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[ 1 ]. Ludwig by von Mises (1881-1973). [ 2 ] Ludwig by von Mises Laissez Faire or Dictatorship 1. What the Encyclopedia of the Social Sciences says about Laissez Faire [= “hands off!”] French champions of economic freedom: aimed at establishment of the unhampered market economy:

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Ludwig by von Mises (1881-1973)



Ludwig by von Mises

Laissez Faire or Dictatorship

  • 1. What the Encyclopedia of the Social Sciences says about Laissez Faire [= “hands off!”]

  • French champions of economic freedom: aimed at establishment of the unhampered market economy:

  • abolition of all statutes preventing the more industrious and more efficient people from outdoing the less industrious and less efficient competitors and restricting the mobility of commodities and of men.

  • It was this that the famous maxim was designed to express.

  • Laissez Faire = Free Market Economy

  • G.D.H. Cole says, the maxim of laissez faire "cannot stand examination"

  • it is only prevalent in "popular economics," it is "theoretically bankrupt," an "anachronism,"

  • it survives only as a "prejudice,”; "as a doctrine deserving of theoretical respect it is dead."

  • [He might as well be quoting any contemporary Canadian pundit, in or out of the economics profession...]

  • Mises says that Cole is “right to note that rejection of laissez faire is "as prominent in the national idea of Fascism in Italy as in Russian Communism."



Ludwig by von Mises

Laissez Faire or Dictatorship

  • The liberal program is an indivisible and indissoluble whole

  • Its various parts condition one another.

  • That political freedom can be preserved in the absence of economic freedom, and vice versa, is an illusion.

  • Political freedom is the corollary of economic freedom.

  • It is no accident that the age of capitalism became also the age of government by the people.

  • [Comment: what kind of non-accident was it, though??]

  • If individuals are not free to buy and to sell, they turn into virtual slaves of the omnipotent government

  • The main target of socialists’ passionate attacks was liberalism as a whole.

  • They did not distinguish between the political and the economic aspects of liberalism.



Ludwig by von Mises

Laissez Faire or Dictatorship

  • Mises claims this: “Political freedom is the corollary of economic freedom.”

  • Discussion: Did he mean democracy?

  • If not, then what he says is clearly, and necessarily true:

  • for, Economic Freedom is when your property rights are respected

  • - and that is a broadly political matter. Your having them requires government non-interference. It also may require protection (e.g. from theft) and governments normally are supposed to provide that ...

  • Economic freedom is one of the (major) possible freedoms that political institutions could (and should) respect

  • But will democracy respect it?

  • No!

  • (Or at least, that is hardly dependable.

  • Democracy is majority rule, and the majority may well try to exploit its power to exact economic benefits from the minority ...


[Mises - 5]

  • Anglo-Saxon socialists discovered that it was a hopeless venture to attack liberalism openly.

  • Anti-liberalism's strategy: camouflage itself as “true and genuine liberalism”

  • [This is done by converting negative rights into positive ones...]

  • Anglo-Saxon socialists arrogated to themselves the appellations liberal, progressive, and democratic.

  • They began flatly to deny that political freedom is the corollary of economic freedom.

  • They boldly asserted that democratic institutions can work satisfactorily only where

    • (a) the government has full control of all production activities and

    • (b) the individual is bound to obey unconditionally all orders by the central planning board.

  • In their eyes all-round regimentation is the only means to make people free

  • In this country the term "liberalism" is nowadays more often than not used as a synonym for communism.

  • Semantic innovation left the advocates of freedom without any name.

  • Socialists reserve "economic royalists," "Wall Street sycophants," "reactionaries,"and so on for classical liberals.


[Mises - 6]

• Today it is no longer difficult for intelligent men to realize that

• the alternative is market economy or communism.

• Production can either be directed by buying and abstention from buying on the part of all people, or it can be directed by the orders of the supreme chief of state.

• Men must choose between these two systems of society's economic organization. There is no third solution, no middle way.

  • [Note: Mises does not point out that it is still a matter of degree.

  • [Government mostly takes over health, education, and welfare, and only a few consumer-goods areas]

  • John Stuart Mill's confused treatment of government interference with business:

  • Mill claims that production and distribution are entirely separate

  • [Marx more accurately sees them as closely linked]


[Mises - 7]

• Cairnes's analysis: the doctrine of laissez faire is that "the promptings of self-interest will lead individuals, in all that range of their conduct which has to do with their material well-being, spontaneously to follow that course which is most for their own good and for the good of all."

  • This assertion, he says, “involves the two following assumptions:

  • first, that the interests of human beings are fundamentally the same - that what is most for my interest is also most for the interest of other people; and,

  • secondly, that individuals know their interests in the sense in which they are coincident with the interests of others, and that, in the absence of coercion, they will in this sense follow them.

  • If these two propositions be made out, the policy of laissez faire . . . follows with scientific rigour.”

  • Cairnes accepts the first - but he rejects the second - the minor - premise:

  • "Human beings know and follow their interests according to their lights and dispositions; but not necessarily, nor in practice always, in the sense in which the interest of the individual is coincident with that of others and of the whole.”

  • [Comment: Both are wrong, of course. The interests of different people are not the same - but

  • they are generally compatible...]


[Mises - 8]

• Accept: Human beings are fallible

• they sometimes fail to learn what their true interests would require them to do.

