Tag: Contractarianism

Strict contractarianism or anarchist conventionalism

The June 2011 issue of Economic Affairs features my review of Anthony de Jasay’s most recent collection of articles, Political Philosophy, Clearly: Essays on Freedom and Fairness, Property and Equalities.

As in all his works, in this book Anthony de Jasay uses a non-cognitivist knife to cut through all the incoherent, but influential, arguments about “fairness,” “rights,” and “the public good” that have been offered as a rationale for government.

As I note in my review, in this collection Jasay also offers his analysis of the State’s monopoly on the use of “legitimate force”, the taboo on “taking the law into one’s own hands” and its effects on crime. His analysis has similarities to what the paleo-conservative writer Samuel Francis has called “anarcho-tyranny”, a situation in which rules against violence, theft and vandalism are poorly enforced (or even deliberately ignored) but the coercive power of the state is used to engineer an egalitarian society and suppress freedom of speech.  Before Francis, these tendencies in modern liberalism were identified in James Burnham’s ‘Suicide of the West: An Essay on the Meaning and Destiny of Liberalism.

Until recently, I had a difficult time understanding Anthony de Jasay’s arguments against moral contractarianism. It seemed to me that Jasay could only conceive of contractarian arguments as arguments in favor of collective choice, ignoring thinkers such as the individualist anarchist Benjamin Tucker and, more recently, Jan Narveson, who use a contractarian framework to argue against the state. But upon more closely inspecting Jasay’s (increasingly) Humean ideas on justice I think I have a better understanding of what his fundamental objections against the contractarian approach are.

An important key to his objections can be found in the following quote from his book The State:

People who live in states have as a rule never experienced the state of nature and vice-versa, and have no practical possibility of moving from the one to the other … On what grounds, then, do people form hypotheses about the relative merits of state and state of nature? …

Anthony de Jasay’s starting point in social philosophy are the spontaneously evolved rules that facilitate mutual benefit. These rules were not “established” through a one-time agreement but through an incremental process of mutual adjustment by individuals. A danger of all forms of moral contractarianism is that it shifts the locus from such spontaneously evolved rules to subjective and arbitrary debates about what the terms of hypothetical contracts should be. For example, if we cannot agree to the terms of a social contract because some participants want a more interventionist state, should the social contract exercise be considered a failure or can the parties that want the least government interference just proceed and consider that person “outside” of the social contract? It is hard to imagine how such a question can be answered in a satisfactory manner from within the contractarian framework without introducing some kind of meta-contractarian framework, which in turn… and so forth.

The philosopher David Gauthier has argued that agreements that do not satisfy certain conditions (his revised Lockean Proviso) might be unstable because some people will have a strong incentive to ignore or re-negotiate them. It is quite conceivable that social contracts that do not reflect mutual advantage are inherently unstable and will be pulled towards less government, but ultimately such questions about stability can only be answered empirically.

In light of Jasay’s preference for actual contracts, as opposed to hypothetical contracts, I have often been tempted to call Jasay’s position “strict contractarianism” or “strong contractarianism.” Obviously, strict contractarianism is inherently anarchist because there is no way that any government can be considered to be “agreed to” by all the parties (and their descendants) who are presumed to be obliged to it, either explicitly or tacitly. Is the difference between strict contractarianism and conventionalism just semantics then? There is an important element in Jasay’s thinking that cannot be incorporated by any kind of contractarian thinking, and that is his refusal to place himself outside of society (or in the “state of nature”) in an effort to determine what the ideal terms of social interaction should be. It might seem strange to present this as a virtue but it would not surprise me that it is exactly this attitude that gives rise to what we would call a free society.

The ethics of debt default

One of James Buchanan’s most interesting papers is The Ethics of Debt Default (1987), first published in the book Deficits (a collection of public choice articles about public debt and debt financing), edited by James M. Buchanan, Charles Kershaw Rowley, Robert D. Tollison and reprinted in James Buchanan’s Collected Works, Volume 14.

