Free Thoughts Blog

In this video from a 1994 Atlas Economic Research Foundation event, economist and columnist Walter E. Williams talks about the coercive power of government and it’s role in undermining social moral priorities. Williams says that this happens when government lumps trivial offenses (he uses an example of Virginia residents being fined for not recycling) with barbaric ones.

Walter E. Williams is the John M. Olin Distinguished Professor of Economics at George Mason University and an adjunct scholar at the Cato Institute. He is a well-known columnist and the author of South Africa’s War Against Capitalism (1989), The State Against Blacks (1982), Do the Right Thing: The People’s Economist Speaks (1995), and More Liberty Means Less Government (1999).

John Rawls bases much of A Theory of Justice on claims about how rationally self-interested agents might design a society if they knew that they would soon inhabit it, but if they did not know their eventual place within it. Such agents would know basic facts about human life, but not their specific place in the world. He termed this constraint the veil of ignorance.

Agents would first find a decisionmaking criterion by which to judge institutional systems. Next they would judge these systems in turn. After that, they would be placed into the winning system. Rawls argues that they would settle on a set of equal and relatively extensive noneconomic liberties very early on. He then tackles justice in property holdings, and here is where he tends to set libertarians’ hair on fire.

It seems to me there are four bases for judging societies’ distribution of material goods that might be advanced in the initial position. Remember, we’re not talking about specific institutions here, but only the methods we should use to judge them. We’re also not talking about noneconomic liberties, which again, Rawls holds are not to be infringed.

At that level of abstraction, I find that the method of judging we pick turns mostly on what we’re supposedly ignorant about.

1. First consider our old friend, utilitarianism. In the original position, we consider the bundles of goods that we attach to various social stations. It would be natural to ask about these stations’ frequencies. We could then play the odds and try to maximize our expected payoff, because that’s what a rationally self-interested actor would do.

Indeed, if we knew both the different shares of goods to be enjoyed and also their frequencies in various types of society, and if we are only ignorant about our eventual place in the distribution, then this strategy seems the only sensible approach. In this month’s Cato Unbound, David Friedman asks whether it is better “to have a world where everyone is at a utility level of a hundred [or] a world with one person at ninety-nine and everyone else at a thousand.” Clearly, the latter gives a larger expected payoff and should be compelling to anyone playing the odds.

If this strategy is not compelling, then you’re probably avoiding it for a reason not given in the original assumptions. If you’re worried, for example, that the folks with 1,000 would use their holdings to turn the one guy with 99 into a slave, then you are worried about basic liberties, not the distribution of material goods. This is a legitimate concern, but it’s also one we have already answered. It may help to consider a different set of distributions: In (a), all people in the world have 100; in (b), all people in the world have 101, save for one individual who has 99. The danger of slavery is minimized, and one system clearly offers a greater expected payoff than the other.

Only the staunchest egalitarian would pick (a); the rest of us would pick (b). I know I would. All of which is to say that utilitarian reasoning can sometimes appeal to almost anyone.

Rawls, however, doesn’t let us have this option. His version of the veil of ignorance does not permit knowledge about the relative frequencies of different sets of holdings. This makes utilitarianism an impossibility, though it’s never clear to me why this should be so.

2. Consider next that we might be ignorant about what makes people happy. If so, then we may want to discover this information. Some have claimed that the free market discovers it; the result looks like Herbert Spencer or Ludwig von Mises. Both were influenced by utilitarianism, but neither was strictly speaking a utilitarian. Neither thought we had the information to pull it off.

Mises in particular argued that economic activity is a process of discovering what our needs are and how best to satisfy them. The answers are always provisional and subjective; it is hubris to expect agents in the original position — agents who are not economic actors at all — to be good at distributing resources. Instead, they should agree to free enterprise and free exchange, then enter society and start learning. Even when we consider essential goods like healthcare and food, our interests still diverge. That a good is essential doesn’t mean that there is one best way of supplying it; even the existence of a one best way does not mean that we know what it is.

3. Next consider that we don’t know the relative frequencies of the different positions in society. Under (3), we may or may not know what makes people happy. Weirdly, it doesn’t seem to matter. Given (3), we know only that some position (possibly with a whole lot of people in it) is the least well-off. If we don’t know its frequency, then suddenly the chance that we might end up within it will command more of our attention.

