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May 27, 2005
So You Want to Live in a Free Society (1): What Hayek Saw
Anderson on Political Economy, Anderson on Taxes, Elizabeth Anderson: May 27, 2005
So far in my posts on taxation and political economy, I've mainly been making negative arguments--that this or that case against taxation to support social insurance doesn't work. It's time now to start building a positive case for social insurance and the taxation needed to support it. Most of you have heard arguments for social insurance based on ideas such as equality and compassion for the less fortunate. For many, such arguments cut little ice because they view the system being defended as incompatible with freedom. Ok, then, let's take freedom as our starting point and foundational value. Suppose you want to live in a free society--one in which everyone is free. What institutions, what types of distributive rules, what kinds of constraints on coercive action, what sort of property regime, should you support? Over this new series of posts, I'm going to lay out my view of what's needed to have a free society.
This first post in the series is dedicated to F. A. Hayek, who had a deep insight into what's needed. In Law, Legislation, and Liberty, vol. 2, Hayek argued that, for a society to secure the liberty of all, its distributive rules cannot aim at achieving some pre-established pattern of distribution based on individual need, desert, or merit. Instead, they should be purely procedural in form. Set up a system of fair, impersonal rules governing our interactions and applicable to all, let people choose freely from among the opportunities generated by acting within the constraints of the rules, and whatever distributions of goods result from following the rules will be just.
Hayek likened the procedural rules constitutive of a free society to the rules of a game:
namely a game partly of skill and partly of chance. . . . It proceeds, like all games, according to rules guiding the actions of individual participants whose aims, skills, and knowledge are different, with the consequence that the outcome will be unpredictable and that there will regularly be winners and losers. And while, as in a game, we are right in insisting that it be fair and that nobody cheat, it would be nonsensical to demand that the results for the different players be just. They will of necessity be determined partly by skill and partly by luck. Some of the circumstances which make the services of a person more or less valuable to his fellows, or which may make it desirable that he change the direction of his efforts, are not of human design or foreseeable by men. (Law, Legislation, and Liberty, vol. 2: The Mirage of Social Justice, p. 71)
In this passage, Hayek denies that the concept of justice can even apply to the outcomes of procedurally fair rules, for two reasons. One is that, because luck is inevitably involved in the outcomes of actions following fair procedures, the outcomes can't be relied upon to track individual merit or desert. The other is that the concept of justice can apply only to things that are deliberately willed, but the outcomes of free individual interactions within procedurally fair rules are unintended consequences of everyone's behavior. I think Hayek was mistaken on the latter point of usage. When we say that the winner of a contest won it "fair and square," we imply that justice would be served by awarding the prize to her, so it is just that she receive it. This is just a verbal quibble, however. The key point, on which Hayek was correct, is that the just outcome can't be determined ex ante, before people have played the game.
Why ought a society, to be free, distribute goods according to purely procedural rules? First, consider the leading alternative: what would a society be like if it tried to distribute goods according to some notion of individual merit or desert? Given that the outcomes of free exchanges inveitably include some element of chance, to adjust the outcomes so that they reflect some prior notion of merit or desert would require that the state look over everyone's shoulders to see how they are using their liberties. If, in the state's judgment, an individual used her liberties poorly or irresponsibly, then she is responsible for whatever disadvantages come her way and society will not compensate her for them. But if the state judges that her disadvantages were the result of mere luck, which is undeserved, then society will compensate her. There are of course other ways to draw the line between deserved and undeserved outcomes--indeed, too many ways, which put people into endless disputation over which way is the right way. (A look at recent literature on egalitarianism, full of disputation about how to draw the line between luck and desert, confirms this.) But all of the ways of drawing the line and redistributing goods accordingly require the state to make and enforce intrusive judgments about how people are using their freedom. People can't be free under such a system, where the state is monitoring their choices and passing moral judgment on them, with attendant material consequences. This is the ultimate busybody state.
Of course, not any random set of procedural rules will enhance freedom. Distributing all income according to a lottery, for instance, would be an instance of pure procedural justice. But that would be a crazy system to implement. What is needed is a set of rules that leave people free to offer mutually advantageous exchanges, so as to systematically give people incentives to behave in ways that overall enhance the liberty and opportunities of everyone else. Markets play an indispensable role in this, because prices signal to people where their productive efforts will be most valued by other people. In contrast with a command economy, individuals in a market system are free to take or leave any particular opportunity open to them, free to respond to or ignore any particular bargain or incentive offered to them. Moreover, market prices reflect the aggregate result of everyone's free decision to demand this or that, rather than some bureaucrat's notion of what they ought to be consuming. These are two extremely important ways in which a system of procedural justice based on voluntary market exchange secures everyone's freedom. However, the most important way in which reliance on markets enhances everyone's freedom concerns the dynamic effects of market competition in a private property regime in producing ever-expanding opportunities. I'll postpone to a later post an explanation of this, which I believe gives us the core freedom-based argument for private property.
A market system does not preclude all consideration of individual deserts. Importantly, when people violate the rules of a free society, we enter the realm of retributive justice. Here, we do know ex ante what the just results of a trial should be: namely, that all and only those guilty of violating the rules be punished (or, in a civil trial, compensate those they have harmed). The quality of a person's intentions--whether they did something intentionally, or unwittingly--matter here. But as long as people are abiding by the rules, the state takes no interest in their individual deserts. Consideration of individual deserts may also play a role in local distributions--say, within a firm. Employers often voluntarily implement merit-based pay structures, for example. But in a market system, that one's rewards reflected one's merits relative to the other employees in one's firm is no guarantee that one's rewards reflect one's merits globally--that is, relative to employees of other firms. For the size of the total compensation pie available to any given firm to divide among its employees is typically determined by chance factors--for example, an unanticipated shortage of some input, or sudden surge in demand for a product--independent of anyone's merit.
It might be thought that a system of pure procedural justice must place no constraints on possible outcomes for individuals, lest the constraints intefere with individual liberty. So pure procedural justice must permit catastrophe to befall the unlucky. Robert Nozick famously argued for this position in Anarchy, State, and Utopia (1977), encapsulated in his slogan that "liberty upsets patterns." This is the main reason (concern for individual deserts aside) that many egalitarians have objected to letting free markets determine distributions. But there is nothing in the idea of pure procedural justice, nor in the liberty it secures--to freely choose any of the opportunities generated by spontaneous interactions within the constraints of the rules--that precludes placing constraints on the outcomes.
To see this, we can pursue Hayek's analogy of markets with games by looking at the rules of some actual games. Games provide the paradigm of pure procedural justice, because there is no notion ex ante of who should be the winner, the same rules apply to all, and the rules are designed to be fair to all, in the sense of giving everyone a basically equal ex ante chance to win, supposing they play with equal skill. (Sometimes unavoidable asymmetries in a game give a slight advantage to a particular player--for instance, the one who gets the first move. But the rules of games are typically designed to prevent this advantage from being decisive, lest the game be boring for lack of uncertaintly about the outcome; and access to that advantage is itself typically allocated by a fair procedure, such as a coin toss or roll of the dice.)
The game of Monopoly illustrates a system of pure procedural justice that matches Nozick's ideal of unconstrained outcomes. In Monopoly, each player's objective is to drive all of the other players into bankruptcy, and to end up owning all of the property in play. Monopoly is a game that does not constrain how low people can go, or how high they can go, within its rules.