• Furthermore, there are "such things in the world as passion, prejudice, custom, esprit de corps, class interest, to draw people aside from the pursuit of their interests in the largest and highest sense."

  • That is very unfortunate

  • But, how are we to prevent mankind from being hurt by people's bad judgment and malice?

  • non sequitur: by substituting the government's discretion for that of the individual citizens?

  • Are governments endowed with intellectual and moral perfection?

  • Are the rulers not human too, not themselves subject to human frailties and deficiencies?

  • “The legitimate king cannot err”? - “ his royal touch miraculously cures scrofula.”

  • Werner Sombart [“philosopher” of Nazism] :

  • “the Führer gets his orders directly from God, the supreme Führer of the Universe”

  • --> [“The State is the March of God in the world”!]

  • If so, you can no longer raise any objections against planning and socialism.

  • Why tolerate the incompetence of clumsy and ill-intentioned bunglers [i.e., ordinary people]

  • if you can be made happy and prosperous by the God-sent authority?

  • But Cairnes is not prepared to accept "the principle of State control, the doctrine of paternal government."

  • He does not comprehend that it is indispensable to choose between the supremacy of individuals and that of the government.

  • [q: meaning what by ‘indispensable’?]


[Mises - 9]

• Some agency must determine how the factors of production should be employed and what should be produced.

  • If it is not the consumer, by means of buying or not, on the market, it must be the government by compulsion.

  • If one rejects laissez faire on account of man's fallibility and moral weakness,

  • one must for the same reasons also reject every kind of government action.

  • [the question is whether government is likely to do worse for us than we are by ourselves..]

  • One of the distortions to which the self-styled "Progressives" resort in smearing laissez faire

  • is the statement that consistent application of laissez faire must result in anarchy.

  • There is no need to dwell upon this fallacy.

  • [Yes there is, and it’s not a fallacy at all!]

  • “ Cairnes's argument against laissez faire, when consistently carried through to its inevitable logical consequences, is essentially anarchistic.” [?]

  • [?] Mises must be thinking of something special: e.g., that without market pricing, state economic decisions will have nothing to guide them, and so be chaotic...


[Mises - 10]

• "Conscious Planning" vs. "Automatic Forces"

  • As the "Progressives" see things, the alternative is: "automatic forces" or "conscious planning”

  • to rely upon automatic processes is sheer stupidity.

  • Nothing happens without purposive action.

  • Conscious action, is “incomparably superior to the absence of any planning.”

  • The Cairns critique seems to be that Laissez faire means:

  • “ let evils last and do not try to improve the lot of mankind by reasonable action”

  • This is utterly fallacious and deceptive talk. - from an inadmissible interpretation of a metaphor.

  • Automatic means "unconscious, unintelligent, merely mechanical." - "not subject to the control of the will . . . performed without active thought and without conscious intention or direction."

  • What a triumph for the champion of planning to play this trump card!

  • The truth: the choice is not between dead mechanism/ rigid automatism on the one hand and conscious planning on the other hand.

  • The alternative is not plan or no plan. The question is: whose planning?


[Mises - 11]

• Namely: Should each member of society plan for himself or should the paternal government alone plan for all?

  • it is spontaneous action of each individual versus the exclusive action of the government.

  • It is freedom versus government omnipotence.

  • [Question: Is he right about this? Or is there a reasonable way to distinguish between what is up to Caesar and what is up to us?]

  • Laissez faire does not mean: let soulless mechanical forces operate.

  • It means: let individuals choose how they want to cooperate in the social division of labor and let them determine what the entrepreneurs should produce.

  • Planning means: let the government alone choose and enforce its rulings by the apparatus of coercion and compulsion.


[Mises - 12]

• Cairnes wanted to do away with the democracy of the market and to establish the absolute rule of a production czar.

He might pretend that he is right from a "higher" point of view, and that as a superman he is called upon to impose his own set of values on the masses of inferior men.

  • But then he should have been frank enough to say so plainly.

  • All this passionate praise of the super-eminence of government action is merely a poor disguise for the individual interventionist's self-deification.


[Mises - 13]

• The only “true” plan is the one of which the individual planner fully approves.

  • All other plans are simply counterfeit.

  • No planner was ever shrewd enough to consider the possibility that the plan which the government will put into practice could differ from his own plan.

  • The various planners agree only with regard to their rejection of laissez faire, i.e., the individual's discretion to choose and to act.

  • They disagree entirely on the choice of the unique plan to be adopted.

  • To every exposure of the manifest and incontestable defects of interventionist policies the champions of interventionism always react in the same way.

  • These faults, they say, were the sins of spurious interventionism; what we are advocating is good interventionism. And, of course, good interventionism is the professor's own brand only.

  • [Democracy enables collectivities to select among rival despots....]


[Mises - 14]

• [“Benevolent” Despotism....]

• note the preponderant role played by the pressure groups and lobbies of civil servants and those university graduates who longed for government jobs.

•[cf. Wal-Mart and New York - the unions objected....]

  • The Fabian Society had in its earlier days a "wholly disproportionate representation of civil servants."

  • civil-service mentality is reflected in the semantic practices of the new factions.

  • Seen from the point of view of the particular group interests of the bureaucrats, every measure that makes the government's payroll swell is progress.


