Public Choice and The Firm

Some readers may be interested in this little exchange I had with Charles Rowley a few weeks back. Admittedly, I started the commentary with a bit of a snarky entrance, asking how the “Dean of Public Choice” could allow his heart to be captured and uplifted by a politician’s speech(more precisely, the speech of a politician’s wife). However, what followed was civil, and it perhaps sheds some illumination on the methodological differences between “classical liberals” and libertarians.

An important question is why “classical liberals” often seem to have a natural alignment with conservatives? My methodology, which I would deem to be consistent with “classical libertarianism,” finds this alignment to be fatal. But we are given a clue by Rowley’s rejection of the method of “The Firm.” Indeed, Rowley (although he is an admirer of de Jasay and counts him as a good friend) rejects de Jasay’s inclusion within the public choice discipline. Rowley writes:

Jasay’s work is not public choice. Jasay deals with an organic state, not methodological individualism. What would you do if you were the state is his question. There is no such thing as a state. Only a collective of individuals.

I would dispute Rowley’s contention. I think the agency of The Firm is quite real and apparent. Would one likewise say “there is no Microsoft or Google, there is only a collection of individuals?” Indeed, I would submit that the agency of The Firm(as a type of DRO) is a natural consequence of economic rent-seeking. And I would apply this consequence to both political economy and “the free market” by simply adopting the very generic definition of economic rent as “returns in excess of opportunity cost (noting, however, that a legal structure of the firm does not necessarily equal the limited-liability corporation. A DRO can have an arbitrary structure, although a certain degree of verticality and hierarchy is implicit).

In a comment, I outlined a long-winded microeconomic foundation for the Agency of the State. This agency is real. But we can arrive at it via a microeconomic method. As I like to say, I can draw line from Public Choice to de Jasay to the class theory of the French Laissez Faire economists.

Interestingly, in the place of The Firm, Rowley advocated an alternative model of “The Prince,” which is the name I bequeathed to the method that emerges from “The Dictator’s Handbook.” I have not actually the read the book, but it is clear(from reading reviews and Rowley’s comments) that The Prince has universal application–it applies to both institutions of State and Civil Society. So to save “methodological individualism” as a method(almost treating it as an end to be preserved rather than as means), Rowley appears willing to dispense with a compelling insight of liberal social theory: individuals with different interests and ends can nonetheless use reason as a tool to coordinate these interests to mutual advantage.1 This insight simply cannot survive The Prince.

Once again, “classical liberalism” derived from a Public Choice method constrained by the classical liberal bounds regarding the agency of the State is simply not coherent.

1 The Better Angels of our Nature


Obama’s Executive Decision

Lately, I’ve been more or less promoting two ideas on this blog: (1) A Rational Choice Model of the State as The Firm (2) The Firm’s intent to be “market setter” for an internet legal regime. If you subscribe to (1), then (2) follows a logical prediction.

The model of the State as The Firm gives us a form of economic governance that is in competition with the ends of its citizens. This is “the total state,” and it is a first-order liberal violation. The Firm is largely beyond any “democratic accountability.” Indeed, “democracy” is treated as a product by the firm, something that is to be manufactured and churned. We can almost treat the “American Culture War” as the manufacturing plant for churning out American democratic consent. Undoubtedly, that is where it is by and large produced.

The rational choice driving the Firm as a market setter for an internet legal regime is a topic I discussed in some detail in a previous post, “Regulating the Panopticon.” You simply start with the current status quo and observe that “data-analytics” provides the market-setting regime change for the Firm(note: the regime is not the Firm; rather, the regime is the rules of the Political Economy set by the Firm). Finance defined the Chicago-School rules regime of political economy for the past 30 years. Data-analytics will define the new rules regime going forward.1

The rational choice of the Firm gives us a model of the President as CEO. Hence, we shouldn’t be surprised that Obama is contemplating implementing much of the recently filibustered Cybersecurity bill by an executive order. An “Executive Decision,” as the saying goes.

Any outrage of the prospect of a unilateral executive implementation of a national policy with such far-reaching implications mistakenly operates under the presumption that the Presidency is a political office. But it’s not really that. As an office of Political Economy, however, you would find Obama’s statements to be consistent with what you might expect from a CEO. To say that Obama’s Executive Order would violate the constitution is a bit naive. Given the regulatory charge of executive authority bestowed from the wide-range of laws that have passed constitutional mustard, I would say that Obama’s Executive Order most assuredly would not violate it.

And no one is quoting the US Constitution as means to constrain the Firm’s strategy to militarize the internet. The US is actively engaged in repeated, sophisticated cyberattacks to to produce outcomes exactly like this. This is part of an integrated strategy to instigate the very need of a market setter for an internet legal regime.

Political means are more or less powerless to constrain much of the Firm’s actions. The tiny parts that are ostensibly subject to political accountability are a mere formality. My suggestion is to take the laws of political economy seriously. The President of the United States is the CEO of National Security State, Inc, a corporation ultimately chartered by the United States Constitution.

