Thoughts from a left Hayekian

by Liberty and Power

I took the libertarian test mentioned on this blog a couple of weeks ago, and scored in the mid-50s, a score that still counted as libertarian, but was far below many reported in this blog. The major reason for my middling performance might be of interest to readers.

Many of the questions gave us a choice between two alternatives: favoring private business or favoring government. In my opinion this is a philosophical and practical error, and perpetuates a false dichotomy that deeply impoverishes liberal (in the broad sense) thought.

Government and markets are two institutional means for pursuing policies, but they are not the only such means. Markets are particularly successful at serving consumers, but are not necessarily equally able to serve other legitimate values. We are all consumers, but we are all more than consumers. To see why consider the following example, adapted from a point Mark Sagoff made in his book The Economy of the Earth. In my environmental politics class I always ask my students the following hypothetical:

Suppose a toll highway existed along the Cascade mountain crest in Washington. It runs from the Canadian border to the Columbia Gorge. It is one of the most scenic highways in the world, with beautiful overviews, access to high country trailheads, and good restaurants. How many would pay the toll to drive the highway? Virtually all my students, as well as I myself, answer “yes.”

I then ask my students how many think the highway should be built. In three years only one (a follower of Ayn Rand) said it should. The opposition was usually unanimous. I agreed.

The first choice was that of a consumer. Given existing choices, what would I do? But that situation does not adequately reflect people’s preferences. In the case of this highway it is logically possible to imagine a profitable toll road driven (except for the Objectivist) by people 100% of whom wished it didn’t exist.

Demonstrated preferences are contextual.

If transaction costs were zero, the highway would never have been built because the very people paying to drive it and make it profitable may well have been willing to pay even more to save the area from a road. But transactions costs are not zero, and are not equally distributed with respect to serving all possible voluntary values.

Transactions regarding public values – values which to be realized for some need to be realized for all or for a great number – are generally higher than for consumer values within a market context. It is easier to find a small number of people willing to finance a profitable venture than to find a much larger number of people willing to contribute smaller amounts to pay for keeping that venture from happening. Ironically, the profit for the former group may come from expenditures by the latter, once their wishes for a more favored outcome are thwarted. They actually play a key role in keeping their real preferences on the issue from being fulfilled because of the contexts of choice they face, once we factor in transaction costs.

This is one kind of public value, and public values largely disappear in the libertarian test, except as they are served by government.

But what if government is not much better at serving many public values than it is at serving those of consumers? In that case we might have the following possibility: it is better to have public values served by government than not to have them served at all – but it may be still better to have them served by other institutions better able to do the job.

A major weakness of contemporary liberal theory is that on the libertarian and classical liberal side there is next to no recognition of the importance of public values, and on the more activist government liberal side there is little recognition that these values may be better served through other institutions.

From this perspective we can think of democracy as melding together the coercive institutions needed for law enforcement and defense with some means by which the people in an area can seek to discover and realize whatever public values they may want to pursue. That their efforts are sometimes stymied by the capacity of government to twist these values out of all recognition or subordinate them to the interests of politicians and organized private interests is no argument against the validity and importance of these values.

To the degree this is true, democracies are not so much states as alternative discovery procedures for finding and serving values systematically slighted by the market order. They are not unique. As Hayek recognized, there are many spontaneous orders in society, and they all serve different general values. Hayek would have listed science as another example.

Hopefully these provocative remarks will stimulate some interesting discussions in the week to come.

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Gus diZerega - 4/2/2004

I grant that justice conceived narrowly draws its net more tightly than public values in general - but it is one dimension of them. That is, there is no settled agreement as to what constitutes justice, and likely never will be such, beyond vague slogans. Even within the libertarian sphere there is disagreement.

Justice in practice is always a matter to some extent of persuasion and so is the outcome of discussion about what values we as a community should observe. For such a discussion to carry much weight, it must be open to input by anyone likely to be affected by its details. We are, again, in the realm of people discussing what kinds of values they think should prevail in their society.

Some such values strike at the core of what it is to be a human - such as the issue of slavery. Others could manifest in a variety of possible ways that would be equally just - such as where to draw the line about trespass of sound or photons, speed limits in residential areas, and so on. What makes the decisons just, we would usually grant, are the procedures followed in making the decision rather than somethinmg intrinsic to 30 mph, but not to 31 or 29.