[Mises - 15]

• Positive & Negative again:

  • “Politicians who favor such a measure make a positive contribution to welfare, while those who object are negative. Very soon this linguistic innovation became general.

  • The interventionists: “liberals with a positive program as distinguished from the merely negative program of the "orthodox" laissez-faire people”

  • he who advocates tariffs, censorship, foreign exchange control, and price control

  • a positive program that will provide jobs for customs officers, censors, and employees of the offices for price control and foreign exchange control.

  • Laissez faire is the embodiment of negativism,

  • while socialism, in converting all people into government employees, is 100-percent positive.

  • The more a former liberal completes his defection from liberalism, the more "positive" does he become.


  • “It is hardly necessary to stress that this is all nonsense.”

  • Whether an idea is enunciated in an affirmative or in a negative proposition depends entirely on the form which the author chooses to give it.

  • The "negative" proposition, I am against censorship, is identical with the "positive" proposition, I am in favor of everybody's right to publicize his opinions.

  • Laissez faire is not even formally a negative formula; rather it is the contrary of laissez faire that would sound negative.

  • Essentially, the maxim asks for private ownership of the means of production.

  • This implies, of course, that it rejects socialism.

  • The supporters of laissez faire object to government interference with business not because they "hate" the "state" or because they are committed to a "negative" program.

  • They object to it because it is incompatible with their own positive program, the free market economy.

  • Conclusion: Laissez faire means: let the individual citizen, the much talked-about common man, choose and act and do not force him to yield to a dictator.


  • [The interesting question: why do people embrace big government?

  • One obvious answer: in a democracy, the bottom 49% get to pick the pockets of the upper 51%

  • Democracy: highly responsive to sound-bytes

  • Not very responsive to sober factual analysis

  • Example: the Minimum Wage...

  • Imposing a wage means that companies wanting to pay less cannot do so

  • If they can’t profitably employ A at or above the MW, A will not be employed

  • [Then the government will sustain A at the officially approved income level]

  • - and prices for everyone else go up even more....

  • - just what the rulers want!]


[Mises - 18]

• Man's "True" Needs

  • laissez faire: the goods produced are not those which people "really" need, but those goods from the sale of which the highest returns are expected

  • It is the objective of planning to direct production toward the satisfaction of "true" needs.

  • But who should decide what "true" needs are?

  • Laski, former chairman of the British Labor Party):

  • "the use of the investor's savings will be in housing rather than in cinemas."

  • It does not matter whether or not one agrees with the professor's personal view that better houses are more important than moving pictures.

  • The fact: consumers, by spending part of their money for admission to the movies, have made another choice.

  • If the masses of Great Britain, the same people whose votes swept the Labor Party into power, were to stop patronizing the moving pictures and to spend more for comfortable homes and apartments, profit-seeking business would be forced to invest more in building homes and apartment houses, and less in the production of swanky pictures.

  • Professor Laski aims to defy the wishes of the consumers and to substitute his own will for theirs.


[Rawls - 19]

John Rawls (1921-2002)


[Rawls - 20]

• John Rawls (1921-2002): A Theory of Justice (Harvard UP, 1971)

[later, Rawls wrote several significant additions, especially Political Liberalism, 1991, and Justice as Fairness: A Restatement (2002) We do not look at those]

  • BACKGROUND: the “Circumstances of Justice”

  • - people are mortal, finite, and of varying abilities and different “theories of the good”

  • - cooperation can pay: we are not in a zero-sum game

  • - everyone knows that everyone is rational

  • - people are “non-tuistic” -- they don’t “take an interest in one another’s interests”

  • [What is the status of this last one?]

  • METHODOLOGICAL: “Reflective Equilibrium”

  • Rawls says that we work from our “considered judgments” on various moral matters.

  • Some unspecified set of those is said to be such that we would not be willing to give them up.

  • He also says, however, that they can be modified in view of a good theory.

  • The idea is that we go back and forth between previously held judgments and theory, and aim at the best mix

    of the two - hence, “reflective equilibrium”, the position from which we don’t move in either direction.


John RawlsA Theory of Justice (1971)

[Rawls - 21]


  • Rawls says he is taking the idea of the social contract to a “higher level of abstraction”

  • To talk “contract” talk, we need a starting point

  • The idea is to move from that point in a positive way for all parties - each actuated by his own interest

  • The idea is for the members of society to agree on the principles that will forever after govern society

  • Principles of Justice not self-evident - we need arguments - to work out the best conception

  • The Agreement is Hypothetical, not actual

  • The “original position” is to be the starting-point.

  • But what determines it, if not history? - that’s where “reflective equilibrium” comes into it..


John RawlsA Theory of Justice (1971)

[Rawls - 22]

• The Veil of Ignorance

  • essential: no one knows his place in society

  • - nor his “conception of the good”

  • - nor his “special psychological propensities”

  • [or his specific powers or abilities]

  • - Everyone knows the Circumstances of Justice

  • -> this is said to make the agreement “fair”

  • Going behind this “veil” is claimed to be the appropriate way to generate justice.

  • Anything we do from there will illustrate “pure procedural justice”: that is,

  • anything agreed to will be ipso facto just.....


John RawlsA Theory of Justice (1971)

[Rawls - 23]

• Primary Goods

  • - Terms of Negotiation: the “social primary goods”:

  • Defined: these are what anybody wants, no matter what else he wants

  • (they are the general means for promoting one’s life

  • - whatever it is.

