Is Voluntary Government Possible?

0:00Okay, well one more to go. I thought this final topic is kind of different than all the rest. We started out with a combination of economic history and a little bit of philosophy, I suppose, and then we went towards strictly economics. But now the topic is, is voluntary government possible? And what this is, is what we'll talk about is the attempt on the part of a couple of economists, I asked myself and Walter Block to critique two other economists, or actually a lot more than two, other economists who have commented on subject matter that is really out of their field.

0:45So it's out of my field and Walter's field, and we're commenting on two other people. It's out of their field too. So I don't know what the promise you hear. But what it is, is Walter and I both were sort of on the same track of looking at a lot of this literature in economics that sometimes goes under the banner of public choice or the economics of politics, but really under the banner of what my old professor, James Buchanan, calls constitutional economics. And, you know, I was a student of Buchanan and Tollex 150 or so years ago when I was in graduate school, and I published a lot in the Public Choice Journal and elsewhere in the topic of public choice.

1:30So this is not a critique of public choice in general, but it's a critique of some aspects of this, especially the Buchanan strain of so-called constitutional economics, and the reason why Walter Block and I got interested in this is that we thought they were going way too far in making an analogy between markets and politics and calling politics just another market. After all, there is sort of a supply and demand for votes. There are demanders, special interest groups of government programs and the suppliers of government programs are the politicians using your tax dollars. So you can sort of think of an analogy between the supply and demand there, but we think that's about as far as it goes. It's sort of a curious analogy.

2:20And so that's what the topic of today is. Is voluntary government possible? So as you can tell from what I've said so far, I think it's a lot different than what we've been talking about. And let me quote Buchanan and Tillich themselves from their famous book, The Calculus of Consent. They said, the market and the state are both devices through which cooperation is organized and made possible, where two or more individuals find it mutually advantageous to join forces to accomplish certain purposes. And they say that the public choice approach incorporates political activity as a particular form of exchange. So there's that analogy between markets and politics.

3:05And as in the market relation, mutual gains to all parties are ideally expected to result from the collective action. The political process may be interpreted as a positive sum game. End quote. and that's the kind of thing that got us thinking that there's something wrong here, the political process is a positive sum game because if nothing it contradicts another aspect of public choice economics that Buchanan and Tellecker are known for is rent seeking. The economics of rent seeking is, they would never say that's a positive sum game, the notion of lobbying for governmental favors, it's at best a zero sum game, the transfer from one to the other And they, when I was in graduate school, they were writing dozens and dozens of papers, arguing and using all kinds of advanced mathematics that this was a negative sum game overall.

4:01And so it seemed to be a big contradiction here. And so we started looking at some of the main premises behind what they're talking about. And so they make this analogy. Of course, you know, in the market, the reason why economists think market exchange is efficient is that it's And it's unanimous. It's mutually advantageous. Pareto optimality. At least one person is better off and no one's made worse off. That's efficient from an economist perspective, mutually advantageous trade. But how far can you bring that notion over to politics? These statements I just read you would seem to imply that, well, to a large extent anyway, politics can be just as efficient for mutually advantageous. Well, Buchanan and Tulloch are very smart guys.

4:47They're probably the two smartest people I've ever met in my life outside of people like Murray Rothbard. I've had the pleasure to meet a number of people in my life who I thought really were a lot smarter than I could ever be, genius types. And I think Murray was like that. Buchanan and Tulloch, a few other George Stigler I met, the Austrians criticized him a lot, but I met him and talked with him a lot. He was sort of in that same category, big brain, big brain type of person. So Buchanan and Tullock, they resorted, they realized that politics is not really just like markets, so they started talking about what they call relative unanimity in their early work.

5:33Well, it's not unanimous politics. It's relatively unanimous. You could make it relatively unanimous. You could have a three-fourths majority voting role, for example. And so they've always been a proponent of that sort of thing, of having legislatures have qualified majority voting, because it makes them more like markets, more like markets. And that probably would be an In improvement, I suppose, I would like to live in a state where to raise my taxes they would need a two-thirds or three-fourths majority rather than a simple majority. That would certainly be an improvement over things, but really it's not the same as unanimity. It's not the same as markets. That just means, okay, if you had a four-fifths majority, okay, then we could exploit the hell out of 20 percent of the population.