1 Interestingly, a third topic that I’ve intermittently promoted, “The Pink Police State,” perhaps finds its most precise definition within the data-analytics model. The Political Economy of Data-Analytics and Surveillance will not(and simply cannot) produce the traditional capitalist surpluses to support the traditional progressive welfare state. In the classic libertarian perspective(a la, Bastiat), these “transfer payments” are bribes to placate dissent against a political economy of plunder. Of course, the origin of these progressive “transfer payments” is largely labor itself(SS and Medicare, by far the largest components of the “Welfare State,” are labor tax transfers). But the surplus labor base for the continuation of this placating transfer model will shrivel up and wither under a political economy of data-analytics.

The Pink Police State simply replaces the bribe of the progressive transfer model with the bribe of the “libertarian culture” transfer model. The political economy of data-surveillance can bargain “zones of tolerance” and increased “cultural freedom” as means of placation. Of course, these benefits will largely accrue to the “professional classes” and not to those at the margins.
The Pink Police State uses libertarianism to bribe the professional classes.

The Cognitive Dissonance of the Cultural Warriors

Well, this post is quoting me as an example, but the same blogger never really bothered to respond to my 2-month old post that addressed the distinction between the libertarian and communitarian versions of liberty.

Our blogger denies the liberal/libertarian definition of liberty, “do as you want, constrained only the harm to others,” on the grounds that we cannot individually define “harm.” Or to be more accurate, “harm” can only carry an agreed upon social definition. This, of course, is the bromide of the communitarian. And our blogger expresses this communitarian version quite clearly:

The voluntary institutions of society (civil society) inculcate and enforce a society’s moral code (1), foster mutual trust and respect (2), and help to preserve cultural similarity (3)

But notice how our blogger suddenly switches gears with this next post, The Intolerant Left, regarding the liberty of Chick-fil-A to sell chicken sandwiches. In this instance, the left-wing communitarians are making the same social argument against the liberty of Chick-fil-A that our blogger employed against the liberal/libertarian definition of liberty in his preceding post. The exact same argument. But to our blogger, the appeal to “Chicago” or “Boston” values is suddenly a cause for a vitriolic spew of viscous hatred regarding the intolerance of the left. It is quite an entertaining rant:

Left-wingers march in lockstep like wind-up toy soldiers. And all it takes to wind them up is to propose a governmental intervention in social or economic affairs — preferably one that flouts a social tradition that is based on decades and centuries of of experience. Why do leftists have so little respect for the wisdom that accrues in social norms? Because leftism is rooted in two psychological tendencies. One of them is adolescent rebellion, which can persist for decades past adolescence. This explains the left’s hatred of conventional authority figures who (usually) represent conservative (civilizing) values (e.g., parents, police officers, military officers, members of the clergy). The other psychological tendency is the urge to dominate others, an urge that leftists project onto conservatives.

But, to repeat, the left-wing communitarian social appeal is the exact social argument that our conservative blogger employed against my libertarian definition earlier. Of course, in one instance, the social argument is perfectly legitimate and is expression of the ultimate meaning of liberty. In the next instance, the social argument is an expression of social dominance rooted in psychological perversion.

Which is the correct interpretation of the social argument? If there is a “correct interpretation” of the social argument among competing social views, then I would dare say that “the harm principle” can likewise be adjudicated outside of the blanketing constraint of any supposed social context.1

The American political dialogue–the culture war– primarily consists of right-wing and left-wing communitarians accusing one another of being liberal2. But, of course, neither group is. The liberal rejects the social argument in favor an epistemological principle of the presumption of liberty. It is a simple principle: claims of harm can be falsifiable and the constraints against liberty have to be demonstrated. Simple. This is the epistemological bulwark against appeals to the authority of the cop, the military and the church. This is the bulwark against the communitarian presumption of social authority asserted by both the communitarian right and left.

1 Any attempt to establish “the more correct” social view among competing theories would have to rely on a scientific method of falsifying the others

2 The right-wing communitarians accuse the left-wing communitarians as “liberal.” The left-wing communitarians accuse the right-wing communitarians as being “libertarian.”

Free Market Fairness: A Bridge to Nowhere

Recently on Twitter, there was a common topic tweet “Libertarianismin4Words.” Well, I can sum it for you in 10 words, separating the Political from the Social:

Political: “The State is its own Agency”
Social: “Live and let Live”

Libertarianism has two century intellectual history behind it that more or less reduces to those 10 words above. But it’s a history that has engaged only a minority. We are reminded of this by the name of Roderick Long’s online library at the Molinari Institute: “A Heritage of Dissent.”

However, in recent times, particularly in the United States, there have been attempts to reposition libertarianism as a legitimizer of a “proper State.” Certainly, the libertarian-conservative fusionism would qualify. Academically, the rise of the Chicago School most assuredly qualifies. Measured in terms of recognition and public policy influence, one would have to categorically proclaim the program a great success. The Chicago School managed to capture the intellectual and public policy control of the American and International Financial System. For twenty years, Ayn Rand’s greatest disciple lorded over the international system of central banking. The Chicago School refashioned the Bretton Woods Global Agency into the Washington Consensus. Beginning with Jimmy Carter, a program of deregulation took shape that ended with the effective repeal of Glass–Steagall in 1999. Simply put, in terms of economic policy, the Chicago School, representing the “revival” of “classical liberal” economic thought, rose to a position of great if not dominating influence.

