownership (buy-in) that a visionary can impart their own methodology upon the body. Judgement isn’t plug in play but an integral part of the corporation. If one cannot be a judge of men then one cannot possibly hire one (thereby handing over conditional control) because you would have no aptitude to judge their ability.  If one is to offer advice one cannot force the receptor of advice to act.  It is only by having a stake in the process and the power to make changes that allow judgements to translate into action directly.

A corporations is made up of human’s.  As Knight points out the hierarchy is a hierarchy of judgement.  Within each employee’s limited scope they have judgment.  However, this judgement, being in a hierarchy, functions under the direction of the top.  To the degree that people have judgement, they are typically given responsibility.  There will be in any system be imperfect sorting but from the machines which act in a factory which have no judgement to the CEO/Owner there is a continuum of agency.  Just as not all sense organs are in the head even in cephalized animals, not all judgment happens at the top of the pyramid.  However as Knight notes, the metaphor of cephalization isn’t just about the concentration of judgement but about the indivisibility of responsibility.  Just as Moldbug noted that Sovereignty is conserved, in a corporation: “Yet a little examination in the light of the preceding discussion of indirect knowledge and indirect responsibility will show that the separation is illusory; when control is accurately defined and located, the functions of making decisions and assuming the responsibility for their correctness will be found to be one and indivisible.” -Risk, Uncertainty and Profit Frank Knight

Because of the cephalization of corporations they are capable of planning and directed action.  Being complex organizations they do not move as quickly or efficiently as animals, but the principal is the same.  To the degree that organizations are cephalized (the concentration of judgement at the top of the hierarchy) are the degree with which they have potential for forethought or planned action.  I call these sensory organs of the corporation visionaries because they are the people who can see the future.  Or to be more accurate counter-factual potential for growth.  Their success at seeing what is not there but what could be correlated with the corporations capacity to deal with the unknown of the future.  The capitalization on the chaotic and uncertain future and the ability to predict desires, needs and circumstances are the essences of the classical capitalist.

The Decephalization of Man

Just as organizations of men can be cephalized so can they loose their head as it were.  The twin beasts of the enlightenment represent their own forms of decephalization. Liberalism represents a regression in the cephalization of men to an extent that seems unimaginable: USG being the  home of vulgar liberalism.  While on paper the USG has the power to solve every one of its problems, they somehow only increase in number and severity.


By purporting that wisdom is in the crowd, that no man or sub-group of men can be trusted with unvetted power, democracy creates a diffusion of power and judgement.  Because of human psychology power tends to reside with a cadre of opinion setters: academics, writers and entertainment.  Without a centralized “head” the Cathedral operates much more like a sea-star.  Its parts are variant but operate under the same religious framework.  Each arm understands implicitly the basic rules and though they may differ in concert they move in the same pattern forms.  Given that there is no true sovereign, the Cathedral seems to be a purely reactive and indeed determinist institution.  There is no forethought, no judgement, or long term goals, merely the mechanistic unfolding of fallen instinct.  The Cathedral isn’t blind per say, it has the opposite problem: a million eyes everywhere.  A million eyes are great for an Orwellian state, but not so great for planning or focussing on solving a problem.  Is it really surprising that a decentralized conspiracy is logically inconsistent?  The Cathedral may run roughly on the same hardware but it does not think, cannot think.  When one arm gets the scent of something yummy the whole system must lurch blindly along.  The telos of the Cathedral is a blind tentacled beast slowly lurching toward the smell of chaos while slowly digesting every once of yummy order and turning it into another arm.

To finally return to the inspiration to this post, is communism really more really more right-wing than liberalism: “especially on economics”?  It is true that most forms of communism were more cephalized than their democratic counterparts.  They had a centralized bureaucracy which had absolute power.  However, having a head is no use when you gouge out your eyes and refuse to engage with the world.  For whatever control the Soviet union maintained it no more exercised judgement nor “saw” the world than their liberal counterparts.  That is exactly what made communism so deadly.  At the very least liberalism is a slow death march.  Communism, on the other hand, has the power and will to do evil and, like liberalism, none of the ability to stop.

Why Freemen? What does this mean for the Reactionary?

So how do we define the difference between economic liberalism and reactionary economics?  The difference is a matter of descriptive vs. prescriptive behaviour. Liberalism prescribes free-markets, free-trade and “unbridled capitalism”.  It fails to accomplish these goals, just as it fails to accomplish any goal.  What we can say is that liberalism is freer than communism.  Reactionary Future is not wrong that nationalizing an industry, like in communism, is within the rights and behaviour of a reactionary state.  The problem being that saying that Communism is MORE right than liberalism economically is implicitly creating a prescription for the sovereign.  It is well within the power and right of the sovereign to nationalize a company, the better question is it a good idea?


The purpose of the aristocracy and the sovereign is the concentration of sensory organs, nerves in the formation of a head.  With a head, a country can have directionality and, therefore, make judgments about the direction it heads.  With the capacity of judgement and vision, the sovereign can decide whether it is best to nationalize an industry. Nationalization is more akin to cutting off a gangrene hand than drinking water.  Both of these actions are within the rights of any person, however, one is more likely and positive and the other is necessary but something to avoid.

One of the exceptional qualities that make people sensory organs of man is the judgment of judges.  The ability to judge other people’s judgement.  This quality is essential to the building of any complex organization more so a nation.  Freemen, as I describe them, are not entitled to be free.  They have no natural rights.  Yet as a judge of judges the sovereign would be remiss to interfere with people who have demonstrated the same qualities (extenuating circumstances aside). That is to say, after peace, security, law, justice are accomplished whatever is leftover should be handed to the worthy.  To waste the rare qualities of exceptional individuals for vulgar ideologies is exactly the sort of eye gouging decephalization that is to be avoided.  Again there may emerge circumstances where according to the sovereign’s judgement a company needs to be nationalized that is expected, but probably rare.  Just as almost every large corporation is run by a number of people whose judgement is entrusted to one extent or another, a sovereign would be foolish to run the whole show himself.   It is the duty of the sovereign to exercise judgement and part of judgement is allowing the worthy the privilege to act independently.  Therefore, it is my contention that there while there are superficial qualities which a reactionary state shares with communism and liberalism it would descriptively be more likely to look economically like liberalism while sharing none of its insipid ideology.  The ability and right to nationalize does not mean it is within good judgement to make a habit of it.

The Cephalization of Man

7 thoughts on “The Cephalization of Man

  1. […] Lawrence Glarus‘ response to my assertion that Liberalism is more left wing than Communism is very much worth reading for those who have not seen it yet. The usage of the metaphor of cephalisation is frankly inspired, and it is something which I have had in mind even if in an unclear way.  I am not clear if it was meant to be a rebuttal, because I agree with absolutely everything in the post, and he didn’t really counter my assertion. […]


  2. I’ve always found it useful to use the word ‘free markets’ as opposed to capitalism. This is just to acknowledge the history of markets is largely one of very little regulation by the sovereign government, but ‘capitalism’ has a lot of connotations owing to its origin that it would seem sound to reject, i.e – the reduction of the state to a function of capital, which is in effect the Marxian analysis.

    Liked by 1 person

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