As an individualist contractarian, Buchanan rejects the argument that we have a moral obligation to honor debt obligations that the government has created simply because the modern state is a ‘moral unit’ in the sense of an extended family. He has more sympathy for the conservative argument that government should not default on its debt because we all benefit from a government that honors its commitments. However, Buchanan notes that on a less abstract level of discussion “a collective decision to repudiate the debt need not, in itself, pull down the whole legal-political house of cards, especially if it is accompanied by a change in the rules designed to insure against recurrence of the necessity for repudiation.” As a contractarian, Buchanan can only endorse borrowing  to finance “genuine public capital investments” that also yield benefits to future taxpayers. After all, it would not be fair if the taxpayers that authorized public investments would have to assume the complete burden of the costs when future generations benefit from those investments, too. The situation is different in the case of ordinary public consumption expenses, which mostly accrue to the existing  generation and that push the tax burden to future generations.

In favor of the argument that there is not a persuasive moral argument against debt default in the case of debt-financed ordinary consumption he employs a Rawlsian argument that should persuade modern liberals and progressives as well. Behind a veil of ignorance where people will not know their generational position it would not be rational to endorse debt financing for the sole aim of favoring one generation over another. Or, as Buchanan puts it in welfare economics terms, “there is no multi-period Parato-superior move that can describe a shift to a regime of debt-financed public consumption.” Buchanan even characterizes debt financing for ordinary public consumption “immoral” by such contractarian criteria.

He also discusses the possibility that the risk premium for government bonds (which, in parallel with private borrowing, should be higher for consumption expenditures) attenuates the moral significance of defaulting on the debt. After all, the voluntary payment of the risk premium implies the recognition of the bond holders that such loans may not be paid back.

Buchanan’s contraction framework only allows for a moral obligation to honor debt that was issued for public investment and income-yielding assets. Incidentally, since a significant portion of debt-financing concerns ordinary consumption and special interests, the argument that Buchanan puts forward in this article could also support voting against raising the debt ceiling of the US government.

One could argue that Buchanan’s limited support of honoring debt payments rests on two controversial premisses about public goods and the binding force of hypothetical contracts.

(1) Buchanan’s argument only works if a social contract to produce public goods is necessitated by suboptimal production of public goods in “the state of nature.” But as Anthony de Jasay has so eloquently written, “People who live in states have as a rule never experienced the state of nature and vice versa, and have no practical possibility of moving from the one to the other. It is often a historical anachronism and an anthropological absurdity to suppose such movement. On what grounds, then, do people form hypotheses about the relative merits of state and state of nature?” Furthermore, a Rawlsian contractarian framework cannot apriori assume government production of public goods instead of some variant of ordered anarchy where redistribution is achieved by limiting property rights.

(2) Arguments that derive the legitimacy of  public institutions from hypothetical contracts are intrinsically unfalsifiable. Removing personal, circumstantial and generational elements from the contractarian framework may strengthen “fairness” but at the cost of reducing the possibility to arrive at objective and unambiguous results. As a consequence, hypothetical contractarianism in practice collapses into a situation of a government of experts claiming to know the alleged substance of such agreements, and citizens (understandably) objecting to the contents and terms of these “contracts.”

An alternative approach would be to only honor actual contracts. Such contracts may not be as “impartial” as hypothetical contracts but they have the distinct advantage of permitting objective verification and incorporating evolved conventions concerning person and property. It is doubtful, however, that such a strict contractarian framework can be reconciled with an obligation of all individuals to pay taxes to  “the government” to honor the debt obligations that it made. Moreover, many individuals (or groups of individuals) will have both self-interested and moral reasons to seek default on such debts.

There is therefore no persuasive moral argument why individuals are generally obliged to honor any kind of government debt. Buchanan recognizes that defaulting on the debt may close off prospects for further government financing through borrowing. But to those who believe that government lacks legitimacy, and is a dangerous imposition on the human race, that should be an additional argument in favor of debt default. Defaulting on the debt might also restore the balance of power between generations and provide an incentive to transition to less debt-driven (ans thus more robust) forms of economic interaction.

Arguments that claim that seeking repudiation of the debt will blow up the political and financial system, and produce a net-loss for all, rest on the unrealistic assumption that such views will have absolute instantaneous effects. In reality, it is more likely that as the arguments for debt repudiation will be gradually embraced, financial markets and government operations will gradually adjust as reflected by increased risk premiums and less emphasis on debt-financing of government operations.