But as I write these words today, an examination of the actual regime consequences(you know the thing that actually matters) inform me that this revival, in terms of its policy results, has been an unmitigated disaster. What promised to be a rule of Augustus literally at the drop of the hat revealed itself to be the rule of Caligula. How can an ostensibly classical liberal policy regime result in (1) the greatest banking oligarchy in the history of human civilization (2) the application of political economy applied to the greatest spying apparatus ever assembled in human history, (3) an Executive branch more or less functioning as the CEO and Chairman of the Board for National Security State, Inc., unilaterally having declared itself exempt for any application of law to itself, and in broad daylight–as a demonstration point of its effectiveness as this CEO Agency-resurrected the pre-liberal legal notion of “outlaw.” Poof, like that, out in the open–and not buried secretly and denied publicly–is “due process,” the legal foundation(which in part rests on a presumption of liberty) of liberalism, gone. In short, how can a “classical liberal” economic regime underwrite an evisceration of legal/political due process?

Obviously, the regime consequences of this classical liberal economic program(at least the Chicago School version of it) expose the very serious methodological flaws that underlie it. The source of the flawed method really begins with the 6-word political summary of libertarianism above: “the State is its own Agency.” The Chicago School, particularly the 3rd generation iteration of it(“efficient market hypothesis”), more or less dismissed this agency, or at the very least, seriously underestimated it. So we are now living the consequences of a flawed methodology.

The consequences of the Chicago regime suggest a reexamination of Milton Friedman’s thesis famously espoused in “Capitalism and Freedom.” Capitalism is a necessary condition for liberalism but not a sufficient one. Friedman used the example of fascism to falsify the sufficiency condition of capitalism. But we can now empirically include the Chicago regime as a falsifying example, too. We are now confronted with the possibility that capitalism’s necessity condition is challenged by observable regime falsification(for any given regime Ri). This perhaps serves as a clue that capitalism is not the primary logical condition or proposition in relation to freedom. Instead, our primary condition is really agency. Capitalism, like the State, suffers from an agency problem. A deductive argument that liberalism is a sufficient condition for capitalism relies on an implicit premise concerning capitalism and agency that perhaps is not justified. At the very least, an explicit examination of the relationship between agency and capitalism is in order. In this sense, I would suggest the Friedman Statement:

~C –> ~ L , where C=Capitalism, L=Liberalism

is not really the fundamental statement to prove or falsify. Instead, I would suggest something more along the lines of this sufficiency Statement as the more relevant one:

CM —> Agency, where CM=Capitalism serving moral ends.

Now let us also be specific by what is meant by “Agency.” I would define it, in this context, as means(institutionally speaking) that becomes its own ends. This thus puts it in direct competition with human agency(which we can represent as civil society, market society, etc). This is what is meant by the Statement, the “State is its own Agency.”

This brings us to a John Tomasi’s recent book “Free Market Fairness,” a volume largely intended for an academic/professional audience. Tomasi makes no bones in his objective to have “bleeding heart libertarianism” become the new standard of definition of libertarianism, particularly in the academic community. Libertarianism then is redefined as a bridge between “classical” and “high” liberalism, the bridge itself constructed from the foundation of “Free Market Fairness” as a social justice standard. But in reading through parts of the book–and putting aside all the intricate philosophical composition contained therein–Tomasi’s argument more or less reduces to: (1) an “opportunity society” lies at the heart of political legitimization (2) capitalism/markets serve as the superior means for the “opportunity society.”

Now I suppose one could label Tomasi’s effort as a 2012 version of Friedman’s “Capitalism and Freedom”(published on the 50th anniversary of the latter). However, I think Tomasi’s book may have been more persuasive if it had been published, say, in 1994, at the apex of the Chicago reign. Friedman’s 1962 book presaged the coming era of classical liberal economics. Tomasi’s book, however, comes on the heels of its ruin and presages something quit a bit different.

The first seven paragraphs of this post discussed the problem of capitalism and agency. And to be clear, what is meant by “capitalism and agency” is State Capitalism. Tomasi gives us an offering that poses political legitimacy as the moral ends of markets just time for the inauguration of a particularly un-golden age of State Capitalism. The disconnect between capitalism and political freedom is our current condition. Our age of State Capitalism–intertwined in a million different knots with a political economy of State Security–promises to sever the remaining myth: the relationship between capitalism and opportunity, or the “opportunity society.” To be more precise, we are about to be given an object lesson that there is no logical relationship between Capitalism and Markets. The collapse of this paradigm, of course, is conveniently timed with the maturation of our State Security Apparatus. The reason you have a National Security State, of course, is largely because of a loss of legitimacy. Our era of State Capitalism will be marked by a general decline in popular sentiment regarding legitimacy. But our “bleeding heart libertarians” seek to reposition libertarianism as the legitimizing face of State Capitalism. You know the thing that served to hollow out your political freedom while reneging on its bribe of eternal economic growth. Now that’s quite a historical turn.