Once we move to a procedural means for making value decisions where justice lies in the procedures and not necessarily in the particular outcome, the line drawn between public values and justrice can get quite blurry. This is of course both a Madisonian and a Hayekian perspective.

Again, my argument is not that the state can do what it wants, or anything close to it, but that a coherent liberal conception of human beings in society (what other kind are there?) needs to include attention to public values as well as to private ones.

Alastair Jardine - 4/2/2004

I don't think the examples of prisoner's rights and the accused poor pertain to public value, they are simply questions of justice. We shouldn't be worried about how many people subscribe to a position, only whether that position is right or not.

What I'm getting at here is that justice isn't touched by numbers, or percentages of a population. The justice problem faced by any society, anarcho-capitalist (AC) or otherwise, is the same. The crucial strength of AC is that it would be broadly homogenous in its principles of non-initiation of force, but hetrogenous in its pursuit of those principles. Strictly homogenous justice principles, as they exist in the United States for example, do not guarantee justice, only homogeniety. Whereas heterogenous pursuit allows independent application of correct standards, as well as wrong ones, but always a choice between them for those not already caught in an injustice.

Gus diZerega - 4/2/2004

Let's look at some examples from within an anarcho-capitalist framework.

First consider private prisons. What limits, if any, should private prison guards have on their ttreatment of inmates? Most of us would argue there should be limits, but the limits would be different than when encountering someone on the street. For example, I cannot justly force you to enter your home whereas we might reasonably assume prison guards can justifiably force an otherwise peaceful prisoner to enter his or her cell. How are these limits decided? I would suggest this is a case of dealing with public values - we wanr the rules to hold broadly for prisoners in order to limit arbitrary caprice or sadism.

It is all well and good to pass the buck to common law and let it decide, but why should we abide by common law? Common law once had no problem with slavery. Was a slave during the times common law supported slavery obligated to abide by it? If not, why? What is there about common law that gives it legitimate authority over others? These are questions that involve public values.

Perhaps the insight is valid that it - or some other system of law - needs to be applicable over a large area to be effective. The bulk of human experience suggests that this is so, especially in societies where human relationships are not structured by caste, status, or hierarchy, so that a common rule applies to both in any given dispute. This would be a public value, and determining how we decide what form(s) of law should prevail is not well suited for action by consumers.

To pick another example, a person is accused of a crime of violence. The accused denies committing the crime. He or she is poor and so has no insurance policy providing legal protection and advice when accused of a crime. On what grounds can this person be justly tried? Anarcho capitalist ideology rooted solely in a philosophy of consumer choice and self-ownership has problems here.

Most decent people would argue that the accused deserve counsel even when unable to afford it. It is quite conceivable that people in a society migfht unanimously agree that there should be some charitable organization providing such services. they then act to create it. They are acting to support a value which they believe their society would be better off for supporting. They are doing so voluntarily. They are acting in terms of citizens (equal members) of a community choosing public values, not as consumers making personal choices.

Dick Cornuelle labeled this kind of action that is neither governmental nor traditional market phenomena the independent sector. It acts to realize public values outside government.

Lastly, if sound waves trespass my body, so that I can sue to enjoin my noisy neighbor to stop his 3am party next door, what about photons? They also trespass. But surely ruling that all unwelcome externalities that involve the trespass of sound or light should be actionable is far too severe a standard. Who decides and on what grounds? Even common law here would probably make us eof community standards, so that late night drumming in an Afro-Brazilian neighborhood would be more tolerable than in a Swedish one.

These seem to me pretty unexceptionable cases, and hardly "collectivist."

Alastair Jardine - 4/2/2004

You state that public values are "values which to be realized for some need to be realized for all or for a great number". I don't dispute that such things exist, but I reject the notion that they necessarily should.

If public value derives its value from the fact that it benefits the group, as opposed to the individual, it is collectivist and should be rejected; there is no value, political or ethical, about a group qua group.

If it's merely a good but can only be gotten from the adherence of a majority, that presents no moral imperative for its introduction, and certainly no reason to violate rights.