The One-Handed Economist

Sic Semper Tyrannis

The ever-engaging Don Boudreaux of Cafe Hayek posted this most interesting tidbit about order, society, and government. I think his most interesting observation comes here:

The very act of framing issues or describing problems as “social” entails thinking of society (usually in the form of a country) as the relevant unit upon which analysis is to be directed – as the relevant unit upon which corrective action is to be taken. Once this step is taken, it’s easy to stumble into the presumption that action must be taken by government, for government is the only institution that claims for itself the authority and the ability to act on society as a whole.

I’ve been in the habit of saying that society doesn’t exist for years, much to the eye-rolling chagrin of my bar buddies. Boudreaux sums up, quite eloquently, the gist at what I mean when I carry on about society not existing.

The most important thing to remember is that decisions are not made in aggregate. Every choice, ever decision, is made by an individual. “Society” doesn’t decide anything, individuals do. Yes, there are trends. And, certainly, depending upon geographical location, time in history, and other exogenous factors different groups will tend to exhibit different trends in decision making and behavior. I think it’s best to think of this as culture, roughly defined as “the choice-making trends and behavioral patterns of a particular group of humans living in some geographical region.” I also think that culture tends to be a little more value-neutral as a construction and to imply bottom-up trends rather than the top-down dictates that people seem all too eager to believe in when “society” gets tossed around.

The second most important thing to remember is that it is impossible to achieve a decent aggregate preference ordering. That fact, to my mind at least, makes talk of society as some sort of decision-making entity even sillier. If there’s no way to achieve a reasonable preference order on a social level without a dictator, the only logical conclusion is that there’s a man (or woman or miscellaneous) behind the curtain pulling the strings. How can there exist a nebulous entity, that functions as a single unit upon which actions can be taken, if it’s quite literally impossible* to achieve the sort of preference ordering needed for that unit to function? In short: it can’t.

And this is why I’m in the habit of saying that society doesn’t exist, that’s a lot quicker than trying to explain the above to people. But, what does that imply for government’s role in the world? If there isn’t a good way to get a sum of what everyone wants, what’s the proper course of action for a system we can all agree needs to exist in one form or another?

Setting aside the problems mentioned above, I think it’s fair to say that imperfect rule by vote is better than rule by dictator. Maybe the voting doesn’t achieve a perfect result, but Hobbes was wrong, there is no benevolent dictatorship, and we’re much better off not even considering it. For evidence of this I submit the 20th Century, if that’s not good enough there’s no persuading you.

So if representative democracy or some variant is obviously the best way to create a government, what on Earth should the government do once it’s there? Knowing that aggregating preferences is tricky, messy business, how does the government decide what do to?

Well, given that there’s no way to get a good aggregate of preferences, and given that acting on “society” is impossible because all decisions are made at the individual level, it seems obvious that the best thing for a government to do is give individuals as much choice over their own lives as possible. If there’s no way to achieve a result that will satisfy everyone, and there’s no way to empanel a government that is a true aggregate of individual preference for candidates, isn’t the only moral (or even sensible) option to allow each individual as much control over his or her own life as possible? The only way to maximize welfare is to maximize choice, and everyone seems to have a problem with some part of this.

Liberals (very generally) want control over markets, and the resources that individuals have at their disposal to satisfy their desires. Often done with good intentions out of some desire for fairness, things like highly progressive taxation, economic regulation, welfare schema, healthcare subsidy, ad infinitum, and fail to realize that in order to control markets you have to control people. The far-leftists (not liberals, by the way, because most people who are truly liberals in the modern sense are reasonable people acting in good faith whose ideas I disagree with), want to control every detail of a person’s economic life, and for some sad reason presume that other freedom could flourish. When the state dictates what you can buy, when you can buy it, and who from, what freedom to you have left to satisfy your desires? At the same time the far left wants to impose restrictions on freedoms like owning guns and speech, further minimizing the choice available. I suppose that everyone would at least be crushed under the oppressive boot-heel of socialism equally…well, except for the folks running the place, they’ll make out like bandits. Wait…they usually end up bandits.

Conservatives (again, very generally) want to control non-economic behavior. Whom you can marry, what you can ingest, what adults are allowed to do with/to one another behind closed doors and in privacy. This is a sort of direct control of behavior, the same sort of imposition but applied to the non-economic. It is in no way different that the Liberal inclination to control market behavior, it’s simply applied to a different area of life. The far-right (same sort of caveat about most Conservatives acting in good faith) wants to control every aspect of a person’s non-economic life, down to what he or she can watch on television, see at the movies, and bring into one’s bedroom.

Interestingly, the far-left crosses over into non-economic regulation with its tendency to demand regulation of speech, and its pernicious ability to define various forms of thought as crimes. The far-right gets involved in economic behavior when it advocates for regulation of media, when it rallies against consenting adults paying money for certain products (usually the sorts of products that involve naked people and fake orgasms). I don’t think the mindset between the two is all that different: they see many behaviors of which they do not approve or would not engage in themselves, and feel that the government should step in and correct society. Taken with the above there’s no reason to pay any attention to these people at all, because their desires clearly minimize choice and cause harm to the welfare of vast swaths of the population. Unfortunately, both get a lot of press time. My personal inclination is that the far-left has made more inroads into the modern “Liberal party” than the far-right has made into the “Conservative party”, but both get more attention than is warranted and more respect than either deserve.

Libertarians fail in that many are crazy. Especially the Libertarian Party. They fell in with the ANSWER crowd, and their 2004 Presidential Candidate thinks that the income tax is optional, and that we should return to the gold standard. He’d legalize all drugs, now today, and immediately undo all trade barriers and subsidies. Sure, I can get behind a few of those ideas, but overall the guy is a nut. Not very pragmatic and not a very good face for the LP. Even philosophical libertarians (like myself) are often not very pragmatic, and we often come across as callous, unfeeling, and weird. Those things might be true, but most really do want to see everyone achieve success and a high standard of living, etc. However, we realize that the government can’t really help with that for the reasons stated above, and that there will always be some who succeed and some who fail.

If the duty of government is essentially to ensure that individuals can make as many choices as possible for themselves, and there isn’t a major party in the US currently advocating getting the government to follow this duty, how do we get there? That is a post for another day when I am smarter.

*It should be noted that some varieties of Condorcet voting can be made to satisfy a weakened version of IIA under the right set of circumstances.

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