The Artificiality of Tomasi’s Model
(i) A straight-forward critique of Tomasi’s model would begin by noting that there isn’t any real reason for unanimity–or a bridge, so to speak–between “classical liberals” and “high liberals” regarding the composition of primary goods(or, in classical liberal language, “property bundle”). The liberal methodology allows for divergences in what the ends of the so-called contract should entail. The “bridge” between the two is in regards to the violations: e.g, the suppression of dissent, the infringement of due process, the forcing of the citizenry to accept one particular moral foundation, the abridgment of free speech, etc.

The Tomasi “Market Research Program” is simply not an important problem in political theory. The actual problem is when you have an Executive Branch unilaterally resurrecting the pre-liberal legal notion of outlaw and not a single pep from our so-called liberal political class. And when you point this out to our “bleeding heart libertarians,” they will point to “markets” as evidence there is no significant abridgment of liberty. The current problem that presents itself is the apparent extinction of the liberal species. In its place we find moral obligation pencil-pushers for the regime.

(ii) John Rawls is overrated as a political philosopher. He managed to divine three rather markedly different versions of normative political obligation. His first version, for which he is primarily known for, was built over the proverbial house of cards. What agents should deduce in the “originalist position” was a major point of dispute within “High Liberalism.” The degree of the thickness of “the veil of ignorance” was another point of major contention within High Liberalism. In short, Rawls couldn’t even win over the “high liberals” which is why he more or less abandoned the “Kantian” foundations of his Theory of Justice in favor of an “overlapping consensus” developed in his second book, “Political Liberalism.” The “overlapping consensus” would form the foundations of the “Public Reason” model. Of course, what Rawls would call Public Reason, I would call “the Culture War.”

In his last book, “Justice of Fairness,” Rawls did another 180. In his first book, the political economy was only a secondary consideration. The economic system, whether,say, Capitalism or Socialism, was an empirical plug-in of sorts. By this I mean the economic system was not part of the normative theory. It was a positive consideration. However, by his third book, the economic system had now become an essential component of his normative theory. His theory of justice now required a type of propertarian democracy. However, I would point out that a propertarian democracy is more or less what we’ve had the past twenty years. In the early to mid 90s the United States enacted welfare reform(the scaling back of welfare capitalism) and pursued the ends of the “ownership society,” particularly in terms of home ownership. We experienced the “classical liberal” version of propertarian democracy. And we now see the agency outcome, the regime consequences(e.g., banking oligarchy), of such a moral end. That’s “strike three” for Rawls.

(iii) The primary criticism of Tomasi remains rooted in his neglect of competing and expropriating agency in political theory. His contention that markets are justified because they serve a moral ends of political legitimization is an anathema to the libertarian tradition. His version of capitalism serving moral ends creates a mile-wide invitation to an agency problem.


In the good ole days, the “classical liberals” made the causal relationship between economic liberty and political liberty a foundational point. These days, with the relationship between Capitalism and political liberty essentially severed, our “bleeding heart libertarians” have stepped in to the void with a subtle shift: it is economic liberty itself, or more accurately the proper set of divinely deduced bundle of economic liberties, that serves the ends of political legitimization. To the extent that this effort succeeds in becoming the new face of “classical liberalism,” it marks the official classic liberal divorce of economic liberty from political liberty. The standard of legitimacy is no longer the liberal legal traditions. It is now simply the degree of “opportunity” afforded by the political economy. The “Market Democracy Research” program is simply an effort to rationalize away the agency problem from political economy.

If you are a political cynic and you take your theory seriously enough, you should expect this type of expropriation. After all, we are now entering the media age of the “western dissident.” The western dissident will mark a species of agents not willing to trade away their political liberties for an economic pot of porridge. We will be in definite need of a morally legitimacy to alienate that type of dissident agency as criminal.

Is Liberty the Mother or Daughter of Order? It Depends on Your Presumption

The target of my criticism in my previous post responded to my critique in an update. Unfortunately, the author, Fritz, chose to close comments so I will publish my rejoinder here. The short of it is that the failure the author accuses me of–not sufficiently researching his true position and thus mischaracterizing it–is the thing he is actually guilty of with respect to criticizing my position. Succinctly stated, the author largely wastes his time with a straw man counter-attack. When I wrote that the definition of liberty is “do what you want, constrained only by the harm to others,” the author assumed that I was a subscriber to some type of moral universality of “platonic forms” before proceeding with a lecture on the distinction between a moral theory and a social theory. All very nice, but he is arguing against archetypes constructed in his own head.

Just as this particular blogger has his litany of posts regarding moral foundations, social theory, etc, I have my mine. If you read them you find that I am more or less a moral non-cognitivist contractarian. I am skeptical of any normative claims of regarding libertarian property rights regimes, etc. I place the primary value on coherence, not purity. Thusly, I separate libertarianism as political critique from a libertarianism as a social theory. I subscribe to the coherent political critique that stems from the 19th century French Liberal class critique(Thierry,Comte,Dunoyer, Say, Bastiat, etc) of political economy. I synthesize this with the methodology of modern rational choice.