Milton Bradley's game of Life illustrates a system of pure procedural justice with constrained outcomes. In the game of Life, each player's objective is to retire with the most money. Although wealth inequality is inherent to the game of Life, it constrains the outcomes in three ways. First, nobody goes bankrupt; everyone retires with something. (I suppose it's technically possible to retire with a negative net worth, but I've never seen it happen. I suspect that that the rules are designed so as to virtually preclude this possibility.) Second, in the course of the game, players collect "Life tiles," which give them windfalls. When the draw pile of Life tiles runs out, a player who lands on a "Life space" gets to take a Life tile from any opponent. Strategically rational players will take their tiles from the richest opponent. Thus, the game of Life contains a redistributive element that in practice constrains how wealthy the richest player will get. Third, once people acquire assets (a house or a car), they can protect them by buying insurance. Insurance is a device that constrains middling outcomes by means of a ratchet--that is, it protects people who have already acquired some assets from losing them.
The game of Life illustrates how a system of pure procedural justice can consistently constrain outcomes at the bottom, at the top, and in the middle. It can even implement these constraints by way of redistributions from the top to those below. I don't pretend to have offered an argument that we should prefer a system that implements such constraints. I just want to point out that there is nothing in the idea of pure procedural justice, even one based on granting free markets a large role in determining distributions, that precludes setting constraints on possible outcomes.
Robert Nozick famously objected to John Rawls' egalitarian Theory of Justice that it was a "pattern-based" theory of justice that, because it identified just distributions independently of how people play by the rules, is incompatible with a free society. He was wrong. Rawls, the leading egalitarian theorist of the 20th century, in fact endorsed a system of pure procedural justice that insisted on constraining the top and bottom outcomes of a market-based "property-owning democracy." As he made clear in the revised edition of his book, the idea of a "property-owning democracy" is to use devices such as progressive taxation and rules promoting competition so as "to disperse the ownership of wealth and capital, and thus to prevent a small part of society from controlling the economy and indirectly political life itself" (Theory of Justice, rev. ed., xiv-xv; thanks to Amit Ron for drawing this passage to my attention). (By the way, Rawls on these pages contrasted his preferred system of "property-owning democracy" with a "welfare state," which aims to protect the unlucky from the worst misfortunes. The goal of a property- owning democracy is rather to secure the material conditions for democracy, in part against the threat of plutocracy. I'm not arguing for Rawls' position here; just highlighting the fact that egalitarians have more than one reason for constraining market outcomes. A concern for protecting the material conditions of democracy and equal citizenship is utterly distinct from compassion for the less fortunate.)
Hayek saw what Nozick failed to see: that Rawls' egalitarianism, while it contrained possible outcomes at the top and bottom, is in fact a system of pure procedural justice. It was not a "pattern-based" theory, and hence not subject to Nozick's objection that a free society will invariably upset patterns. Here's what Hayek said about Rawls' Theory of Justice:
the differences between us seemed more verbal than substantial. Though the first impression of readers may be different, Rawls' statement which I quote later . . . seems to me to show that we agree on what is to me the essential point [that distributive justice in a free society must take a purely procedural form]. Indeed . . . it appears to me that Rawls has been widely misunderstood on this central issue (L, L, L vol. 2, xiii).
Widely misunderstood, not least by Nozick. Hayek continued his observations on Rawls as follows:
there unquestionably also exists a genuine problem of justice in connection with the deliberate design of political institutions, the problem to which Professor John Rawls has recently devoted an important book. . . . I have no basic quarrel with an author who, before he proceeds to that problem, acknowledges that the task of selecting specific systems or distributions of desired things as just must be "abandoned as mistaken in principle, and it is, in any case, not capable of a definite answer. Rather, the principles of justice define the crucial constraints which institutions and joint activities must satisfy if persons engaging in them are to have no complaints against them. If these constraints are satisfied, the resulting distribution, whatever it is, may be accepted as just (or at least not unjust)." This is more or less what I have been trying to argue in this chapter. (L, L, L, p. 100, quoting Rawls, "Constitutional Liberty and the Concept of Justice," Nomos IV: Justice (New York, 1963), p. 102)
It's worth noting that Hayek's preferred system of pure procedural justice, while it differed from Rawls' in rejecting constraints on the top outcomes, did, unlike Nozick's system, insist on constraining the worst outcomes for individuals. He supported state action to abolish poverty in the sense of deprivation relative to objective needs (as opposed to relative to what others have) (L, L, L, vol. 2, p. 139).
I want to stress again that I'm not arguing for Rawls' system. It isn't, in fact, my preferred system. What I've argued for is the following:
1. Hayek was right to insist that the rules of distributive justice for a free society must take a purely procedural form.
2. Free market exchanges among private property owners play an indispensable and central role in any system of pure procedural justice that aims to secure and increase freedom for all.
3. A system of pure procedural justice in a system of private property and free exchange is consistent with rules that constrain outcomes at the top, at the bottom, and in the middle of distributions, and that implements those constrains by means of redistributive mechanisms.
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» LEFT2RIGHT: HAYEK ON THE INSTITUTIONS OF A FREE SOCIETY from Knowledge Problem
Lynne Kiesling I don't read Left2Right, largely because I don't like politics. But this >post from Elizabeth Anderson about Hayek's arguments for procedural rules for public support to those who cannot "play the game" is insightful and thought-provokin... [Read More]
Tracked on May 31, 2005 5:50:27 PM
Comments
Posted by: mtnmarty
Can you give more examples of what is procedural and what is distributive?
Compare, for example, these two.
Are either or both of these procedural?
"from each according to his ability, to each according to his needs"
"To the victor go the spoils"
Also 1 and 2 below seem possibly contradictory to me.
1.Hayek argued that, for a society to secure the liberty of all, its distributive rules cannot aim at achieving some pre-established pattern of distribution based on individual need, desert, or merit.
2. He(Hayek) supported state action to abolish poverty in the sense of deprivation relative to objective needs (as opposed to relative to what others have)
Posted by: mtnmarty | May 27, 2005 2:35:03 PM
Posted by: Perseus
I prefer Rawls's system since it would allow me to sit around all day and count blades of grass and still collect a check from the state to support myself. Aren't the ideas of leading egalitarian theorists just nifty?
Posted by: Perseus | May 27, 2005 3:01:45 PM
Posted by: Bret
Right, I can't argue (much) with that. I can, however, ponder where we're going next.
Assuming we agree with points (1), (2), and (3) (which I do) and decide to go with pure procedural justice, we still haven't narrowed things down all that much, have we? Perhaps Nozick was wrong about Rawls' system being non-procedural, but Nozick's libertarian system still is procedural and so it still could be a candidate, even under (1), (2), and (3). So, what do we want to play - Life or Monopoly? It's all subjective from here on out, is it not?
Posted by: Bret | May 27, 2005 4:31:19 PM
Posted by: Steve Horwitz
Hayek's support for the state providing a minimum was normally conditioned on it being for those who were somehow physically or mentally unable to earn for themselves on the market, i.e., those who could not even begin to play the "game." I don't have my LLL handy, but I believe the section that Liz has quoted is that general discussion.
In such a case, one could imagine a clear procedural rule about who was or was not eligible, along with a pre-determined minimum they would receive, and the result would be ensuring that those who couldn't play the game still were able to survive. This is neither a pre-determined pattern, nor about need, desert, and merit in the senses Liz is discussing. It simply says that those who are unable to play the game of catallaxy require considerations that the rest of us do not. Hayek's point was this sort of policy would not violate the rule of law and procedural justice, unlike, for example, an incomes policy that intended to establish a particular ex ante distribution of income ("the ratio of CEO pay to the minimum wage should never be above 7:1").