This purportedly yields the maximin strategy advocated by Rawls, in which differences in material holdings are tolerated only insofar as they increase the absolute welfare of the least well-off. If we don’t know the odds, we should play it safe.

But I don’t think this inference holds up. I say this because agents in the initial position must also consider the number of different economic stations that they would ordain. (3) says that the relative frequencies are totally unknown for all of them. But if it holds, then the smart thing to do would be to ordain a larger number of stations, each of which is still of an unknown frequency. Nothing forbids us from doing so, and if there are one billion different stations in our society, and if only one of them is the least well-off, then it’s not clear why we are to be especially concerned with it.

Any attempt to deny this line of reasoning rests ultimately on a determination that some of these ordained social stations are ad hoc, crafted only for the purpose of artificially altering the odds. But that implies that someone knows something about the initial odds, in order to be able to dismiss my attempt. Oddsmaking seeps in despite our best efforts to keep it out, and (3) collapses into either (1) or (2).

4. Imagine that your worst enemy is to choose your place for you. In an original position governed by (4), we may be very knowledgeable about nearly everything. But none of it matters, because the guy making the choices just happens to hate us.

Of all the choices, (4) most clearly yields Rawls’ justice as fairness: Self-interested people will care about nothing except the lot of the least well-off, because that lot will surely be their own. But it’s not at all clear that we should call this setup a position of ignorance. It seems if anything that the agents know a bit too much.

It’s also not clear why the real world should be governed by the fear of a purely speculative grudge. In real societies, we are usually at pains to prevent an arbitrary personal enmity from affecting anyone’s lot in life. And why not? Because that would be morally atrocious.

Rather than being chosen by one’s worst enemies, one’s economic holdings seem to be chosen — if that’s the right word — by a committee consisting of oneself, plus one’s parents, teachers, co-workers, neighbors, some random strangers, and a roll of the dice. Agents in the initial position should be aware of this fact, which has typically obtained in all societies to date, even very unfree ones. To my mind it seems a basic fact about how humans have always lived. Given this fact, we might still want to constrain that committee’s menu of possible choices. And that’s perfectly allowed. Doing so, however, might look a lot more like (1) or (2), and not at all like (4).

Today George H. Smith presents us with the second part of his look at social Darwinism. This week he explores the thinking of Herbert Spencer and William Graham Sumner, and shows how each explicitly repudiated the ideas so many today blame them for.

To associate market competition with biological competition is to misunderstand how Spencer and Sumner (and other classical liberals) viewed the market. Biological competition, in which one individual survives at the expense of other individuals, is a zero-sum game, whereas market competition is a positive-sum game in which all participants gain from voluntary cooperation. Therefore, it is precisely in a free society that social Darwinism does not apply. In a society with an advanced division of labor and where we must give others what they want in order to get what we want, the “fit” are those who can enlist the voluntary cooperation of others. When success depends upon persuasion rather than coercion, social fitness is measured by one’s ability to influence others by offering them something of value, i.e., by benefiting them.

Read it here.

In this 1997 lecture from a Center for Market Processes conference at George Mason University, Mario Rizzo talks about the nature of the common law system: a set of laws that aren’t codified but instead spontaneously arise thorough precedent. The common law, Rizzo says, is “a process of generating emergent properties;” of growing and evolving law in response to societal changes over time.

Rizzo is currently an associate professor of economics at New York University and the director of the Program on the Foundations of the Market Economy. He is co-author (with Gerald O’Driscoll) of The Economics of Time and Ignorance (1985).

The state’s an institution by which all of us, through the pooling of our resources, help both ourselves and our fellow citizens. The state keeps us safe, provides us with roads and schools, checks our food for pathogens, and so on. It stands to reason, then, that having received so much, we all should feel a debt of gratitude toward the state. A debt we must repay through obedience.

At least that’s what the argument from gratitude would have us believe. This theory distinguishes itself from–and is seen by many as a appealing alternative to–consent in that it depends not a bit on the perceptions or intent of the citizens it purports to obligate. With consent theory, I must in some way (explicitly or implicitly) indicate that I’ve chosen to become obligated and I must be aware that I’ve made this choice. But gratitude is something circumstances mean we ought to feel, regardless of whether we actually do. Parents make their kids write thank you notes for birthday gifts regardless of whether the child appreciates what his grandma has given him.