  • - Specific conceptions of the good not allowed

  • - Utility not allowed...

  • Note: it is in this, especially, the Rawls is a liberal)

  • Rawls’ List:

  • Liberties, Powers, Opportunities, Income, Wealth

  • and “The social bases of Self-respect” [?]

  • Assumption: Each wants to maximize his personal index of Primary Goods

  • Note: there are also “Natural goods”: Health; Intelligence; Imagination

  • [These are not directly under social control, though “influenced by the basic structure”]


John RawlsA Theory of Justice (1971)

[Rawls - 24]

  • The General Argument:

  • Nobody knows who he is, so the safe working assumption is Equality

  • [why the ‘so’?]

  • [why is this “safe”?]

  • Equality is the “benchmark of justice”

  • [what does this mean? Presumably that you could depart from it only if some duty of justice required it.... self-interest presumably wouldn’t be enough]

  • But inequalities are acceptable if they are of benefit to everyone...

  • [Question: ‘benefit’ how?

  • Suppose that x is good for A and neutral for B: A is better off, B no worse off

  • - this is weak Pareto superiority

  • Does this count as “benefiting everyone”?]


John RawlsA Theory of Justice (1971)

[Rawls - 25]

  • Derived:

  • (1) The General Conception of Justice:

  • “All social primary goods are to be distributed equally unless an unequal distribution of any or all of these goods is to the advantage of the least favored”

  • Question (again): benefit how? If the least favored are not disadvantaged, is that enough?

  • (enough, that is, to qualify as “advantaged” in the foregoing criterion?)

  • [If it is not enough, why not? ...]


John RawlsA Theory of Justice (1971)

[Rawls - 26]

  • (2) Specific Conception: The Two Principles of Justice

  • FIRST: Each Person is to have an Equal Right to the most extensive total system of equal basic liberties compatible with a similar system for all

  • [earlier formulation: “each is entitled to the maximum liberty compatible with a like liberty for all”]

  • [Why the difference??]

  • SECOND: (a) [the “difference principle” aka the

  • “maximin principle”: Social and Economic Inequalities are to be arranged so that they are to the greatest benefit of the least advantaged


  • (b) attached to offices and positions open to all under conditions of fair equality of opportunity


  • [each successive condition is to be fulfilled before we move to the next ...]

  • P1 first

  • P2a second

  • P2b third


John RawlsA Theory of Justice (1971)

[Rawls - 27]

  • Priority Rules:

  • First rule: Liberty can be restricted only for the sake of liberty

  • 1 - A less extensive liberty must strengthen the total system of liberty shared by all

  • 2 - A less than equal liberty must be acceptable to those with the lesser liberty

  • [Rawls isn’t very clear about what he thinks constitutes an “unequal liberty”

  • - If you are a multimillionaire and I’m not, is that an “unequal liberty” for me??

  • - I think he thinks so; I don’t....]

  • Second rule: The second principle is lexically prior to the principle of efficiency and to that of maximizing the sum of advantages; fair opportunity is prior to the maximin principle

  • note that efficiency is construed in Paretian terms. This seems to leave us with a contradiction:

  • liberty is restricted for the sake of equal opportunity - not just for liberty, as called for by the first priority rule.

  • “An inequality of opportunity must enhance the opportunity of those with the lesser opportunity”

  • [Q: what does ‘equal opportunity’ mean? What is it to “enhance an opportunity”?]

  • [“Hire the morally handicapped”?]

  • [Opportunities are created by other people’s efforts. Am I entitled to an equal

  • share ofyour efforts?]

  • We then get to the “constitutional” level by slowly “lifting the veil of ignorance”

  • [Rawls later writes a “Law of Peoples” to try to apply the theory internationally]


John RawlsA Theory of Justice (1971)

[Rawls - 28]

  • Questions for Rawlsians:

  • 1) does ‘liberty’ include economic liberty?

  • 2) if not, why not?

  • 3) if it does, are the two principles compatible?

  • 4) Rawls supposes that we’ll settle on a system of distributive justice which ignores producers

  • - is that because of the Veil of Ignorance?

  • - why would it have that effect, given that persons behind the veil know what people in front of it are like? Why make an agreement when you don’t know what you’re doing that you know you’ll have no reason to keep when you do?

  • [Rawls claims that our natural assets (such as IQ, say) are undeserved.

  • That is true, of course.

  • Does it follow that society gets to “correct” for their “maldistribution”??]

  • 5) Which offices are to be “open”? All? Or just public ones?

  • - Suppose I want to put my nephew high up in my company’s management?


John RawlsA Theory of Justice (1971)

[Rawls - 29]

  • 6) Would Rawls’s principle achieve anything?

  • - if the “benchmark” of equality can’t be undone by incentives, then don’t we have socialism?

  • - if it can, don’t we just have capitalism?

  • [cf. Narveson, “A Puzzle about Economic Justice in Rawls’ Theory” - on my website, and in one of my books, Respecting Persons in Theory and Practice]

  • 7) Rawls later disassembles ‘liberty’ into ‘liberties’: specific items such as freedom of speech, religion, conscience - but not ownership of productive resources

  • 7a) - why the distinction?