And the social theory is indeed a social theory, not a moral one. Non-coercion(NAP) is useless as a basis for a social theory because all social interactions and contractual arrangements are coercive in that they necessarily impose moral constraints on agents as pure maximizers. Instead, I look to the Justice of Mutual Advantage as the foundational basis of the social theory. This is hardly radical in and of itself since liberalism, as a political theory, more or less roots political obligation in a rational JMA calculation. Libertarianism, in positive sense, observes that the State inherently violates the JMA constraint. It thus looks to alternative institutional means as the enforcement mechanism for justice. By justice, in an institutional sense, I mean a regime that is mutually beneficial to everyone(i.e., better off with the regime than without it).

Now since liberalism gives us civil society as natural and the State as artificial, if we subtract the State, we are left only with civil society. Obviously, civil society then has to be the source of governance. If we are actually interested in JMA regimes, then empirical observation has demonstrated that society is where they have to come from–both as the institutional source and the enforcer.

Framing the libertarian position in this manner provides a bit of clarity in regards to the typical claims of a Utopian or a Nirvana Fallacy objection. Is the Nirvana Fallacy the position that JMA regimes can emerge from civil society alone or is the fallacy inherent in the JMA objective itself. Or thirdly, does JMA have to be tempered by other principles of justice? Once we actually define the composition of the so-called Nirvana Fallacy, what the specific “unrealizable alternative” actually is, then we can actually begin to frame a coherent debate.

If the objection is to JMA itself, then the objector essentially repudiates liberalism and its social contract methodology to begin with. This is rooted in a simple moral objection.

If the objection is that JMA regimes cannot emerge from civil society alone, but the objector nonetheless accepts JMA, then the objector is forced to confront the problem that the State is a violator of the JMA constraint.

If the objection is that JMA must be tempered by other principles of Justice, then the objector still nonetheless has to introduce these “tempering justice principles” through the front-door of the social contract, meaning that they have to be (hypothetically) shown not to violate the JMA constraint.

The point: can a clever deconstructionist demonstrate that any deviation from the status quo is guilty of the Nirvana Fallacy. Answer: Yes. Translation: The Nirvana Fallacy can more or less be reduced to “leave well enough alone.”

Frankly, I don’t think “leave well enough alone” is a convincing counter-argument to libertarianism.

Does Order Come From Liberty or Does Liberty Come From Order?

In general, we can distill the essential differences between the libertarian and conservative worldview down to who is the rightful parent in the Liberty vs Order relationship. Is liberty the mother or the daughter of order? This former is the liberal position; the latter is the republican(communitarian) one1. The author here is claiming that not only is the conservative worldview the correct one but that the conservative position is the “true libertarian” one. I consider this an expropriation, and it merited a rebuttal.

Let us re-summarize the blogger’s argument:

(i) Libertarian moral foundations cannot be the foundation for liberty because libertarian moral foundations are artificial mental constructs that sow conflict and strife, not peace and cooperation

(ii) libertarians must respect evolved social norms because the norms have evolved for the purpose of creating the necessary order for cooperation and peace–and this is liberty

(iii) (ii) is given a Hayekian spin

My previous post addressed (ii) and (iii). It didn’t address (i). For starters, I’m the wrong type of libertarian to be a model for (i)–which I gather is supposed to imply morals deduced by means of abstract reasoning. I am more or less a moral non-cognitivist. I do not subscribe to “Natural Rights” nor to the proposition that reason is the source of moral judgements. Reason is a means to secure our moral ends but not source of the ends. So I say, of course, morality is relative; the “value” of moral judgements(“values”) are measured relative to a given moral foundation. A fancy way of stating this is that value judgments V are Statements S that have no truth content.

Now I do subscribe to the “presumption of liberty.” Following Anthony de Jasay, we can say that the “presumption of liberty” is an essential component of logical argument–of constructing an argument–so that an argument for liberty does not necessarily presume a preference for liberty. In this sense, the “presumption of liberty” is not a subjective value judgment.

But to get to the point, there simply is no such thing as “libertarian moral foundations” L. They are shared presumptions, such as the presumption of liberty(if you ascribe to the presumption of innocent before guilty, then you ascribe to it as well…so it’s not just “libertarians”), shared arguments, shared outlooks, but these things do not stem from a single moral foundation L. If we required them to–that everyone share L–then libertarianism would indeed be moral theory and not fit for social application(other than functioning similar to a religious industry).

And the social theory does not require shared moral foundations because JMA is rooted in a strategic calculation regarding cooperation–minimizing the price to be paid to gain the cooperation of others. We empirically verify this everyday with the observation of trade.

So the author’s argument (i) is rejected because the premise is false.