Gratitude theory takes this idea–those who have given us something, who have sacrificed for us, are owed something in return–and uses it to justify political obligation.[1] This gives gratitude at least one big advantage over theories like fairness. Fairness, in order to work, depends on us “accepting” benefits instead of merely “receiving” them. Gratitude doesn’t. No matter how we benefit from the state–and, in fact, regardless of whether we even want to benefit–gratitude theory applies.

The crude form of the argument from gratitude I sketched above doesn’t hold up to even passing scrutiny. The most obvious concern is with the form of repayment. Assuming I do owe a debt of gratitude to the state, why must I repay it with obedience? Why not cash or a day’s labor cleaning up the neighborhood? If you happen to pull me back onto the sidewalk just as I’m about to unknowingly walk in front of a bus, I should, out of a sense of gratitude, feel that I am in your debt. Yet if you were to respond with, “Okay, and to fulfill that debt, I demand you obey me,” I’d rightfully scoff. That’s not how debts of gratitude work.

A more sophisticated version, advanced by A. D. M. Walker, attempts to get around potential objections to “repayment by obeying” by arguing that the obligation gratitude creates is to not get in the state’s way. Walker summarizes his position like this:

1. The person who benefits from X has an obligation of gratitude not to act contrary to X’s interests.
2. Every citizen has received benefits from the state.
3. Every citizen has an obligation of gratitude not to act in ways that are contrary to the state’s interests.
4. Noncompliance with the law is contrary to the state’s interests.
5. Every citizen has an obligation to gratitude to comply with the law.

Limited to gratitude between individuals, this makes a certain intuitive sense. If you’ve done something really great for me–and especially if you sacrificed quite a lot to do it–then, in addition to being in your debt, I also probably shouldn’t take any actions that harm you. Doing so would show ingratitude.

Walker just extends this, saying that the state only really works if we obey it. If we don’t, then it can’t get anything done and it will soon cease to be. Thus any act of noncompliance with the state’s wishes would violate our moral obligation.

This formulation gets around the trouble of the oddness of obedience as a form of repayment. But it leaves gratitude as an awfully weak justification for political obligation; Walker rightly admits that the debts gratitude creates aren’t trumps. If I owe you, but principles of justice or of greater morality indicate that acting contrary to your interests is the more right thing to do (your interests include perpetuating an injustice, for example), then I must go against your wishes–though perhaps while feeling a little bad about it.

What this means is that the best the argument from gratitude gets us is a general sense that we ought to consider the states interests when acting. If we can act in a way that’s right and proper while not “harming” the state, we ought to do it. But this is rather far from outright obedience. States expect far more.

Further, because we should only feel gratitude towards someone who has in fact benefited us, the argument from gratitude collapses into simple consequentialism. Walker writes,

[T]he fact that citizens receive significant benefits from the state does not mean that they cannot suffer harm or injustice at its hands, or that, overall, they might not fare better as citizens of another state or outside the jurisdiction of any state. … [These concerns] are best handled as possible grounds for distinct lines of argument whose conclusions we must then weight against that of the argument from gratitude in order to settle whether, all things considered, in a particular case a citizen should comply with the law.

If it’s the case that the state isn’t a net benefit to you then gratitude won’t apply and you’ll lack a duty to obey the law. Which is precisely what consequentialist libertarians like David Friedman argue. To them, we’d all be better off without the state. If they’re right that the state’s existence harms us more than it helps us–the consequences of the state’s existence are a net loss–then we owe it no debt of gratitude and thus no obedience.

Which means, simplifying a bit, the argument from gratitude reduces to, “If the state’s good for me, I’ll support it. If it isn’t, I won’t.”

That won’t get supporters of strong political obligations very far.

In our newest video from a 1995 conference of the Separation of School and State Alliance, E. G. West, Jacob Hornberger, and Sheldon Richman talk about the history of state education and discuss Thomas Paine, Thomas Jefferson, and Adam Smith’s opinions on it.

Edwin G. West was an economist and historian who applied public choice theory to state education and researched the rise of the state education system in England. He was the author of Education and the State: A Study in Political Economy (1965).

Jacob Hornberger is the founder and president of the Future of Freedom Foundation. He has written books on everything from free trade to health care, gun control, and foreign policy. Pertinent to this lecture, he co-authored (along with Sheldon Richman) the book Separating School and State (1994).

Sheldon Richman is the editor of The Freeman (a magazine published by the Foundation for Economic Education), a senior fellow at the Future of Freedom Foundation, and a research fellow at the Independent Institute.