A major issue at the confluence of economics, political science, and political philosophy is, What is morally or economically better, the state (formal and centralized coercive authority), anarchy, or something in between? Ignorance of this question, which parallels the alternative between collective choices and individual choices, mars most political debates.
In 1941, progressive economist Irving Fisher said before the Yale Socialist Club (quoted in Mark Thorton, The Economics of Prohibition [University of Utah Press, 1991], p. 17):
I believe [William Graham Sumner] was one of the greatest professor we ever had at Yale, but I have drawn far away from his point of view, that of the old laissez faire doctrine. I remember he said in his classroom: “Gentlemen, the time is coming when there will be two great classes, Socialists, and Anarchists. The Anarchists want the government to be nothing, and the Socialists want government to be everything. There can be no greater contrast. Well, the time will come when there will be only these two great parties, the Anarchists representing the laissez faire doctrine and the Socialists representing the extreme view on the other side, and when that time comes I am an Anarchist.” That amused his class very much, for he was as far from a revolutionary as you could expect.
Fisher immediately added:
But I would like to say that if that time comes when there are two great parties, Anarchists and Socialists, then I am a Socialist
The question is of course which regime would be better for all or most people—in terms of their own preferences, a liberal economist would add. This question reduces to what kind of absolute state and what kind of anarchy would obtain and how each system would actually work, which are largely economic questions. Hobbesian anarchy (“the war of all against all”) and totalitarian government have little in their favor. Between good anarchy and “good” totalitarianism, Sumner was obviously right.
We may wonder where between the two ideal extremes lies the best practical state. This raises the question of whether any mixed regime is dynamically stable and, if not, towards which extreme and how close it will tend to lead society. One can (try to) evaluate any such intermediate position on Fisherian or Sumnerian criteria, that is, according to whether it gets closer to absolute government or to anarchy. The classical liberal tradition favors a position “between anarchy and Leviathan,” to use the subtitle of a book by James Buchanan, but certainly closer to anarchy than to absolute government. One of the anarchist theorists who believe that all intermediate positions lead to absolute government was Anthony de Jasay, a must-read author for anybody interested in these issues, which have a bearing on practical politics (trigger warning: some economics is necessary).
READER COMMENTS
Jon Murphy
Jan 18 2021 at 7:59am
Mises was also one who believed that a mixed economy must ultimately tend toward one extreme or the other (I do not believe he says it anywhere, but I think Mises would be aligned with de Jasay in arguing it likely leads to totalitarianism).
But I think, following in the footsteps of Sandy Ikeda, that a mixed economy is a generally stable equilibrium (see his 1997 book Dynamics of the Mixed Economy). Of course, that is not to say there are not forces that could push things toward more totalitarianism or more laissez-faire. Rather, I think they tend to cancel each other out (more or less).
David Henderson
Jan 18 2021 at 9:08am
Thanks, Jon.
I hadn’t realized that Sandy had made that point.
A few years ago, at the annual Mises birthday celebration in San Jose, an event hosted by Patrick Peterson, Jeff Hummel gave the annual talk. He made the same point about the welfare state being a relatively stable equilibrium.
Jose Pablo
Jan 22 2021 at 8:50am
Where can you see this? … I mean looking at data.
The budget of the welfare states and the number of pages of regulation have increased steadily and keep doing so.
Is that what you call a “stable equilibrium”? Is that because the budget and the amount of regulation increases at a “stable pace”?
Well, in fact, it is more like they are increasing their increasing rates at a stable pace … but I would not use “stable equilibrium” to describe a steady increase in the increasing rate of a variable. By the same token you can also say that the space rockets raise from Earth in a “stable equilibrium” mode.
Pierre Lemieux
Jan 18 2021 at 11:04am
Jon and David: You are right that the question of the stability of the equilibrium is important. It applies to the sort of Humean anarchy that de Jasay defends. If I may quote my Econlib review of de Jasay’s masterpiece:
De Jasay himself had doubts about the stability of anarchy against the threat of foreign states or of a potential domestic state. Yet, he suggested in his last book, Social Justice and the Indian Rope Trick, that danger is not “an incontrovertible corollary of the human condition.”
Andrea Maya
Jan 18 2021 at 11:42am
Pierre, Thanks for pointing me (again) in the direction of De Jasay. I am woefully uninformed about his writings. I will remedy that.
David Henderson, how does one get on the guest list for that Moses birthday celebration? I’ll bring bubbles in a bottle! Prost!
Andrea Mays
Jan 18 2021 at 11:43am
If only I could spell my own name correctly.
Mark Brady
Jan 18 2021 at 7:15pm
Mises not Moses (of course)! Contact Patrick Peterson, Chief Networker at Silicon Valley Freedom Project.
Jon Murphy
Jan 18 2021 at 7:35pm
That said, if Moses invites you to a pool party, don’t go. He likes to part the water just as people jump off the diving board.
Jose Pablo
Jan 22 2021 at 8:36am
But, on the other hand, he is extremely well connected and has a proven track-record in leadership and negotiating international deals (although it is true that from a pretty unfair bargaining position).
Your professional network will also improve substantially if you get Moses to friend you on Facebook and LinkedIn.
Craig
Jan 18 2021 at 3:11pm
“We may wonder where between the two ideal extremes lies the best practical state.”
I would suggest that might change depending on the totality of the circumstances.
In late 19th century while the boroughs of NYC were co solidarity to form the 5 borough NYC we know today, the municipalities of Morris County, NJ were splintering into smaller more decentralized municipalities. Which way was best? Perhaps both were a decent plan based on differing circumstances in two regions that, while geographically close, still had many differences.
Pierre Lemieux
Jan 18 2021 at 5:30pm
Craig: Yes, probably. But the danger of Leviathan must be a large part of the “totality of circumstances.” As Hayek warned, expediency is often the road to hell.
Craig
Jan 18 2021 at 9:40pm
Where is Cincinattus when you need him?
Pierre Lemieux
Jan 19 2021 at 11:36am
Craig: For one Cincinnatus in the history of mankind, there have been 1000 Neros and not a few little Trumps. A lesson of (classical) liberalism: Don’t build political ideals on Cincinnati; play minimax.
Roger McKinney
Jan 19 2021 at 7:16pm
Thr work of Douglass North I think shows that thr most robust form of government through history and today is authoritarianism. A nobility keeps a king, Caesar, or other dictator in power on exchange for the provilege of looting the masses with impunity.
Helmut Schoeck explains why in Envy: A Theory of Social Behavior. The masses are consumed with envy. The looting by the nobility keeps the masses relatively equal in wealth.
Henri Hein
Jan 20 2021 at 3:26am
You have convinced me to add Anthony de Jasay to my reading list.
It is interesting to juxtapose the common critiques of the two extremes. The most pessimistic descriptions of Totalitarianism tend to be accurate. On the other hand, though we have only a few historical examples of Anarchy, or near-Anarchy, they are a far cry from how the critics of Anarchy describe it.
Pierre Lemieux
Jan 20 2021 at 11:57am
Henri: I think you won’t be disappointed by de Jasay. On the other hand, the problem is whether Humean anarchy is not too orderly, whether it can create a modern, abstract, prosperous order (à la Hayek). I say a word about this in my Regulation review of de Jasay’s Social Justice and the Indian Rope Trick.
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