Anthony de Jasay on liberalism, democracy and conventions

Despite losing his eyesight, Anthony de Jasay still publishes some of the most thought-provoking papers in social philosophy. In a recent article for the Institute of Economic  Affairs, de Jasay inspects the foundations of liberalism and observes that:

In contrast to made law whose legitimacy is ultimately hypothetical, vulnerable to logic and cannot be confirmed, rules that arise spontaneously have the great strength of being immune to problems of legitimacy…The liberal principle of ownership is neither derived from nor enforced by any authority. Its content is a set of liberties the owner may employ, notably the liberty of use, usufruct, contract and disposition.

Building on these Humean concepts of justice, de Jasay is clear that liberalism, properly conceived, is not compatible with government and political democracy:

The term ‘liberal democracy’ has in recent decades become the standard way to refer to the liberal form of government. The first principles of liberalism are fully compatible only with ordered anarchy, a spontaneously emerging framework of conventional rules. Even imperfectly liberal orders are biased towards small government. Democracy has historically been associated with a dynamic, expansionary area of collective choice, in the shape of big government. Coupling ‘liberal’ and ‘democracy’ could hardly be more incongruous than ‘smallbig government’….Whether by conviction or by dire need, democratic governments are condemned by political competition constantly to press against the frontier that divides individual from collective choices. They must willy-nilly swallow up and regurgitate a part of the resources produced by society, a part large enough to attract a winning coalition in the face of competition by rivals similarly seeking to form a winning coalition.

In his recent publications de Jasay more explicitly contrasts the role of conventions with government-made law and contractarian approaches to justice. In one of his strongest essays to date, “Fairness as Justice,” he critically reviews game theorist Ken Binmore’s book Natural Justice and highlights the difference between bargaining and conventions and its consequences for the doctrine of fairness:

While bargaining solutions presuppose an intent to agree, conventions are adhered to without anybody agreeing with anybody else. Nobody intends to initiate them. They may be imagined to start from some random bunching of behaviour into a patterned subset within a patternless set of behaviour of the population…Justice in compliance with spontaneously emerging self-enforcing rules supersedes unenforced considerations of fairness; it does all the work in its sphere and leaves none over for fairness.

“Fairness as Justice” is included in Anthony de Jasay’s most recent collection of essays, Political Philosophy Clearly: Essays On Freedom And Fairness, Property And Equalities.

Thomas Ligotti, Karl Popper and antinatalism

In his recently published non-fiction work The Conspiracy Against the Human Race: A Contrivance of Horror the contemporary horror writer Thomas Ligotti takes Karl Popper’s “negative utilitarianism” to its ultimate conclusion:

One who did not balk entirely was the Austrian-born British philosopher Karl Popper, who in The Open Society and Its Enemies (1945) did have a thing or two to say about human suffering. Briefly, he revamped the Utilitarianism of the nineteenth-century British philosopher John Stuart Mill, who wrote: “Actions are right in proportion as they tend to promote happiness, wrong as they tend to promote the reverse of happiness.” Popper remolded this summation of a positive utilitarianism into a negative utilitarianism whose position he handily stated as follows: “It adds to clarity in the fields of ethics, if we formulate our demands negatively, i.e. if we demand the elimination of suffering rather than the promotion of happiness.” Taken to its logical and most humanitarian conclusion, Popper’s demand can have as its only end the elimination of those who now suffer as well as “counterfactual” beings who will suffer if they are born. What else could the “elimination of suffering” mean if not is total abolition, and ours? Naturally, Popper held his horses well before suggesting that to eliminate suffering would demand that we as a species be eliminated. But as R.N. Smart famously argued (Mind, 1958), this is the only conclusion to be drawn from Negative Utilitarianism. (p.73)

It is not likely that Popper would have agreed with such an antinatalist interpretation of his work but we should not be surprised about it. Such unintended consequences are basically implied in ethical views that seek to maximize a value or state of affairs for humanity as a whole. It inevitably leads to a teleological concept of society and tortuous attempts to construct some kind of optimal social welfare function where the suffering of one person is weighed against the suffering of another person. Not surprisingly, Popper followed his ethical views with his idea of “piecemeal social engineering” to generate a “social technology” to improve the world.

An alternative to Popper’s “negative utilitarianism” and “piecemeal social engineering” would be to think about ethics  and politics “from the ground up” as Thomas Hobbes attempted:

Hobbes’s contemporaries understood politics as something descended from the ages or the heavens, but Hobbes built politics from the ground up. Self-interested individuals, craving protection for their lives, contracted to create sovereign states.