  • 7b) What about Mises’ claim that the liberties can’t be dissected meaningfully? Is he right?


John RawlsA Theory of Justice (1971)

[Rawls - 30]

  • General Remarks against Rawls

  • (1) Would the Veil of Ignorance really yield an agreement on the second principle?

  • - do we agree to “put our productive capacities at the service of Society” (in the sense apparently specified by the Difference Principle)?

  • - Nozick observes that the posited “agreement” beween the unproductive and the productive doesn’t look fair at all:

  • “Our [the untalented’s] agreement with you [the talented] is:

  • we get as much as possible!

  • (2) the argument for liberty, however, is sound: you don’t hit me, I don’t hit you...

  • the kicker is:

  • independently of our relative strengths

  • [note: Hobbes says that “the weakest hath enough to kill the strongest” - and that that’s all that matters. Whether he’s right would seem to be the $64 Trillion question...]


[- 31]

Robert Nozick(1938-2002)


Robert Nozick

[- 32]

  • Nozick’s most famous work: Anarchy, State, and Utopia [Basic Books, 1974]

  • advocate of Minarchism - the “minimal state”

  • Argues that anarchism - no state - won’t work and that the minimal state can be legitimate

  • but no larger state is legitimate

  • The classical view is that the state does or would get the “consent of all”

  • Hobbes says that everyone, “both he that voted for and he that voted against” accept the sovereign who emerges from an election procedure.

  • But why should we be stuck with a government we voted against? Why should we be thought to have consented in advance to whatever emerges from an electoral procedure?

  • To answer this, we need to ask what government can possibly be for that we either directly want, or at least can’t reasonably object to

  • Peter Vallentyne distinguishes three versions of anarchism:

  • (1) it is impossible for any state to be legitimate

  • (2) it would be legitimate if “it efficiently and fairly promotes individual wellbeing and all those governed by it have given, under fair conditions, their free and informed consent to it.”

  • (3) all those governed by it have given appropriate consent - whether or not it “efficiently and fairly promotes individual well-being”

    Nozick’s distinctive contribution is to argue that we don’t even need (3)


Robert Nozick

[- 33]

  • Nozick’s distinctive contribution is to argue that we don’t even need (3)

  • definition:

  • The state claims a monopoly on the use of force in that it prohibits the use of force (or credible threat thereof) without its permission.

  • Nozick’s basic assumptions:

  • In an initial condition of Lockean anarchy, people would form “protective associations”

  • Nozick assumes the classical view of justice:

  • - we “own ourselves” - people can’t use people without their permission

  • - nature belongs to no one initially: as long as we don’t harm others, we get to use it

  • - this includes property rights as normally understood

  • - we can transfer our rights in things to others, as we (and they) choose

  • - we can use force to defend our persons and properties, and exacte compensation from violators

  • [Vallentyne notes that some would question some of this: if a slight injury to A can yield a huge benefit to B, would we not be justified in inflicting it?]

  • Some are “left-libertarians”: they hold that nature is to be shared “equally” and cannot be acquired by individuals to use as the please

  • [in JN’s view, those theorists are not libertarians at all. You are not at liberty if you can’t use things as you please but must always divide everything you produce equally among all.]


Robert Nozick

[- 34]

  • The argument (very tricky)

  • The State looks incompatible with full individual liberty (self-ownership)

  • Our initial rights permit joining with others in voluntary “protective associations” - aggressors are in the wrong and may be repelled or punished by force - so long as the force is voluntarily wielded by those in the association

  • ** Nozick proposes that in any given area a “dominant protective agency” would arise

  • - because of the special advantages of numbers when it comes to wielding force,, e.g.

  • To become a State, a Dominant Protective Agency must

  • (a) be able to “prohibit everyone from using force in ways that it has not authorized, and use force against those who violate this dictate”

  • (b) be effective in getting people to comply with (a)

  • (c) be the only agency with those properties

  • Clients of the DPA will sign over their rights of self-defense to the Agency

  • [this will be efficient. --- will it??]


Robert Nozick

[- 35]

  • The argument (very tricky)

  • Nozick claims that in a state of nature each individual has the right to use force to stop others from using unreliable or unfair enforcement mechanisms against herself.

  • The Agency may use force against any person - even a non-client - who attempt to use unreliable or unfair enforcement mechanisms against its clients.

  • The Agency doesn’t claim a monopoly right -

  • But it has one, because it is the only one with the muscle to enforce its views of what is far and reliable

  • Hmmmm...


Robert Nozick

[- 36]

  • The tricky part: when non-clients use procedures that are not clearly in violation of the rights they use them against - but there is a risk of such

  • this creates general fear

  • Then the DPA prohibits using those procedures, and can succeed in doing so

  • It must compensate the agencies it has prohibited...

  • e.g. by giving a discount for its services to non-clients

  • The DPA thus has effective monopoly - so, it’s a State....


Robert Nozick

[- 37]

  • The argument (very tricky)

  • Questions:

  • (1) would that really be a State? Not in the usual sense. States all claim much greater powers than that

  • (2) Is the DPA’s prohibition of competitors really legitimate?

  • [a} Vallentyne’s examples suggest not

  • [b] “Nozick further claims, however, that the dominant protection agency may prohibit my enforcement procedure when the agency does not have enough information to establish that it is reliable and fair. This seems mistaken. “

  • I agree. Whether a given use of force is just is never settled by the fact that somebody strong enough to employ it thought it was just.