I will re-summarize the argument against (ii). It is flawed both conceptually and empirically. The conceptual flaw is the presupposition of the “order” itself as a static thing or a thing has settled into a final equilibrium. The blogger rejected having his position characterized as a “traditional ought” in terms favoring the order equilibrium. Instead, his claim for this settled thing appealed to its instrumental value regarding the produced consequences of cooperation and peace. The consequences are what he defined as liberty. But this violates the “Presumption of liberty.” The equilibrium is simply an arbitrary stopping point, and a presumption of order(or authority) is placed on any non-approved action disturbing the order. The problem with treating liberty as ends (instead of means) can be aptly demonstrated by Peace and Cooperation operating under a Presumption of Authority. If you click on my link to “The Theory and Practice of Oligarchical Collectivism” and read my brief introductory comments, you see that Orwell was describing a regime whose political and social hierarchy were in eternal equilibrium. This produced the de facto results of peace and cooperation. So, Big Brother would have to be classified as an example of “True Libertarianism.”

The empirical flaw with (ii) is that there is no such thing a single culture or norms C. I’m not merely referring to the different cultures across nations or continents. Any Culture C is composed of embedded subcultures(or counter cultures), each having their own informal set of institutions and norms. The reason I referenced Thaddeus Russell’s work,”A Renegade History of the United States,” is because it directly refuted our blogger’s contention that such things as abortion or homosexuality can only become accepted value norms via the coercive power of the State. Russell’s volume throughly debunks that canard by documenting the cultural norms of a large number of early Americans(the working classes, lower classes and slaves) who did not share the puritan norms. Homosexuality, abortion, interracial sex, drunkenness, leisure were accepted values of these classes. And as Russell chronicles, the governing classes devoted a great deal of concern with forcing these social convention rules regimes to conform with “republican virtues.” The emergent thesis from Russell’s book is that much our social freedoms originated from these alternative social convention regimes. So Russell’s scholarship counts as historical disproof of our blogger’s contention regarding homosexuality and abortion.


The difference between “Liberty is the Mother of Order” and “Liberty is the Daughter of Order” can be cast thusly: (i) the former treats liberty as means and operates according to a presumption of liberty (ii) the latter treats liberty as ends and operates according to a presumption of authority. The first is liberal and libertarian. The second is republican and communitarian. To claim that “true libertarianism” is (a) communitarian and (b) respectful of the presumption of authority is a gross expropriation. Any appeals to some Nirvana fallacy against (i) is rejected as nothing more than a mere Statement that the Status Quo is the final reality.


In anticipation of the blogger Fritz’s objection that his conception of liberty has to count Big Brother within the classification of “true libertarianism,” I will preemptively quote this from his website: “not all social regimes are regimes of liberty. Liberty requires voice — the freedom to dissent — and exit — the freedom to choose one’s neighbors and associates.”

Of course, “exit and voice” in Fritz’s conception are still subject to the presumption of authority. As Fritz himself demonstrates here: Illegal Immigration: A Note to Libertarian Purists

It is anathema to them that the United States exists primarily for the purpose of protecting its citizens and their liberty rights. (Well, it did exist for that purpose originally and for a long time, and it still does to some extent.) Libertarian purists seem to believe that, somehow, defense would be unnecessary and rights would be enforced even if the United States did not exist as a coherent, delimited entity. Good luck with that!

Exit and Voice operate under a presumption of authority that places a burden on the exerciser that the exercise of these “rights” does not disrupt the existence of the State as a coherent, delimited entity. Chuck Schumer would absolutely concur…

1 Please note: liberal and republican refer to the respective political philosophies/traditions and not to partisan politics or parties.

Saving Liberty from the “True Libertarians”

I consider Thaddeus Russell’s “A Renegade History of the United States” to be a particularly important contribution to libertarian scholarship(even though Russell doesn’t explicitly identify as a libertarian). A mere reference to Russell’s work punctures the assumptions implicit in this post that attempts to equate true libertarianism with Burkean conservatism. From the post, “Not Guilty of Libertarian Purism”:

A “true” libertarian respects socially evolved norms because those norms evidence and sustain the mutual trust, respect, forbearance, and voluntary aid that — taken together — foster willing, peaceful coexistence and beneficially cooperative behavior. And what is liberty but willing peaceful coexistence and beneficially cooperative behavior?
If socially evolved norms include the condemnation of abortion (because it involves the murder of a living human being) and the rejection of same-sex “marriage” (because it mocks and undermines the institution through which children are born and raised by an adult of each gender, fate willing), the “true” libertarian will accept those norms as part and parcel of the larger social order — as long as it is a peaceful, voluntary order.

The “pseudo” libertarian — in my observation — will reject those norms because they interfere with the “natural rights” (or some such thing) of the individuals who want to abort fetuses and/or grant same-sex “marriage” the same status as heterosexual marriage. But to reject and reverse norms as fundamental as the condemnation of abortion and same-sex “marriage” is to create strife and distrust, therefore undermining the conditions upon which liberty depends….

The pseudo-libertarian … is afraid to admit that the long evolution of rules of conduct by human beings who must coexist might just be superior to the rules that he would arbitrarily impose, reflecting as they do his “superior” sensibilities. I say “arbitrarily” because pseudo-libertarians have not been notably critical of the judicial impositions that have legalized abortion and same-sex marriage, or of the legislative impositions that have corrupted property rights in the pursuit of “social justice.”