In this view morality is not the imposition of a set of values that a particular person happens to like but a mechanism to coordinate activity between humans. Contemporary Hobbesian philosophers like David Gauthier and Jan Narveson do not seem to agree with Hobbes about the necessity of Big Government (or in the case of Narveson, the need for Government at all) but Hobbes’ secular conception of morality as mutual advantage remains intact.

Thomas Hobbes was considered an atheist and reductionist by his enemies:

Hobbes’s snide irreligion, once the main complaint against him, may now commend him to those who perpetually fear the supposed return of theocracy. His tendency to portray humans as appetitive beasts flatters our present eagerness to explain every aspect of human conduct in biological terms. Hobbes was also acutely suspicious of democracy. He considered it a breeder of faction

In light of Ligotti’s book it should also be noted that Thomas Hobbes was  a determinist (albeit not a “hard determinist”). As such, the Hobbesian enterprise can also be conceived as a project to explain how social norms emerge and change.

As for suffering, most people do not think that a life that includes suffering is not worth continuing, or creating, but look at  other interests and the quality of life as a whole as well. As antinatalists like David Benatar have argued, quality of life is not just a simple matter of subtracting (expected) negative things in life from (expected) positive things in life. But such an argument can be developed in both a pessimist and an optimist direction – two possibilities that do not receive equal treatment in Benatar’s work.

Anything that’s peaceful

Libertarians spend a non-trivial amount of time arguing for the obvious. At best, such arguments are redundant because there is no widespread believe that violence or threats of violence are a good thing. At worst, these debates hurt the prospects for a society with less violence because theories about the existence of  “natural rights” are rightly a source of  ridicule. The idea that “rights” just exist out there in the world without actual individuals engaging in contracts to establish rights is not going to persuade anyone with a sober mind.  In that sense, Ayn Rand, Murray Rothbard and the (early) Robert Nozick did not do the renaissance of classical liberalism a favor.

A similar problem is encountered with terms like “liberty” and “freedom.” There have been extensive debates about the meaning of liberty as if there is a God-given “real” meaning of the word that just lies out there waiting to be discovered. Many libertarians would argue that we should seek a free society. But as Anthony de Jasay has noted, “The question of whether freedom is valuable or a free society is good ought not to enter at all into a properly thought-out political doctrine, liberal or other. It should be resolutely ignored. Whichever way the question were answered would, it seems to me, inevitably steer us in a teleological direction, and undermine the foundations on which the society that we could consider free might stand and survive. ”

“Consequentialist” libertarians have rejected the emphasis of “moralist” libertarians on (absolute) rights and liberty and have argued for evaluating public policies in light of their consequences. Liberty founder R.W. Bradford (1947-2005) repeatedly held the moralist libertarians responsible for the poor acceptance of libertarianism.  But it is hard to see why conventional consequentialist libertarianism would do much better. Most people do not come into this world seeking to optimize some kind of social welfare function or overall efficiency. In this sense consequentialist libertarianism is even further removed from reality – a point that has been well recognized by former utilitarians like Jan Narveson.

A small minority of libertarians have hopes of reconciling egoism and libertarianism. These authors often spend considerable time making the case for ethical egoism. For people who tend to look at such questions from the perspective of empiricism and modern science such investigations are rather excessive. The interesting question is not so much whether there are objective moral truths but what happens when people who have left such beliefs behind interact.  This question can be approached from a Hobbesian perspective or from an evolutionary perspective. But what often is discovered is a general desire to discourage and prohibit violence.

It is not likely that Ayn Rand and Murray Rothbard will be remembered for their breakthroughs in moral philosophy but what these authors have in common is their identification of classical liberalism with non-aggression. This re-conceptualization of classical liberalism has been an important breakthrough because it enables to see things like “regulation” and “public policy” in fairly non-ambiguous physical terms. If one strips away all the rhetoric about “rights” and “democracy” one is left with a State that mostly engages in violence and threats of violence against peaceful people. One of the major contributions of modern libertarians has been to show this is the case – even when the State only claims a  “monopoly on violence” to solve public goods problems.

Contra libertarians such as R.W. Bradford, the desire for peace is neither outdated nor ineffective. People may differ on the importance of “negative” or “positive” liberty or growing “the economy” but few people go out in public  speaking out in favor of violence against the innocent. The main task of libertarians is not to look for “justifications” or “foundations” but the demystifying of the State and the defense of anything that’s peaceful.