  • (3) [my critique]: is the original argument for a DPA correct? Maybe not.

  • Large protection agencies are not necessarily more efficient than small ones.

  • -> As an argument against anarchism, his argument seems too thin (to me, anyway)


Robert Nozick

[- 38]

  • The argument (very tricky)

  • -> This result is perfectly general, I think.

  • (3) [my critique]: is the original argument for a DPA correct? Maybe not.

  • Large protection agencies are not necessarily more efficient than small ones.

  • -> As an argument against anarchism, his argument seems too thin (to me, anyway)


Robert Nozick

[- 39]

  • Nozick then argues (in the rest of the book) that the government is not justified in doing any more than prohibiting assaults.

  • In this he agrees with Bastiat, e.g.

  • His arguments against Rawls are superb.

  • [And Rawls is by far the most influential political philosopher of recent times]


Robert Nozick

[- 40]

  • A more important argument (maybe)[mine, not Nozick’s]

  • Suppose there is a good, G, such that the savings made possible by making it involuntarily provided to (and by) all are such that

  • nobody pays more than he would have paid if he could get it independently

  • This sounds like a good deal for all.

  • -- Does it ever happen?

  • -- Can the State make it happen?

  • --- dubious!

  • [See The Efficient Society (“Why Canada is as Good as it Gets”) by Joseph Heath [Penguin Canada, 2002]

  • [I have my doubts about his main arguments... but it’s interesting!]


Robert Nozick

[- 41]

  • Two Views of the State:

  • (1) A bunch of dedicated servants of the public, out to help us all do better

  • (2) a bunch of (possibly inadvertent) despots, out to maximize the role of the State - at our expense

  • Who’s right??

  • This requires:

  • - Careful thought about the theory of government

  • - Good Economic Analysis

  • - Attention to History

  • - Good Political Sociology

  • Time may tell!


Final Thoughts

[- 42]

  • Why political philosophy is important

    because the State has powers that can work evil in your life

    [It claims also to have powers to do good for you

    But: can it do good for you without doing evil to someone else??]

    good, in general, comes from voluntary individual activity

  • including cooperative activity

  • - but forced cooperation is no cooperation

    People differ:

    - in their aims, interests, ideals ...

    - in their capabilities

  • in their personalities

    Government is biased in favor of large groups

    [partly because larger groups have more votes]

    The only efficient way to promote social values is by voluntary activity

    - but The State negates voluntary activity at all levels


Final Thoughts

[- 43]

Politics always thinks it can “help”:

“The Ministry of Citizenship and Immigration provides many programs and services to support volunteers and volunteerism in Ontario. We invite voluntary organizations to use the tools and information on this website, and learn about the wide variety of programs across government designed to support you.”

(uh, huh... and provides it how?? - Why, by involuntary taxation, of course!)

P. J. O’Rourke: “Giving money and power to government

is like giving whiskey and car keys to teenage boys.”

  • In general: if there’s a way of doing something without government, then it should be done that way - not by government.

    Liberalism is based on the idea that we each have our own lives to live - we run them ourselves.

    Governments can’t resist running people’s lives for them.

    That is probably an insoluble problem.


Final Thoughts

[- 44]

Narveson on Minarchy

Minarchy is “minimum government” (but some government)

Libertarian position: everyone has a fundamental, general right to liberty, limited only by the like right of all others.

= Another way of stating it: We are morally forbidden to initiate force or fraud against our fellows.

the right to one’s life and property is negative. Accordingly, we do not have the duty to protect people who are attacked

  • including oneself, for that matter.

    So: this includes initiating force against people who don’t want to subscribe to a particular protection service.

    But since the State is a monopoly, it is hard to see how that restriction can be observed, in any real-world situation.


    Therefore, nobody has the right to compel us to assist others in defending themselves.

    In that respect, it is just like health care, and so on ...


Final Thoughts

[- 45]

Narveson on Minarchy

Minarchy is “minimum government” (but some government)

Libertarian position: everyone has a fundamental, general right to liberty, limited only by the like right of all others.

= Another way of stating it: We are morally forbidden to initiate force or fraud against our fellows.

So: this includes initiating force against people who don’t want to subscribe to a particular protection service.


Final Thoughts

[- 46]

Randy Holcombe

“the purpose of this essay is to defend and extend the classical liberal idea of limited government.

The debate over limited government versus orderly anarchy typically turns on the effectiveness of government versus private means to achieve certain ends.

Government’s defenders argue that markets cannot provide some goods and services as efficiently as government ...

This essay argues that the effectiveness of government versus private arrangements to produce goods and services is largely irrelevantto the issue of the desirability of government in a libertarian society.

  • Governments are not created to produce goods and services for citizens. Rather, they are created and imposed on people by force, most often for the purpose of transferring resources from those outside government to those within.

  • So the fact that they don’t do well at producing those goods and services is irrelevant ...


Final Thoughts

[- 47]

Randy Holcombe

  • The creation of government may enhance everyone’s welfare, because government has the incentive to protect the source of its income – the productive capacity of its citizens.

  • But the “contract” that creates government is not made because everyone is willing to agree to it, and is not made because everyone will benefit.