Two points to consider about Hayek's argument:
1. In the world of the early 21st century, there are probably a substantially fewer number of people who would be physically/mentally unable to play the game than there were 30 or 50 years ago. It's not just that our ability to either cure or improve physical and mental illness has grown, but that markets and technology have made it easier for people in those situations to contribute. The relative decline of the importance of physical labor along with the ways in which technology can help people overcome other physical limitations is the most obvious case. Someone in a wheelchair has both more job opportunities thanks to an information-based economy and more tools to do that work. This is not to say that Hayek's point is irrelevant, but it is to make the point that the scale of support necessary might not be as high (relative to the size of the economy) as years ago.
2. In my view, it remains a challenge for the state to provide what Hayek wants, and ONLY what Hayek wants. Recognizing the nature of slippery slope arguments, but believing them overpowered by public choice concerns, I would fear that once such a system was set up, the lure of expanding the realm of those deemed "unable to play" may be very hard to resist in a majoritarian democracy. If so, we're back to square one (for Hayek). It is always worth considering whether there are ways that the institutions of civil society might help us break this state/market logjam in a more effective way.
And let me, finally, commend Liz for finding that Hayek quote on Rawls. It's worth noting that Jim Buchanan concurs with Hayek in his view of Rawls' argument.
Posted by: Steve Horwitz | May 27, 2005 4:34:36 PM
Posted by: Glen Raphael
_Monopoly_ is not merely outcome-neutral. Rather, it is strongly biased in the opposite direction from the game of _Life_. Rather than having rules that discourage inequality, Monopoly has rules that encourage it. Elizabeth's post subtly suggests we should think of Monopoly as morally equivalent to a free-market economy, when it's much closer to a corrupt regulated political economy that helps only those few who are lucky enough to rise to the top first.
In Monopoly, building more houses in an area makes the local rent go up, but in real life, building more houses makes rents go down. In real life, people who can't afford to stay in a hotel on Park Place don't have to do so; they can get a nice place on Baltic Avenue and stay there. (If they do wish or need to visit Park Place they'll stay with a friend and sleep on the sofa or stay at a Hostel or in the car or perhaps they'll visit, do their business, and drive home afterwards without spending the night.)
Most of all, real life people who choose to live within their means - whatever that happens to be - are quite unlikely to go bankrupt. The features that make Monopoly a game that is dramatically winnable also make it a poor source of moral intuition with respect to how markets work.
Posted by: Glen Raphael | May 28, 2005 12:24:45 AM
Posted by: Bret
Steve Horowitz wrote: Hayek's support for the state providing a minimum was normally conditioned on it being for those who were somehow physically or mentally unable to earn for themselves on the market, i.e., those who could not even begin to play the "game." I don't have my LLL handy, but I believe the section that Liz has quoted is that general discussion.
In such a case, one could imagine a clear procedural rule about who was or was not eligible...
Unfortunately, I am unable to imagine "a clear procedural rule about who was or was no eligible" that makes any sense. Could someone enlighten me?
My stumbling block is illustrated by the following simple, though extreme example. It seems that anybody who would starve to death if not provided for would qualify as "physically or mentally unable to earn for themselves on the market". If there are no physical problems then we would have to assume that they are mentally unable. Yet how do we know they are really mentally unable? For sure, sometimes a mental illness can be clearly diagnosed. However, sometimes it can't be, and the only way to really know that they are mentally unable to earn is to wait and see if they actually starve to death. That, of course, is too late, so the State would have to intervene sometime before death.
But as soon as the State intervenes before death, then it becomes possible to play starvation "chicken" with the State. In other words, if I know that by not working, earning, and eating that the State will intervene before I die and support me, then that becomes a more acceptable option. In this case, it may be said that given the procedural rules of the system, I actually am unable to earn due to mental incapacity - though that mental incapacity is due to the particular procedural rule. This would be Perseus being enabled to "sit around all day and count blades of grass and still collect a check from the state to support" himself.
How often would this happen? According to Liberals almost never, and according to Conservatives it would happen all of the time. That's, of course, because Liberals are naturally hard working, diligent, and caring people and would never take advantage of the system, while Conservatives are naturally lazy, selfish, and callous, with the result being that persons of each category (Liberal and Conservative) project what they would do for a given set of procedural rules.
Personally, there is no doubt that there was a time in my life where I would have been all too happy to fool the State into supporting me. After I graduated from college (decades ago), my parents gave me a small cash graduation gift, which I used to buy a motorcycle and travel around for about 16 months. I was basically homeless during that period - no mailing address, no bank account, nobody knew where I was, I would sleep on the ground every night, etc. At the end of 16 months, there is no way you would be able to distinguish me in a lineup from any other homeless, presumably mentally incapacitated persons. Long hair, scraggly beard, one set of ratty clothes, no possessions (the motorcycle broke down). But I was free - really, really free - and loved it! I would have kept on doing it, but ran out of money. If the State would have supported me, I would have taken advantage of that.
Since that time, I've been quite responsible, starting companies, employing lots of people, and, between the companies and people, generating lots and lots of tax revenue for the State. So if the State had supported me, it would have been a large net negative for the State.
That's why I'm having difficulty understanding what the clear procedural rule would be to determine eligibility for State support.
Posted by: Bret | May 28, 2005 5:04:32 AM
Posted by: Carl
Bret, there's a bit in the British version of the sitcom "The Office" where one character is talking about the rules for receiving disabilties benefits. His suggestion is that when the supposed-handicap comes to pick up their check, put them in a room and say, "We''ll be back with your check in a minute," then leave them alone in a room for a minute, before turning on the fire alarm. Wait another five minutes and if they don't run out of the room, they get the money.
Posted by: Carl | May 28, 2005 8:03:42 AM
Posted by: le sequoit
I prefer Rawls's system since it would allow me to sit around all day and count blades of grass and still collect a check from the state to support myself. Aren't the ideas of leading egalitarian theorists just nifty?
We're egalitarian values the norm, perhaps you might grow to consider the qualitative value of blades of grass.
Posted by: le sequoit | May 28, 2005 8:04:00 AM
Posted by: Sans Serfs
A very clear and well argued post.
If the justification for redistribution is that chance and luck are too great a determinant of outcomes not to be redressed, then the question is how far to rebalance the outcomes so as not to overly disincentivize the portion of the outcome that is not determined by chance and luck, which portion is what largely drives human progress.
There is a also a siginificant difference between providing redistribution based on "objective needs" versus "relativist" redistribution based on outcomes.
Posted by: Sans Serfs | May 28, 2005 9:42:21 AM
Posted by: Tony
Good points.
I often call myself - slightly tongue in cheek - a "socialist libertarian" precisely because I believe it is possible to move towards a society that both respects individual freedom and provides some sort of safety net at the bottom. Your point #3 expresses this very well.
I'm not sure it's easy. A 70-year old, relatively conservative friend of mine often quips that "anyone can earn ten dollars by offering to work", his example being someone who walks by an auto shop and offers to sweep up for an afternoon. But we now have the worst of both - no safety net, combined with an intrusive system of liability and accountability that makes it nearly impossible for the shop owner to legally hire a sweeper for ten bucks without getting a social security number, filling out paperwork, assuming liability, worrying about demands for severance, et cetra. It's hardly worth it - and that's a sad situation all around.
I acknowledge that much of this problem is a side effect of "protecting workers" and so forth - demands for fair treatment of workers make it harder to take a worker on in the first place. And those protections are too important to let them go. I have a strong feeling that some sort of compromise is possible, but the details are difficult.