Now as an admirer of both Hayek and de Jasay, I take the idea of the “ordered anarchy of social convention” very seriously. However, this author commits two related fallacies in his equation of his version of Burkean conservatism with libertarianism. The first fallacy is that an evolutionary social convention rules regime is not subject to evolutionary adaptation. We can identify this fallacy then as the argument from tradition. The second fallacy is not so much a logical one as an empirical one: the “tradition” is not the actual tradition.

The empirical fallacy is demonstrated by Russell’s volume. The so-called purported “tradition” was not the actual social convention rules regime. As Russell documents, state actors have devoted a great deal of concern with forcing social convention rules regimes to conform with “republican virtues.” And this fact leads us back to the first fallacy that destroys the “Burkean” claims of conservatives. Indeed, it is this fallacy that prompted Hayek to famously reject conservatism. 1

We can define the Burkean objection as offense to a “rationalist ought” in contrivance against the social convention rules regime. But the converse of this is a “traditional ought” in contrivance against the social convention rules regime. The latter is how Hayek defined conservatism and this is why he rejected it. Our blog author, who plasters Hayek across his his blog, is an expropriator. Hayek’s later identity as a “whig” was a statement of rejecting the claims of both the “rationalist ought” and the “traditionalist ought” against his increasingly evolutionary social framework methodology.

I often rail against conservative pollution of libertarianism. For good reason. It denies liberty while portraying itself as the true heir of liberty. Liberty is simply defined as “do what you want, constrained only by the harm to others.” But there is a faction of those who argue that “do what you want” is in and of itself harmful to others. I count our conservative blogger among the deniers. Quoting his own words(taken from his sidebar):

John Stuart Mill opined that “the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others.” But who determines whether an act is harmful or harmless? Acts deemed harmless by an individual are not harmless if they subvert the societal bonds of trust and self-restraint upon which liberty itself depends.

It is quite a farce that those who deny the essential meaning of liberty to nonetheless claim to be the true libertarians. But is perhaps sadder that these deniers are cast as an example of “the pure libertarian critique” against the claims of “social justice” by the “bleeding heart libertarians.” I’m not sure which is the more egregious violation: our conservative calling the bleeding heart libertarians “left-statists” or the bleeding heart libertarians citing this blogger as an example of the hard-core libertarian argument. Coherence is not the valued currency of argument here.

For the record, and I repeat, the argument against the Bleeding Heart libertarians, the state-sanctioning variety, is demonstrated through their own violations of the liberal method. It is perfectly legitimate to use the liberal method to normatively argue political obligation to a Social Justice Regime. However, use of the liberal method obligates one to a consideration of the termination of political obligation. Specifically, when the regime exhibits the characteristics of a police State, including the Executive Branch’s resurrection of the pre-liberal concept of outlaw, the political obligation fails the rational test. The Bleeding Heart Libertarians cover up their liberal incoherence with endless syllogistic hypotheticals of market violations. Red Herrings. For a liberal, the pre-eminent consideration should be the reform or correction to restore the rational basis for political obligation.

“True Libertarianism” does not reside at the midpoint of a debate between methodologically incoherent conservatives and methodologically incoherent liberals. Of course, there is no such thing as “true libertarianism” to begin with. What is within our grasp is coherent libertarianism to deconstruct the incoherent bullshit….

1 The conservative bloggers blog byline “Gay “marriage”: a tyranny of a minuscule minority” actually demonstrates the tyranny of the “traditionalist ought.” It was the violent protectionist attacks by the State on the counterculture gay social rules regime that prompted the movement to try to incorporate itself into the “regime of republican virtues.”

There is No Moral Obligation to Obey the Regime in Liberalism

I recently watched the documentary “The United States vs John Lennon” which chronicled the US government’s attempt to deport John Lennon in the early 1970s. The ostensible reason behind the deportation proceedings was an obscure marijuana charge against Lennon stemming from his London days. The real reason was his involvement with radical elements of the early 1970s anti-war movement.

Lennon would survive the deportation attempt(in retrospect, of course, he would have lived longer if he had been deported) but the government intimidation permanently ended his flirtation with radical politics. As the documentary made clear, this was an escalation of a pattern of harassment and surveillance that finally dissuaded Lennon from any further involvement with the “left-wing fringe.” The objective was never really to deport him. It was to shut him up.

The documentary featured a wide range of talking heads across the political spectrum, but I was particularly struck by the interview with G. Gordon Liddy. To paraphrase Mr. Liddy, it wasn’t the “free speech” aspect per se that troubled the Nixon cabal, it was the fact that Lennon was saying these things despite the fact he was over here enjoying the benefits of wealth and culture the US Government was providing him. Lennon was free to speak his mind but only in Liverpool.

Of course, Liddy’s remarks perked my antennae. Hmmm, I’ve heard this argument–and its many variations–before. I’m hearing them now coming from the mouth of Chuck Schumer. It’s a type of argument that appeals to moral social obligation to justify a action/policy that is repellent to liberalism. In liberalism, institutions are supposed to serve humans and human ends. However, people like Liddy and Schumer(and pretty much everyone who plays the game of partisan politics) invert this: humans serve institutions and institutional ends.