  • Rather, it is a result of the ability of those in government to force it on those outside of government.

  • The exchange of protection for tribute is the defining characteristic of government. Government imposes itself by force, takes a share of its citizens’ incomes, and provides protection for them in exchange.

  • [In short: government is, not a protection service, but a protection racket

  • We cannot assume that the motives of governments are benign


Final Thoughts

[- 48]

Randy Holcombe

  • Economic analysis that shows the effectiveness of markets in allocating resources does so within a framework that assumes that property rights are protected and that exchange is voluntary.

  • Economic theorists make the assumption that market exchange is the result of mutual agreement, without theft or fraud.

  • this assumption of voluntary exchange amounts to assuming that the industry’s output is being produced as a prerequisite for showing that it could be produced by the market.


Final Thoughts

[- 49]

Randy Holcombe

  • The use of force is an integral part of these firms’ business activities, and protection firms have an incentive to use their resources for predatory purposes

  • - which includes keeping competitors from entering the market.

  • [i.e., preserving its monopoly]

  • Firms with market power in the protection industry are uniquely in a position to use force to prevent competitors from entering the market, or to encourage people to become their customers, simply as a result of the nature of their business.

  • -which is costly and has a relatively low return,

  • into mafias (or protection firms), which provide higher benefits to predators, and from there into governments, which are monopoly mafias or protection firms.

  • [- and that’s why government is ubiquitous!]

  • .


Final Thoughts

[- 50]

Randy Holcombe

  • People may not need government, or want government, but inevitably they will find themselves under government’s jurisdiction.

  • Governments have the ability to take more from their citizens than bandits or mafias because of their organization, but a part of the government’s advantage requires them to be less predatory. ... If governments nurture the productivity of their citizens, the size of their take can continue to increase over time.

  • If a group of outside predators establishes itself as a government, it will have every reason to keep most of the surplus for itself. ...

  • Government will be less predatory if it is designed by members of the governed society

  • - and if those in government have a long time horizon.

  • .


Final Thoughts

[- 51]

Randy Holcombe

  • some institutional arrangements do a better job of securing liberty and creating prosperity than others. Nations that have protected property rights and allowed markets to work have thrived while nations that did not have remained mired in poverty.

  • A minimal government will make its citizens more productive than an oppressive government, [ look at the differences in rich and poor nations around the world.]

  • From a practical standpoint, there appears to be little chance that the state will wither away and allow an orderly anarchy to replace it. The state will keep its hold on people by force.

  • There is a better chance that liberty can be expanded by designing government institutions so that they allow people more freedom.

  • .


Final Thoughts

[- 52]

Randy Holcombe

  • The arguments presented here suggest that whether private arrangements are superior to government activity is largely irrelevant.

  • The libertarian argument for a minimal government is not that government is better than private arrangements at doing anything

  • -- but that it is necessary to prevent the creation of an even more predatory and less libertarian government.

  • .


Final Thoughts

[- 53]

Randy Holcombe

  • Question: what is the function of normative deliberations?

  • Answer: to tell us which way is forward (or, up)

  • Randy’s view is that government is inevitable.

  • This seems to be an instance of, If you can’t fight ‘em, join ‘em!

  • Now, a question is: in what sense are we “fighting” them??

  • One only fights (rationally) if it will do any good.

  • Throwing bombs and such does not

  • Randy’s view is not that government is a good thing since it’s inevitable.

  • If it’s inevitable, it doesn’t matter whether it’s good or not.

  • But his view also is that we should go for liberal government rather than illiberal: some are better than others.

  • OK: why does this keep us from saying that none at all is best of all? (if it is!)

  • .


Final Thoughts

[- 54]

John Tomasi’s Market Democracy

  • some of his best friends are libertarians

  • most of them are left-liberals

  • The difference:

  • lib: market (capitalist) rights have “intrinsic moral value”

  • civil and political rights are types of property rights

  • left: civil & political rights more important than property rights

  • equality = social justice ...

  • Market democracy

  • economic rights as important, but not more, than the others

  • property rights part of a “mlti-faceted liberty-protecting scheme”

  • (along with speech and religion etc)

  • not egalitarianism but Prioritarianism: maximize the “bundle” going to the worst-off

  • (Rawls’ principle ...?)

  • Question: can we combine the apparently uncombinable?

  • .


Final Thoughts

[- 55]

Further Game-theoretic thoughts

Government isn’t generally in PD with us; rather, it’s more like “Chicken”

Here’s the diagram:

Note that Al and Bob have a common worst

But the worst for us is much worse than the worst for Government. [Govt loses its future income from me; I

lose my life!, or my share of that income ....]


Final Thoughts

[- 56]


In pure co-ordination, we are indifferent between the mutually beneficial alternatives:


x y

x 1, 1 0, 0


y 0, 0 1, 1


Final Thoughts

[- 57]

“Battle of the Sexes”: Alice and Bob love each other but have different tastes. Each prefers going out with the other; but she prefers the ballet, he prefers hockey.

In this game, they are NOT indifferent between the mutually preferable alternatives:


x y

x 1, 2 4, 3


y 3, 4 2, 1


Final Thoughts

[- 58]

Constitutions tend to be Battle-of-Sexes: all prefer some stable governing arrangement to none; but some would rather have this arrangement, while others prefer that arrangement.