Posted by: Tony | May 28, 2005 10:38:11 AM
Posted by: pensans
There is no such thing as a rule with a "purely procedural form." Procedure is not a form; it is an species of law and justice. Lawyers are familiar with this fact. Any rule can be phrased procedurally or substantively.
For example, if a state wished to deter drunk driving (a substantive goal), the legislature might provide: (1) substantively, that any person injured by the drunk driving of another may bring suit for resulting damages, or (2) procedurally, that driving while intoxicated shall be irrebutably evidence of negligence. The first rule creates a rule of distribution; the second a rule of evidence. But the goal is substantive in both cases.
Alternatively, if the state wanted to prevent fraud in trials regarding contracts (a procedural goal), the state might provide (1) procedurally, that clear and compelling evidence of the existence of a contract was required or (2) substantively, provide that oral -- more easily invented -- contracts were void.
Thus, the suggestion that Rawls limited himelf to "pure procedural justice" because of the form of the rules that he proposed is hardly clear. The goal of the rule, in Rawls 'case "to prevent a small part of society from controlling the economy and indirectly political life itself," determines the character of the rule -- not its form. The goal of Rawls' rule seems rather more substantive, than procedural. It's concern is purely with the ultimate outcome, not with how it comes about.
Posted by: pensans | May 28, 2005 11:20:45 AM
Posted by: Bret
Carl, physical handicaps are easy, but you haven't addressed mentally incapacitated. Many people who simply cannot work, and would starve, would still get themselves out of a building if the fire alarm went off.
Posted by: Bret | May 28, 2005 11:24:33 AM
Posted by: pedro
Thank you, Elizabeth A., for yet another wonderful post. I personally do not worry so much about the hypothetical laziness of the leech of the State as I do about the reality of the existence of vast numbers of children who do not have a shot at getting out of poverty. It is, of course, a myth that poor people are poor because of lack of merit. Some people may fit that bill, but not all, and certainly not the many hard-working children who just happened to be born in the wrong social circumstance. I conjecture that, among poor and rich, the distribution of motivated and ambitious kids is the same. Let others worry about the possible (and plausible) bad secondary effects of having a State that provides disincentives for people to take complete responsibility for their own poverty. I worry about the very real bad secondary effects of a social contract which provides no safety nets to capable and incapable children. If people get a fair chance in life, and if the social contract has procedural rules in place which implicitly constrain outcomes in a reasonable way, then I'm happy with whatever outcomes take place.
I've heard the well-liked conservative story before: it is the story of the self-made man, the man who beat the odds, worked hard enough, and got to where he is without anyone's help. Of course it is best if people are encouraged to take responsibility for their own lives, and of course it is good for them to work hard to obtain what they desire. But the implication that it is merit which determines outcomes, and not starting points, merit, and luck, is naive, and the insinuation that 'if only poor people were as hard-working and determined as I was, they'd make it to where I am' is indeed self-serving, however inspiring the self-made man story may be. (How many more wonderful stories of success would there be if only young Guatemala, Indian, or African children were given a chance to get an education?) What would happen if we put a proud self-made fellow in a brothel as the son of a prostitute in Calcutta? Will he make it? Does he think that the rules of the game are fair and just if people who have it worse at the starting point have to have infinitely more desire and luck to get out of indigence than what a somewhat privileged kid needs in order to "get places"?
I advocate strongly for equality of starting points (or for striving to constrain inequality of starting points, rather). But that's something we have at the game of Monopoly, for example. And so, equality of starting points is not enough, unless free markets are shown to provide the safety nets that preclude outcomes to be the sort of human tragedy that could very well be averted with distributive rules like those provided by social insurance and progressive taxation.
Posted by: pedro | May 28, 2005 8:33:37 PM
Posted by: murky
"prices signal to people where their productive efforts will be most valued by other people."
Not when the price is a wage, and I believe there are indeed ex ante determinants of the wage differences between one sector and another. Just think of the wages of teachers, poets, social workers and presidents. People don't just work for money, they work for status, prestige, influence and other forms of gratification. In the industries that provide such gratification, market forces drive the wages down, because you don't need to tempt people to such jobs with money. Is that just? My intuition is no, and obviously lots of people agree...for whatever that's worth. I think we have at least two economies interlinked, which each cater to a two primal drive. The money economy is for food and shelter, but the prestige economy is at bottom for "T & A"--that is, reproduction. If you proceed blindly to square just one of these linked economies, I worry that via the consequences to the other economy people might still end up being shafted, so to speak.
Posted by: murky | May 29, 2005 9:32:51 AM
Posted by: le sequoit
Whether there might be a fair starting point is of little concern when the task becomes clearing the road of the carcasses of those who will inevitably be left in the lurch.
The Darwinists apparantly think they'll be able to travel those roads in thier armor plated Hummers, like Dark Ages warlords borne in the night by gargoyled carraiges from one fortress to another.
Extreme perhaps, but why am I so often reminded of "A Clockwork Orange"?
Posted by: le sequoit | May 29, 2005 10:21:25 AM
Posted by: murky
The fact that Pedro has reached outside of the rich industrialized nations for examples of children without hope, thus suggesting such stark cases might be harder to find in the United States is heart warming for a U.S. resident and citizen like myself...sort of. But it also reminds me that applying all the rules all over the world simultaneously isn't practical, which makes me wonder if Hayek isn't academic in exactly the same sense Marx is.
Posted by: murky | May 29, 2005 10:27:51 AM
Posted by: murky
le sequoit, I think you've missed EA's point about constraining the extremity of outcomes possible. To me this means there are nets to catch losers before they fall too far and a roof to keep the winners from flying away.
Posted by: murky | May 29, 2005 10:30:36 AM
Posted by: le sequoit
murky,
I didn't miss the point as much as I am guilty of ignoring it in my disagreement with some of the commentary--which is probably worse in its disrespect of the efforts of EA and other contributors.
As to the post, I am grappling with point two, particularly the broadness of any.
Posted by: le sequoit | May 29, 2005 12:16:31 PM
Posted by: razor
Regarding the mythical process/substantive distinction, the Senate has been considering whether it will cheat on procedural rules to generate a substantive outcome, and I have not heard one peep from the Dawkins crowd in protest, so I find the process/substantive distinction academic in the sense of an irrelevant consideration of ethical issues disconnected from life on this planet.
And to call 'darwinian' those who rationalize their privileged positions and/or self serving philosophies, is to insult both Darwin, who only described a process as best he could that has been at work for 3 or 4 billion years at least, and, the Creator who created the process some label darwinian.
As a matter of biological fact, humans are social altruistic animals, without which there would be no one and nothing to be fighitng over. Whoever argues there is some counter darwinian position in which humans are not social altruistic animals, is a cheat and a liar.
Posted by: razor | May 29, 2005 2:19:03 PM
Posted by: Larry
First off, I thought this was a very good post, in a very good series of posts. (It might be nice at some point to see it as part of a larger series entitled, "So You Want to Live in a Free, Equal, and Just Society", which expands upon each of those three critical adjectives – but for now, be content with what you’ve got.)