6:22It would be a little harder, but you'd still be exploiting the, the 80 percent would still and we'll still be exploiting the 20% and that's not what happens in markets. So they did that for a long time, they sung that tune for a long time, Relative Unanimity, and then Buchanan was primarily responsible for what he calls conceptual unanimity, as another way of trying to create what he calls a voluntary theory of the state. He claims that this whole enterprise, and there's a journal of constitutional economics, Attempts to Create a Voluntary Theory of the State And our old friend, Leyland Jaeger, who taught here at Auburn for some years and is retired now, he still lives in Auburn, right?

7:07I just saw him last at the Austrian Scholars Conference. He wrote an article in the Cato Journal about this notion of conceptual unanimity, where he said, Wherever you see the word conceptual before the word unanimity, just substitute the word no, and you'll know what they're talking about. So, whenever there's no unanimity, well, conceptually, we could conceive of this. And, you know, M. Buchanan has written many big books about this. You know, one of them, he says that he calls himself a contractarian, that's what they call himself. To the contractarian, that law is legitimate and just, which might have emerged from a genuine social contract in which he might have participated.

7:55Not actual participation, but if you could conceptualize participation. That law is illegitimate and unjust, which finds no such contractual basis. So if you could concoct a theory where people might have conceivably possibly consented, The Social Contract Theory of Government can be used to place a stamp of approval on all or most of the actions of the existing government.

8:41Thus, the theory of the divine right of kings began as a check on government, as an order to the king to stay within divinely commanded laws, thou shalt not steal, that sort of thing. It was transformed by the state into a divine stamp of approval for anything the king might decide to do. End quote. And that's what a lot of social contract theories do, and it seems to me that even though Buchanan Buchanan and Tullock are well known as sort of a conservative or even libertarian economists. This is a social contract theory that can be and has been used as an excuse for all kinds of interventions everywhere. I'll continue reading from some of Buchanan and Tullock.

9:28Buchanan himself says, there need not be any actual political convention, like a constitutional Convention, at which voting rules are agreed upon by the citizens. Their mere existence gives them legitimacy. So if laws exist, the mere fact that they exist gives them legitimacy. And these rules may be in a constant change of flux, even though members of society do not hold any formal constitutional conventions to change the rules. The social contract is best conceived as subject to continual revision and change, and the consent that is given must be thought of as being continuous. So that even if the change is not through a formal convention, through like amending the U.S. Constitution, if it's done the Lincoln way, just by usurpation, Buchanan would say This must be thought of as being continuously consensual because it exists, it happens, it's out there.

10:30And he goes on, this was in The Limits of Liberty, Even when an original contract may never have been made, no attempt at a social contract, when current members of a community sense no moral or ethical obligation to adhere to the terms that are defined in the status quo, Quo, and when such a contract may have been violated many times over, the status quo defines that which exists. Hence, regardless of its history, it must be evaluated as if it were legitimate contractually. That's a mouthful, but that's Buchanan's view on this. Even if you didn't ever have a contract, and then if you did, even if the other party, government violates it constantly. You still have to obey the contract. So you can probably, you're probably beginning to see why Walter Block and I thought this was kind of fishy, the whole thing. And you know, we're not philosophers, but we know a few. And so we know enough to have run across a statement by David Hume, who once addressed this whole issue of tacit

11:42Contractual Consent, the famous example of a sailor who does not jump overboard and kill himself to protest the fact that he's been conscripted. And the fact that he does not jump overboard and commit suicide does not mean he consents to being conscripted into the Navy. But that seems to be what Buchanan and Tulloch are saying here, that the fact that we don't commit mass suicide means that we consent to whatever government wants to do to us. And, of course, maybe, you know, grabbing guns and marching toward Washington would be mass suicide in the nuclear age that we live in, so we don't really buy that. And, you know, this is all theoretical, but this literature seems to me it plays a lot of games, too, in that if you corner them and say, Say there's an article that they write that says, conceptually, antitrust regulation benefits everyone in society, conceptually.