A good deal of competitive struggle goes into determining which arrangements we’ll have!

One-on-one problems tend more to be Prisoner’s Dilemma.

With those, it’s easy to see which side “the public” should prefer: cooperation (keeping your agreements, e.g.)


Final Thoughts

[- 59]

  • Questions:

  • [what does ‘and democratic’ do to this??

  • The limits are to be “reasonable”. What makes them so? What constitutes “demonstrated justification” in a “free and democratic” society? Can a society be both free and democratic?]

  • note section 33. (1) Parliament or the legislature of a province may expressly declare in an Act of Parliament or of the legislature, as the case may be, that the Act or a provision thereof shall operate notwithstanding a provision included in section 2 or sections 7 to 15 of this Charter.


Final Thoughts

[- 60]

  • Questions:

  • [what does ‘and democratic’ do to this??

  • The limits are to be “reasonable”. What makes them so? What constitutes “demonstrated justification” in a “free and democratic” society? Can a society be both free and democratic?]

  • note section 33. (1) Parliament or the legislature of a province may expressly declare in an Act of Parliament or of the legislature, as the case may be, that the Act or a provision thereof shall operate notwithstanding a provision included in section 2 or sections 7 to 15 of this Charter.


Final Thoughts

[- 61]

  • From the Canadian Charter of Rights and Freedoms

  • Whereas Canada is founded upon principles that recognize the supremacy of God and the rule of law:

  • 1. The Canadian Charter of Rights and Freedoms

  • “guarantees the rights and freedoms set out in it subject only to

  • such reasonable limits

  • prescribed by law as can be

  • demonstrably justified

  • in a free

  • and democratic society.

  • 2. Everyone has the following fundamental freedoms:

  • (a) freedom of conscience and religion;

  • (b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

  • (c) freedom of peaceful assembly; and

  • (d) freedom of association.

  • Questions:

  • [what does ‘and democratic’ do to this??

  • The limits are to be “reasonable”. What makes them so? What constitutes “demonstrated justification” in a “free and democratic” society? Can a society be both free and democratic?]

  • note section 33. (1) Parliament or the legislature of a province may expressly declare in an Act of Parliament or of the legislature, as the case may be, that the Act or a provision thereof shall operate notwithstanding a provision included in section 2 or sections 7 to 15 of this Charter.


Final Thoughts

[- 62]

  • Rights and democracy:

  • The function of rights is to limit the operation of majority rule.

  • My right to

  • life

  • association

  • religion

  • lifestyle

  • is not to be subject to majority rule.

  • [Trudeau: “The State has no business in the bedrooms of the nations”

  • He means that a majority has no business telling people how to run their sex lives...]

  • So if the Charter of Rights means, by section 1, that we have whatever rights a majority allows us,

  • then that is equivalent to having no rights.


Final Thoughts

[- 63]

  • Rights and democracy:

  • Note on the Right to Vote:

  • Should a majority be able to decide that somebody is to be denied the right to vote?

  • No, of course.

  • For we won’t have what we meant by “democracy” for long if a majority can disenfranchise a minority.

  • [Think about it: 51% disenfrances the 49%

  • Then 51% of the new smaller electorate disenfranchises the new 49%

  • etc. ....!]


Final Thoughts

[- 64]

  • 2. Everyone has the following fundamental freedoms:

  • (a) freedom of conscience and religion;

  • (b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

  • (c) freedom of peaceful assembly; and

  • (d) freedom of association.

  • 15. (1) Every individual is equal before and under the law and has the right

  • to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

  • (2) Subsection (1) does not preclude any law, program or activity that

  • has as its object the amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.

  • [Q: is (15.1) consistent with (15.2)? Is (15) as a whole consistent with (2)?

  • - and, who decides whether they are “disadvantaged” - and at what??]


Final Thoughts

[- 65]

  • The American Bill of Rights

  • “The Constitution of the United States of America - Preamble:

  • We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.”

  • Its language is forthright:

  • 1. Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

  • [and several others:

  • 2. A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

  • 3. No soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time of war, but in a manner to be prescribed by law.

  • 4. The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.


Final Thoughts

[- 66]

  • The American Bill of Rights

  • 5. No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger;

  • nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb;

  • nor shall be compelled in any criminal case to be a witness against himself,

  • nor be deprived of life, liberty, or property, without due process of law;

  • nor shall private property be taken for public use, without just compensation.

  • 6. In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

  • 7. In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

  • 8. Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted. ...

  • Question: can institutions be effectively constrained by a constitution?

  • Short answer: No!

  • What it requires in the end is community support -

  • and a plausible set of machinery for interpreting and defending its provisions ...

  • And that requires understanding and good institutions.

  • Not easy to come by!

  • Good luck ....


Final Thoughts

[- 67]

  • The American Bill of Rights

  • 15. Section 1. The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any state on account of race, color, or previous condition of servitude.

  • Section 2. The Congress shall have power to enforce this article by appropriate legislation. [1870]

  • 16. The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.

  • 18. Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited. ... [1919]

  • 21. Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed. ...[1933]

  • 19. The right of citizens of the United States to voteshall not be denied or abridged by the United States or by any state on account of sex. [1920]

  • Congress shall have power to enforce this article by appropriate legislation.


Final Thoughts

[- 68]

  • General point:

  • designing a good constitution is difficult!

  • Login