Good as it is, though, it seems to me to be mistaken. And the source of the mistake might be viewed as the overuse of a metaphor, or in this case two of them: "distribution" and "the game of life". EA asks, for example, "Why ought a society, to be free, distribute goods according to purely procedural rules?", as though there really were a thing, Society, with a pile of stored-up goods (no concept of how this entity came by such a cornucopia), which it then proceeds to dole out -- and the only question being whether the doling should be done simply according to some set of “procedures” without regard to end result, or whether some "pattern" of outcomes should be aimed at (with procedures necessary in any case). But of course that’s not what happens, except in some crude visions of socialist utopia. "Distribution", as a fundamental concept, just doesn’t make sense in a "free" society, consisting of autonomous individuals who produce goods and services in free associations with others, and who freely trade ( a redundancy, I know, but sometimes necessary) those goods and services with one another. The "procedural rules" here aren’t rules of distribution at all, but rather rules that permit this basic activity of association and trade to proceed without coercion or falsity. The fairness (not to mention justice) of the social arrangements of a free society, in other words, doesn’t derive from simply following procedural rules; rather, the rules – and yes, we do need rules – derive their fairness from the degree to which they enable free and open association and trade.
And this indicates the limitations of that other dangerous metaphor, the "game of life". It’s a nice little irony that EA uses, in fact, a game actually entitled "The Game of Life" to illustrate her claim that the constraining of outcomes is perfectly consistent with what she refers to as "the idea of pure procedural justice". This may be true, but only in the rather trivial sense that "pure procedural justice", in Rawls’ defines it, refers simply and only to the following of rules, as you do in a game. But in life itself the rules themselves need to be fair or just, without which human life is reduced to the literal level of a game. In life itself, then, the question becomes: how are we to judge the rules themselves? And the alternative answers mirror exactly the twin alternatives of "distributive" and "procedural" justice – in the former case, the justice or fairness of the rules is determined by the outcome, or pattern of outcomes those rules generate within the society; in the latter, it’s determined by the degree to which the rules realize or concretize the prior value of individual freedom. So in this sense I think Nozick is quite right to assert that any attempt to overlay outcome-constraint on freedom-based procedures is an inconsistency, and that attempting manage the outcome of the procedures to bring about patterns of outcome will inevitably involve perpetual (state) interference, either directly, at the direct level of the outcomes themselves, or indirectly, by constantly "adjusting" the rules.
None of this is to say, by the way, that certain patterns of, or constraints on, outcomes may not be desirable in their own right, and desirable enough to override the rules of a free society so as to bring that pattern or constraint about. It’s just to say that we should recognize, then, what we’re doing – sacrificing some degree of freedom in the name of that outcome. In that sense, a better measure of human progress might be the extent to which we can, over time, both enhance freedom and reduce those undesirable outcomes.
Posted by: Larry | May 29, 2005 8:36:21 PM
Posted by: D.A. Ridgely
I will be interested to read how Ms Anderson attempts to describe constraints implemented by redistributive mechanisms that remain in some understandable sense purely procedural. As others have noted, what facially appear to be purely procedural rules typically have very substantive effects. In civil litigation in the United States, for example, both plaintiff and defendant must bear their own litigation costs even if the defendant wins. In other legal systems, whoever loses must pay costs for both sides. Neither of these two approaches is clearly superior to the other; either one will encourage and discourage litigation in different ways. Arguably, therefore, there are significant value judgments behind a preference for one system versus the other.
If there is a fundamental rule in economics, it is that incentives matter. Limit outcomes, reducing both the risks and the rewards attendant to a choice, and you will have significantly changed the calculus by which people decide whether to make that choice. Allow the savings and loan industry, for example, to reduce its marginal reserves, insure its less securely collateralized loans, etc., and it will engage in transactions which are acceptably low risk to the lender even though the macroeconomic effect on the economy could (and did) turn out to be a disaster.
Then there is the problem of determining the trigger points when such redistributive mechanisms are to be applied. No easy feat unless such triggers are broadly defined and even then they would have to be readjusted periodically for various macroeconomic reasons and would always be subject to political pressures to be readjusted for self-interested reasons.
Finally, for now, I am curious why Ms Anderson believes there must be limits at the top except perhaps as a means of financing redistribution to the bottom. Among other problems, arbitrarily limiting maximum wealth, at least in the lifetime of the owner, can result in a net decrease in overall wealth. If multibillionaires tended to keep their wealth locked up in a vault in the basement to wallow in, Scrooge McDuck style, we might say, well, enough is enough, go wallow in five dollar bills instead of fifties. But people who attain such wealth do so because they are remarkably adept (or insanely lucky) at supplying market demand and, in the process, growing overall wealth through employment, investment, etc. than the average person (not to mention, average government) can do. If on average everyone else is $100 better off because we permit Bill Gates, Warren Buffet, etc. to amass as great a fortune as they are able, we should be concerned not to cap their earnings out of mere envy. I do not suggest that is Ms Anderson’s motive, but merely point out that it is a very human motive that comes into play rather quickly when we permit capping wealth.
Posted by: D.A. Ridgely | May 29, 2005 8:53:14 PM
Posted by: razor
That the best illustrative example of the unlimited wealth position is that all are better off if Bill Gates is wealthier, nicely exposes how the argument is fictional, rather than analytical.
Anyone who knows the history of microsoft, or who has had troubles with spyware and viruses, because, it was in microsoft's evil empire ambition to write crappy software with wide open doors for hackers, knows better. Bill Gates wealth reflects many things, and one thing it vividly illustrates in every year of microsofts existence is that rule cheating to gain advantage pays off. When Microsoft ran up against the federal government, I was shocked at how cheap congressmen could be had.
Posted by: razor | May 29, 2005 9:02:50 PM
Posted by: Ted, the husband
Mr. Ridgely --
It's not Mr. Gates' wealth that bothers me, it's his ability to convert that wealth into social and political power that bothers me. I don't envy him, but I do fear him - the healthy fear that one should have for the powerful.
Posted by: Ted, the husband | May 29, 2005 10:52:19 PM
Posted by: D.A. Ridgely
Being hypothetical, it was both fictional and analytic. I certainly don't hold Gates up as a paragon of virtue. But you run the numbers, razor, and make a case for the proposition that the economy would be stronger or even as strong without Microsoft. I await your empirical analysis. Meanwhile, while we're being all analytical, perhaps I might point out that neither the quality of Microsoft products (which I admit is generally poor), nor the company's sharp and probably preditary business practices are more than tenuously related to the point I was making.
Posted by: D.A. Ridgely | May 29, 2005 10:55:59 PM
Posted by: bakho
The sticking point in his argument is "fair". Fair is a dynamic quality. Thus, a set of rules imposed at time X cannot forsee what will be fair or unfair at time Y. The economic system is just too complex. For this reason, it is necessary to make adjustments from time to time in order to keep the system "fair". This also overlooks the political problems in implementing a "fair" set of rules. Politics means that the implementation will favor some over others, or there will be no agreement on the implementation. The definition of "fair" is subjective. For instance, a billionaire might argue that it is only fair to transfer all wealth upon death to individuals of his own choosing. A pauper might argue that such accumulated wealth should be redistributed among all people as the only "fair" rule. What is "fair" is "unfair".
Politics trumps ideology every time.
Posted by: bakho | May 29, 2005 11:02:09 PM
Posted by: D.A. Ridgely
Ted, I agree that we should always be concerned about the concentration of power in one or a few people. But the same concerns apply to varying degrees to long serving politicians, corporate executives and even, say, the pope. Wealth is only one avenue to power and there are relatively effective ways to check wealth produced power short of confiscating the wealth. The easiest, most effective method of precluding the power hungry from gaining too much influence on the state and thereby its citizens is to keep the state itself as powerless as possible in the first place.
Posted by: D.A. Ridgely | May 29, 2005 11:03:16 PM
Posted by: razor
If the point is missed, yes, the connection is tenuous. The famous example of the advantages of wealth assumes what the evidence suggests is exactly the wrong conclusion:
No one who believes in market mechanisms to create wealth should ever ever suggest that we would be worse off without a company that engage in predatory business practices, buys politicians, steals, litigates out of existence, or buys off its competition when it loses the court case. A believer in the market would assume others, eager to be wealthy, in the cartoon version of the market, would be putting out superior products. Microsoft is famous for competing when it is forced to, and destroying the competition, so it can get back to generating crap.
