Econ101 says that individuals maximize utility subject to constraints. There are many problems with this - like, have you ever actually met a human being? - but there's one that is under-appreciated. It's simply that we often just don't know what the constraints actually are.

This is true of the most basic problems in personal finance. I don't know how long I'm going to live and so I don't know how much I can spend from month to month. If I shuffle off this mortal coil next week, I can live lavishly. If I'm going to see my 90s, however, not so much. I half-solve this problem by following a rule of thumb, to keep my spending within a particular limit on average. Yes, some economists advocate annuitizing (pdf) my wealth, but I fear this merely replaces a rule of thumb with a harder constraint.

Every man d'un certain age knows that constraints are not givens but instead need to be disovered - often the hard way. Every time you back gives you agony after gardening, or your shoulder after a session in the gym or your knee after a run, you've learned that the constraint upon your physical activity is more binding than you thought.

The fact that constraints are not known but rather must be discovered is especially important in entrepreneurship. Entrepreneurs do not maximize profits subject to constraints as Econ101 claims. Instead, as Hayek (pdf) and Kirzner (pdf) emphasized, their role is to discover what these constraints are.

This is true of the most quotidian of businesses: is the fact that a town has seven coffee shops a constraint on a ninth being profitable or not? It's also the case on a grander scale. ICI's chemicals business had been struggling for years, a fact which several potential buyers saw as evidence of constraints upon it ever making money. Jim Ratcliffe, however, did not see it as such. And he was right, with the result that Ineos expanded into the giant it is today. As Laura Huang writes, "constraints don't have to be constraining."

Except that they often are. More than 10% of companies close every year, and around half of new firms shut within three years. That's a lot of people learning that constraints upon profitability are more binding than they thought. A good argument for liberal bankruptcy laws is that, in giving a chance for failed entrepreneurs to try again, they can learn from their earlier errors. But of course, the learning works both ways. Jim Ratcliffe has not (yet?) replicated his Ineos success at Man United, which reminds us of what Boris Groysberg pointed out - that successful management is often not portable, because an ability to overcome constraints in one business doesn't guarantee an ability to do so in others.

All of which brings me to a curious division in politics today: centrists and some leftists seem to believe that constraints are tightly binding, whereas the right do not.

So, for example, Rachel Reeves treats her "iron-clad" fiscal rules as if they were a tight constraint rather than what they are: arbitrary self-imposed commitments intended to appeal to low-information voters and (to repeat myself) political reporters. Similarly, Labour feels so tightly constrained by the press that it makes self-evidently absurd decisions such as to raise employers' NICs (a tax on jobs) whilst at the same time complaining about "discouraging people from working." We Marxists have long thought that capitalism tightly constrains what a left-leaning government can do for the working class: the Starmer government seems to agree with us.

US Democrats have a similar attitude. Danielle Webber complains that they regard "the distribution of voter preferences as a fixed point rather than recognizing that those preferences can be informed by the actions and words of politicians and media elites." That is, they see public opinion as a constraint rather than as something it can change.

This perception of tight constraints isn't a new thing for centre-left governments. We saw it too in Clinton and Brown's fear that "bond market vigilantes" would prevent even modest fiscal easing. It was, however, under the first majority Labour government of 1929-31 that it manifested itself most pathetically. It collapsed when ministers refused to make big spending cuts in an effort to keep sterling on the gold standard. When its successor, the National government, abondoned the standard however there was no disaster: far from it; the economy grew nicely. And former Labour minister Sidney Webb bewailed: "nobody told us we could do that." He and his colleagues thought there was a constraint forcing them into austerity - but there wasn't.

It's not just the centre-left that sees constraints as tightly binding, however. So too, sometimes, do those further left. When they claim that Israel is breaking international law they are implicitly regarding this as a constraint upon Netanyahu. As a brute empirical matter, however, this seems to not be the case.

All of which contrasts sharply with Trump. He's learned that being a semi-literate convicted felon isn't a constraint upon being elected, and he is acting as if there are no other constraints upon him - perhaps not even Supreme Court rulings. As Timothy Garton Ash writes:

I still find it hard to believe how weak the checks and balances, both constitutional and habitual, of what was once the world's greatest democracy are so far proving to be.

Now, we don't know who's right here: you only know what is a constraint when you hit it. What is notable, though, is that this perception of a lack of constraints is alien to what used to be conventional mainstream conservatism. This - expressed by men such as Burke, Chesterton and Oakeshott - thought that reforms should be undertaken cautiously because we all have limited knowledge of complex, emergent systems. As Burke said, "men little think how immorally they act in rashly meddling with what they do not understand." For him, politicians should be constrained by respect for the wisdom of ages and for the existing social order. And the function of voters was not so much to exercise power via MPs doing what they were told, but rather to constrain that power, so that the MP "sacrifice[s] his repose, his pleasures, his satisfactions, to theirs; and above all, ever, and in all cases, to prefer their interest to his own."

Exactly what changed to make the right completely reverse its attitude is a story that needs telling, and not by me. The point is that we all need to think more about what are and (a different question) what should be the constraints upon political action.