The typical babble defense of the Liddy-Schumer moral obligation begins with the premise of humans as a “social product.” I won’t dispute the premise, but I will challenge the conclusion of the scope of the social obligation. For starters, much of the component of “social product” is social convention. But who exactly is supposed to be the debt collector for social convention? Frankly, the idea of a debt collector for social convention and custom is silly. If we acknowledge this, then we are left with the more artificial components of the “social product,” meaning the roads, the bridges, the electricity grids, the schools, the legal system, property rights, etc.

Anthony de Jasay in his essay, “Your Dog Owns Your House,” addressed the scope of the social obligation the arises from this artificial social product: the obligations terminate at the point of exchange. Otherwise, you can end up with an absurd moral claim that your dog–because it may serve a capacity as a watch dog, “securing” your property–owns your house. de Jasay’s point was that “society” can only function by operating at the point of exchange; it cannot function by means of “social accounting.” However, de Jasay duly noted that, historically, the liberal moral foundations for property have been weak and susceptible to the moralizing of these “social accounting” arguments.

I would add the oft overlooked asymmetrical nature of the social accounting assumption. So we have our dog who protects your house. The dog comes from the kennel. The kennel owner relies on the roads, the electricity grid, the farmer, the dog food manufacturer, etc. Each one of these points of contact are have their own points of contacts creating our geometrically progressive interrelated web of social dependency. No doubt. However, “accounting” consists of credits and debits. So, if our dog fails to protect the house(as advertised in this recent AllState Commercial) does the liability likewise flow down our interrelated web of social dependency? If the dog is successful as a watch dog, then the homeowner “owes” the kennel owner, the road construction worker, the farmer, the dog food plant worker, and so. But if the dog fails, then do these same agents “owe” the homeowner? Do they share the blame in the failure of the dog?

As absurd as the “social accounting” calculation is regarding the dog-owning the house, I think the absurdity of the moral obligation nonetheless is better illustrated on the liability side. If, say, the farmer shares in the “credit” of the dog’s success, then the farmer likewise must surely share the blame for any failures of the dog. Human moral foundations may be susceptible to the credit side of the social accounting argument, but they generally repel against any responsibility on the liability side.1 As the “AllState” commercial (linked above) illustrates, the failure of the dog is motivation for the homeowner to insure against the failure. The responsibility lies with the homeowner and the obligation terminates at the point of exchange. Very few question this, which is why you are seeing the likes of AllState advertising their services.

So, rather than attempt to normatively demonstrate the “credit” side of social accounting terminates at the point exchange via something like the “marginal productivity theory of distribution,” which is what, e.g, Robert Higgs attempts to do here(and thus repeating the same damn mistakes that classical liberal economists/theorists have been repeating for 150 + years: ref: Sean Gabb. NOTE: there exists an entire universe of an academic political class ready to pounce on normative divergences to justify moral ends), it simply suffices to point out that two most prominent promoters today of the Liddy-Schumer Moral Obligation, namely Schumer himself and Elizabeth Warren, both adamantly supported the ObamaCare Individual Mandate to “force” individual health liability to terminate at a point of exchange. They themselves have falsified their own claims. And that is sufficient.

Conclusion: Political Obligation is a Rational Calculation, not a Moral One

Liberal society by and large functions by the convention that obligations terminate at the point of exchange. Moral foundations added on top may attempt to morally collectivize the “credit” side of social accounting while more or less leaving the liability side of the social accounting ledger to convention. This is a natural conflict of liberalism: moral foundations vs convention/custom. In liberalism, there is never a “moral obligation” to obey the regime. Political obligation is a rational calculation, not a moral one. The liberal conflict between moral foundations and convention can survive a rational calculation until the moral foundation is collectivized as the Liddy-Schumer Moral Obligation. Then the moral obligation terminates the rational one.

The Liddy-Schumer Moral Obligation is the moral legitimacy of rent-seeking agents. And you can easily spot it by its arbitrary protectionist consequences. The same rationale to deport is the same rationale to prevent exit. If you “owe” taxes you cannot enter; if you owe taxes, neither can you leave. Chuck Schumer is the ultimate poster boy for State Capitalist Protectionism. He is a primary guardian of the banking oligarchy. The irony is that without the protectionism and the bailouts, there is likely no Facebook IPO. But defections by those who have gained from the State Capitalist Protectionism(the “brain drain” has just begun) will change the boundary constraints for all of us. This is an object lesson from the Total State model.

Oliver Wendell Holme’s famous dictum that “taxes are the price we pay for civilization” has to count as one of the great misnomers in liberal history. Taxes may be the cost of a given regime, but the regime never has been nor ever will be “civilization.”

1 Exception. Hoppe’s “invited-contractual” property rights model attempted to enforce a moral preference for immigration patterns hospitable to a status quo of Western Christian landowners by collectivizing any liabilities from social movement onto the property owners. That is, property owners could be liable for any future actions by anyone who has ever been invited onto their property. A throughly collectivist treatment of property that supposedly passes for libertarian. Anyone who subscribes to this more or less forfeits any real objection to collectivizing the “credit” side of the social accounting ledger.