To the original point: there is an argument about government intervention in the market, and in the allocation of property. Here we have a famous recent example, Microsoft, and lo and behold, it in no way supports the argument. Instead, we learn from the microsoft experience, that politics and infleunce are bought and sold in good part by changing the rules (just ask microsoft competitors what happens when a change in the operating system can destroy hundred million dollar businesses that microsoft wants) and those with, get more, and those without, can be ruled with supposedly analytically true exposition of the choices. But, there are no such choices.
In sum, there is no such human world as that described in the analytical procedure/substance approach, yet, the false approach is used to justify gains got by cheating on rules and substances. Now, if commenters believe what they have to say is irrelevant to human decision making, well, say so upfront.
Posted by: razor | May 29, 2005 11:46:27 PM
Posted by: Topher
I found this whole discussion very interesting; it made me see Rawls in a whole new way.
What I want to comment on though is the tendency of many here to look at the issue of procdural redistribution purely in a mechanical, economic way. The problem with letting too much wealth accumulate with a few on the top is that wealth creates political power. And, as we have seen that leads to several negative outcomes:
1. The ability of wealthy individual/corporations to interfere with market mechanisms through monopoly and oligopoly.
2. The ability of those same groups to influence government to help them interfere with markets AND to use the government to circumvent or change rules that are supposed to be in place to make justice purely procedural.
3. The ability to essentially control the political process of a country.
The original article alludes to this several times, but many of the responses miss this point entirely. I will never understand how the fact that social safety nets might allow a few people to live without working bothers some people more than the fact that a huge wealth gap in a country essentially undermines democratic institutions creating an oligarchy.
Posted by: Topher | May 30, 2005 12:48:56 AM
Posted by: Larry
Topher: like you, clearly, I've found this discussion interesting, and here are a few replies to the concerns you raise:
There is a question about whether, in the absence of state interference, monopoly is possible for any length of time in a market economy. Assuming, though, for the sake of argument, that it is, then it's true that one aspect of freedom-based procedural justice (as opposed to "pure" procedural justice) would have to be rules against such monopoly.
Problems associated with groups trying to change the rules so as to favor themselves are a constant feature of any polity, and are not limited to "the Rich". But rather than attacking such groups themselves, a better, freer, and more direct approach would be to find ways to make the rules less vulnerable to such attack -- making them simpler, fewer, and more transparent would be a big help along this line, as well as linking them as directly as possible to constitutional safeguards.
Finally, in a free society, to my mind, a phrase like "letting too much wealth accumulate with a few at the top" doesn't really make sense. Not only because there's no real way to assess what too much wealth is supposed to mean, nor how many are supposed to fit into the "few at the top" -- both categories are frequently and quickly enlarged under the envious attacks of demagogues -- but also because no one thinks of letting wealth accumulate any more than you might imagine letting satisfaction accumulate, or letting enlightenment accumulate -- these being aspects of lives that flow in the wake of the choices, qualities, and luck of free human beings, and not aspects that anyone would think it their business to control.
Posted by: Larry | May 30, 2005 7:29:42 AM
Posted by: le sequoit
Larry,
In a time when the accumulation of wealth is increasingly skewed toward the upper classes, The curve of this process is accelerating, and the curve of the acceleration of this curve is also accelerating, I think the situation might warrant a look-see.
Posted by: le sequoit | May 30, 2005 8:14:29 AM
Posted by: Ted
Mr. Ridgely --
I have seen that claim made before - what empirical evidence do you have to support it?
Posted by: Ted | May 30, 2005 11:02:17 AM
Posted by: Sans Serfs
I think the most interesting point to address here is that the vast proportion of increases in human well-being over the past century or so have come from advances in technology and their exploitation by business [including agri-business, medi-business, etc], not increases in redistributive efforts. It's possible that some of these very advances [especially information technology, due to the huge leverage it enables] have led to increases in standard of living while also widening disparity of income levels.
However, redistribution does not create wealth and it does not generally incentivize behaviors that lead to future wealth creation or independence from redistribution.
The case could be argued that societal spending on education is a form of investment, and therefore an intelligent way to spend resources. Fixed drags like redistributive consumption grants are not investments. It would be much better for all if they did not need to exist.
Therefore, while it can be argued that "safety-net" style social insurance and consumption grants should exist, it is much more difficult to argue either empirically or intellectually that those safety nets should not be set fairly low, and that Hayek's notion of providing for fundamental needs should be their goal, not wholesale distribution of consumption income across classes.
Posted by: Sans Serfs | May 30, 2005 11:31:29 AM
Posted by: razor
"I think the most interesting point to address here is that the vast proportion of increases in human well-being over the past century or so have come from advances in technology and their exploitation by business [including agri-business, medi-business, etc], not increases in redistributive efforts."
This is exactly the sort of non sense that is so irksome, because in the name of clear eyed realism, it completely misstates the facts.
Name one area with increases in human well being as a result of technology that is not the results of three key elements: government investment, an academic reserach and development sector with contempt for business; and government buying to get the key industry going. The semiconductor industry, the software industry, the internet industry, the worldwide web, the biotech industry, the existence of a genetic industry - in each an every one all the heavy lifting was done without business, and any number of boobs could have commercialized the business.
Yet, we end up with, from intellectuals, this foolish false dichotomny about redistribution of wealth versus letting people with money buy the society they live in, and others around the world. Shameless. Anti empirical. Anti realism.
Posted by: razor | May 30, 2005 1:02:41 PM
Posted by: Bret
razor wrote: "Name one area with increases in human well being as a result of technology that is not the results of three key elements: government investment, an academic reserach and development sector with contempt for business; and government buying to get the key industry going."
So clearly, if we all were academics and/or worked for the government, we'd all be fabulously wealthy - you know, just like the Soviet Union!!!
Posted by: Bret | May 30, 2005 1:59:50 PM
Posted by: Larry
Well, maybe the academics wouldn't be "fabulously wealthy" in any case, since, you know, they have contempt for that sort of thing -- but it does seem hard to understand why, with all its state investment and government buying, the Soviet Union is in the dustbin of history, doesn't it?
Posted by: Larry | May 30, 2005 3:47:10 PM
Posted by: razor
Bret:
Is that self caricature deliberate? As a conservative, are you satisfied that you can mischaracterize what others said so you can beat up straw men to prove you are right? Do you care about facts, or, only about the right to wallow in some silly sulk against some unknown demon?
Here is what I wish: you get to live in your straw man world, and I get to live in the real world. I get the world wide web, internet, microprocessors. You get straw men to beat the hell out of. You wouldn't be heard from here, seeing, as you would have no www, internet, or microprocessors without what you scorn.
Posted by: razor | May 30, 2005 4:35:58 PM
Posted by: Sans Serfs
razor-
I might dispute the relative importance of government investment in technology with you - however I agree it has been occasionally effective.
However, that type of government expenditure is clearly in the realm of investment, not consumption. If you read my post more carefully you will see how I diferentiate between them. I bleieve the case cna be made for targeted government investment [especially in education, via loans or outright subsidies]; the case for large transfer payments for redistributing consumption is more difficult to make.
I kind of disagree that the people who bring technology into the realm of commerce are all part of the booboisie, but chaucun a son gout, as they say.
Posted by: Sans Serfs | May 30, 2005 5:10:51 PM
Posted by: razor
The Issue:
"Set up a system of fair, impersonal rules governing our interactions and applicable to all, let people choose freely from among the opportunities generated by acting within the constraints of the rules, and whatever distributions of goods result from following the rules will be just."
The empirical reality: Microsoft, among others, has a distribution of goods in good part as a result of unfair, personal rules.
Another empirical reality: an "investment" is a resitribution of goods. Further, an "investment" cannot be neutral. Some will get direct benefit, some will only get direct loss. The net gain to come will go disproportionately to those already rich.
The analytical truth is that the driving distinction is emotional: Bret, for example, exposes a mortal fear some inferior government bureacrat will ruin human existence by stealing Bret's hard earned money and giving it to some whore mongering criminal drug addicts, which, it is apparently in human nature to be, given the opportunity, according to one emotional fear. This emotional fantasy paralells others, like, if people are free to choose, they will all be moes and lesbos. Emotional issues, hiding in analytical talk about procedure, substance, and taking from the rich to give to the cheaters.
Posted by: razor | May 30, 2005 11:30:55 PM
Posted by: Bret
razor cuts: "Do you care about facts ... ?"
Certainly not your "facts" because they're all mixed up. Let's see you prove your "fact" that in an alternative universe with minimal government funding that there would be "no www, internet, or microprocessors" (my "straw man world"). Especially, given that in this universe, the computer (which needed to come before microprocessors, the Interent, and the www), was first developed at Bell Labs, part of a private company. Especially since private companies (Intel for example), took ICs from two gates to 410,000,000 transistors in the space of 45 years with very minimal government input relative to total revenue.
Sure, everybody, including Intel, is at the government trough. That in no way proves as "fact" that it wouldn't be even better without government intervention.
Posted by: Bret | May 31, 2005 1:24:36 AM
Posted by: Dan Kervick
I found this post, and several of the responses to it, to be even more in the realm of ivory tower fantasy than most of the posts on this site.
"Rules" and "laws" and the "state" mean nothing without power. Freedom is not protected by abstact systems of rules. It may, however, be protected to some extent by rules that have behind them organized groups of people, groups that command sufficient coercive power and collective resolve to put the rules into effect.
In real human societies, the ones that exist outside of libertarian philosophy books, rules are constantly broken. They are also constantly being changed and revised. And both the rule-breaking that people get away with, and the the direction in which rules are changed, serves the interests of those who possess the power to break rules with impunity, or to influence the institutions charged with writing, maintaining and enforcing rules - even if that institution consists of nothing but me, a gang of friends, and an arsenal of weapons.
I don't understand the libertarian obsession with the "state". It is true that if a large state exists, and I have a great degree of power, I may oppress you by using that power to seize more control of the coercive apparatus of the state, and then send the police to club you over the head. But if there is no state, then I may simply direct a few associates to accompany me to your abode and club you over the head directly, without any intermediaries. The idea that somehow we would all somehow be magically protected from curtailments of our freedom if there were no state, or only a "minimal state" is ludicrous. That doesn't mean that a huge coercive state is best either. What is most important is the balance of power within society. And the balance can never be settled and perfected, so that we all live happily ever after. The balalnce is constantly disturbed by the efforts of individuals, and then must be restored by exercises of politics.
The most important reason to be concerned with outcomes in the distribution of wealth is not on account of "merit" or "distributive justice", but on account of the fact that in all human societies the distribution of wealth and the distribution of power are the same thing. Wealth confers power automatically. To possess power over others is to have control over the objects of their desire and aversion. And the fact that something counts as wealth reflects the fact that it is assigned a value by others - that it is an object of desire.
So if Tom, Dick and Harry notice their their neighbor Bob is accumulating a lot of wealth, even if he accumulates it by "playing fair" according to some wonderful set of "procedural rules", they still have an interest in using their collective power to take some of Bob's wealth away from him. That is because if Bob accumulates even more wealth/power, he will soon be coming with his bought friends to club Tom, Dick and Harry over the head and take some of their stuff, force them to labor for him etc. And the "rules" will not protect Tom, Dick and Harry, since by then Bob will own the rules, and the means of changing and enforcing them.
There is no magic set of rules that will preserve freedom. Freedom is preserved by people: large groups of modesly powerful individuals pool their efforts and their resources to command enough collective power to diminish the power of smaller groups of very powerful individuals. They may do this by making and putting into effect some new rules, or enforcing rules that have already been articulated, but it is a neverending struggle. Some fall, but other will rise, and if they are smart the weak will band together to check the power of the rising class, lest it reaches a level beyond which they can no longer resist.
Freedom is won or lost, preserved or destroyed, by politics - and politics is the organized employment of human powers. Politics must always be about outcomes, never just about process - because while process determines to some extent what the outcomes will be, outcomes also determine what the processes will be.
Posted by: Dan Kervick | May 31, 2005 1:29:32 AM
Posted by: Larry
Dan Kerwick: So if Tom, Dick and Harry notice their their neighbor Bob is accumulating a lot of wealth, even if he accumulates it by "playing fair" according to some wonderful set of "procedural rules", they still have an interest in using their collective power to take some of Bob's wealth away from him. That is because if Bob accumulates even more wealth/power, he will soon be coming with his bought friends to club Tom, Dick and Harry over the head and take some of their stuff, force them to labor for him etc. And the "rules" will not protect Tom, Dick and Harry, since by then Bob will own the rules, and the means of changing and enforcing them.
Riiight. What say you, liberals? Would this be an expression of another proud member of your "reality-based community"? Or is this just some particularly naked version of communism, with exposed cross-ties to fascism?
In this world, we don' need no stinkin' rules, because even if you play by the rules and win, that's just an invite for Tom, Dick and Harry to band together and rob you (no idea how those three bandidos are going to be able to divvy up their spoils, but, you know, that's later, man, and this is now, for us realists). Somehow, there still seem to be "friends" in this world, though it's hard to see how or why this could be when each of the momentary "friends" must constantly be on the lookout lest one of them accumulate more "stuff" with which to buy different "friends" and club the other two ("Hey, why didn't we think of that?" you can imagine the other two stooges whining, as they're forced into slavery). For that matter, it's hard to see how you could "buy" friends, or "buy" anything at all, when all the others have to do is take your money for nothing.
A pretty debased vision, all in all, though I'm sure its author feels that it's just hard-headed, tough-talking, non-ivory tower realism. It's not, but I thought it was worth dwelling on because I don't think it's just a vicious fantasy, either. I think it presents, in an unusually bald form, what a focus on "outcomes", without regard for fairness of process, eventually reduces to -- a grim, nasty, Hobbesian war of each fearful, envy-ridden wretch against each.
Posted by: Larry | May 31, 2005 7:05:18 AM
Posted by: Dan Kervick
Larry,
I am perfectly happy that you find Hobbesian elements in my thinging. I am quite a fan of Hobbes. And just as others have argued in Hobbesian fashion that the best way to prevent war between states is to maintain a balance of power among states, I would argue that the best way to prevent conflict among groups of people within a society is to maintain a balance of power among those people.
I don't at all mean to suggest that we don't need rules. I am all for the rule of law where it is currently established, and its extention into realms where it doesn't yet hold. But my view is that you can't have a durable rule of law suitable for a democratic society - one that promotes the general welfare, guards the libety of all and guarantees equal protection - when you have a system in which the laws permit the legal evoultion of wide disparities in wealth and income. Such a rule of law is self-undermining - it permits the conditions of its decay.
Laws don't work unless they are backed up by coercive power - sanctions, punishments, et al. If power flows to a small minority in society, that minority will succesfully evade the law without punishment, coerce and bribe the magistrates and representatives charged with the maintenance of the rule of law, and use its power to change the laws to their own advantage. I believe this is true of every society, whether we are talking about the ultra-wealthy in our capitalist society, or the elite political class or nomenklatura of former "Communist" societies.
As before, I find that I place a much higher value on democracy than do many libertarians. They often seem to be narrowly focussed on the impositions on liberty that come from government attempts to regulate their lives, but care not at all for the direct rule of one man over another, and for the constriction of liberty that comes from being at the bottom of social pile and having far fewer choices about how to live - and die. Democracy is governance of all, by all. To have democracy, one most positively promote conditions conducive to self-government. It is not enough to set up some rules once - like the hidden God of the Deists - and then let things go.
Needless to say, I want a society in which there is hardly any clubbing over the head going on, and in which life is as easy and pleasant as possible for all its members. I believe the best way to maintain such a society, and prevent vicious conflict among its elements, is for the goods available to people to be distributed as evenly as practicable, and for the members of the society to exert eternal vigilance to make sure the balance of power/wealth is not greatly disturbed.
The motive for addressing inequality is not, to my mind, envy. It is not even some sense of "distributive justice". It is peace and prosperity, and the freedom that proceeds from them.
Posted by: Dan Kervick | May 31, 2005 8:13:15 AM
Posted by: Larry
Well, needless to say, Dan, we all want a society in which everyone is just as nice as they can be to everyone else -- i.e., one in which there's "hardly any clubbing over the head going on". But if you think the way to do that is "for the goods available to people to be distributed as evenly as practicable, and for the members of the society to exert eternal vigilance to make sure the balance of power/wealth is not greatly disturbed", then I really think it's you who's living in some tower -- remind yourself of what you said yourself when you referred to the "elite political class" that emerged in societies that attempted to put such an "ideal" into practice.
We can agree at least that laws need to be enforced. But for you, this force is nothing more than a temporary coalition of the many against the few, with the object of seizing what that coalition judges to be the excess "stuff" of the few. The coalition is temporary because once the initial "few" have been stripped of their wealth, a new "few" will become the focus of a new coalition, and so on, until we're down to individual savages (in the true sense of the word) fighting over scraps. I don't think you've understood Hobbes -- if you hope to find "peace and prosperity" through this attempt at enforced equality, you'll end up with neither.
Posted by: Larry | May 31, 2005 9:00:28 AM
Posted by: Bret
"goods available to people to be distributed as evenly as practicable"
There's no trick to creating an exactly even distribution. It's straightforward to destroy all wealth, then we can all live (and die) in the dirt, all perfectly equal. Be careful what you wish for!
Posted by: Bret | May 31, 2005 9:34:11 AM
Posted by: miab
Bret writes: "Certainly not your "facts" because they're all mixed up. Let's see you prove your "fact" that in an alternative universe with minimal government funding that there would be "no www, internet, or microprocessors" (my "straw man world)"
The straw man you set up was not a no-government world. The straw man you set up was pretending that razor was advocating a no-private-sector world. Razor points out that government intervention was instrumental in technological advances. You pretend he was arguing that an all-government all the time approach is best. That's a straw man. You point out that soviet style Communism was not a success -- as if that is a counterexample to razor's assertions. That's a straw man argument.
The fact you are ignoring is that government was instrumental in laying the groundwork for most technological advances in the modern era. Private industry then takes that groundwork, made further advances, and makes some people a lot of money. You assert, with no evidence, that a total absence of government involvement would have produced better advances.
Of course private enterprise is an important part of technological advances. The objection is that free-market fundamentalists pretend that people who made money through private enterprise did so without a government-sponsored foundation and framework.
Posted by: miab | May 31, 2005 11:52:52 AM
Posted by: razor
Miab
Thanks for doing the work.
And I guess, like diehard marxists I encounter on other blogs, Bret can live in a hypothetical world where his "idea" is superior to mortal's reality infested world. The fact is www is a product of a government research insitute with a very strong ethic against Bret's kind of nonsense, invented by a person who has contrary principles to such nonsense, all on the backbone of government and research and develpment spending, in communities in which no one believes Bret's non sense. And let's not get into the actual realities of behavorial economics.
Interesting how all those who live in fantasy worlds end up the same in this one.
Posted by: razor | May 31, 2005 2:55:31 PM
Posted by: Bret
miab wrote: "The fact you are ignoring is that government was instrumental in laying the groundwork"
That's not a fact, that's an opinion. The fact is that government happened to be involved in the process, not that it was instrumental. You are asserting, also with no evidence (because there is no alternative universe to compare it to), that the government was not just involved, but "instrumental", in other words that it wouldn't have happened at all without the government. I do not accept that assertion as fact.
I do not pretend that the government was not involved. I only assert that the government need not be involved. I don't know whether or not the outcome would have been or will be better or worse without the government and neither do you.
Posted by: Bret | May 31, 2005 3:06:23 PM
Posted by: Dan Kervick
We can agree at least that laws need to be enforced. But for you, this force is nothing more than a temporary coalition of the many against the few, with the object of seizing what that coalition judges to be the excess "stuff" of the few.
No, not at all Larry; there are many other values that are advanced and protected by laws. But to prevent all those good laws from losing some of their efficacy, from offering their protection only unequally, and from being perverted and re-engineered to serve the interests of the few at the expense of the many, a democratic society should be careful not to allow exceptional political power to flow toward privileged minorites. In other words it must be careful that it not cease to be a democratic society. And allowing exceptional wealth to flow toward such minorities is the same thing as allowing power to flow toward them, since wealth always carries power.
The coalition is temporary because once the initial "few" have been stripped of their wealth, a new "few" will become the focus of a new coalition, and so on, until we're down to individual savages (in the true sense of the word) fighting over scraps.
The fact that groups and individuals continulally rise and fall in power, and that new coalitions continuallly emerge to check and balance the power of the risers, just sounds like politics as usual to me. It is not a degenerative process in the direction of savagery, but a restorative process that finds new equilibria as imbalances emerge. However democracy can indeed degenerate if these natural restorative powers are permanently stymied.
Posted by: Dan Kervick | May 31, 2005 4:30:07 PM
Posted by: Larry
I view power as such as just a fact of life in any society, Dan, and while it is associated with wealth it's not identical with it. You worry that the wealthy will be able to break the rules of a democratic society -- but the key point is this: surly, if the citizens of a democratic society are powerful enough to seize the wealth of the richest among them, then they're powerful enough, instead, to simply insist and ensure that the wealthy follow the rules. This does, as you say, mean that the citizens need to be vigilant, but for rule-breaking rather than for wealth creation and accumulation. This focus has the added advantage that we're not trying to punish success or achievement, and not appear to be merely pulling down "the risers", which, quite apart from being counterproductive for the society as a whole, has what I feel to be -- though perhaps you don't -- a manifestly unjust and immoral aspect to it. Which is at least one source of what I see as the degenerate instability inherent in a kleptocracy.
Posted by: Larry | May 31, 2005 5:51:16 PM
Posted by: razor
"I only assert that the government need not be involved. I don't know whether or not the outcome would have been or will be better or worse without the government and neither do you."
Gosh Bret, in a technological world, where are your examples? The record is of government involvement, and, non profit making involvment. There is no contrary evidence. You are on the same logical ground as someone who believes in the withering away of the state - "you can't prove I'm wrong. Nyah nyah nyah nyah."
Cheater = conservative.
Posted by: razor | May 31, 2005 6:46:46 PM
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