12:42And then you respond by saying, but look at the whole history of it. It doesn't seem, it's always been a special interest law. They'll respond by saying, well, we're talking, this is a normative theory. We're not interested in positive analysis. This is a normative theory. But then they always make policy recommendations out of this. They always end up making some kind of policy recommendation about antitrust, which Buchanan has always been a very strong supporter of, for example. And so I don't buy that either. I don't buy that you can't criticize them based on reality, because they themselves, they eventually get around to reality, even though they're talking about these as being normative theorists. And so if you try to do that, there's a long history of people who have studied the state and just how coercive it has ever been.

13:29Has there ever been a voluntary state out there? But it turns out there's a long, long history of literature on this question. I'm going to have to... I wrote down some of the names. I think I'm going to have to reduce this.

13:53It's called the conquest theory of the state. These are some of the authors and historical authors that have written centuries ago. I think we'll fit them all in there. If you can pronounce the last guy's name, then we'll give you a certificate that said that you passed this seminar. You have passing grade on the seminar. And so, to give you an idea of what some of these authors said, Jean Baudin, in his book, Six Books of the Commonwealth, said reason and common sense alike point to the conclusion that the origin and foundation of Commonwealth was in force and violence. Pascal said, might is the sovereign of the world, and men will doubtless fight till the stronger party overcomes the weaker and a dominant party is established.

14:48He's talking about the formation of states. David Hume's Treatise on Human Nature said, It is certain that if we recount to the first origin of every nation, we shall find that there is scarce any race of kings or form of a commonwealth that is not primarily founded on usurpation and rebellion. David Hume, again, of the original contract, said almost all the governments which exist at present, or of which there remains any record in history, have been founded originally either in usurpation or conquest or both, without any pretense of a fair consent or voluntary subjection of the people. Turgot, who was a precursor of the Austrian School of Economics, said this in 1750.

15:38He wrote, the first governments were necessarily the product of war and thus implied government by one man alone. We need not believe that men ever voluntarily gave themselves one master. Augustine Thierry asserted that government has been created by the mixture of several races, the race of the invaders and the race of those invaded. Same idea, even Friedrich Nietzsche, I didn't write down here, I didn't have space, said the state originates in the cruelest way through conquest. And since I wrote down Ludwig Gumplewitz, I might as well quote him, he said every political organization begins at the moment when one horde permanently subjugates another horde. And so for hundreds of years this is what scholars have said about how governments have formed.

16:26Even Edmund Burke wrote in 1756, all empires have been cemented in blood and the greatest part of the governments on earth must be concluded. Pyrenees and postures, violations of the natural rights of mankind, and worse than the most disorderly, anarchies. And I continue here in what I'm reading from the more modern authors, but the theme is the same. Albert J. Nock, The State is an Economic Exploitation of One Class by Another. And you can't tell it, I think they may be, I'm sure they're familiar with these things, but they just ignore it in all this work. And it's kind of frustrating, they'll just respond to say, well, these are normative theories, we're not interested in historical reality.

17:13That's what they've, I've read them say anyway, to some critics, they said it to me in a criticism of one of their antitrust articles that I wanna talk about. And another thing they do is they deny this whole business, you know, these quotes that I just read, they're all mostly about one group, one horde conquering another horde, one group exploiting another group. And they do say in the calculus of consent that they reject any such analysis of government as one group exploiting another group. Group. And they explicitly say, you know, we are not Marxists. We don't believe in this sort of Marxist class analysis. But there's a lot more than Marxist class analysis. These people were really not talking about Marxian class analysis of the working class being exploited by the capitalist class. They were just talking about whoever happens to control the powers of the state, controlling, exploiting their fellow citizens by using these powers.

18:15and there's another group of scholars in history known as the French industrialist school and it's not Marxian class analysis but it's what you could call libertarian class analysis and both Ralph Reiko and Hans Hoppe have articles in a book that was published by the Mises Institute called Requiem on Marx some years ago I don't know if it's out here still it was published is in the library. There are two essays on libertarian class analysis. These are some of the earlier writers that didn't really call themselves libertarian, but this type of class analysis was simply one group within the government exploiting the minority, the majority who controlled the government exploiting a minority.

19:14had nothing to do with capitalists and workers or anything like that, like Marxian class analysis and there was no theory like the Marxian class, but it was simply the majority who controls the government, using the government for their financial benefit at the expense of the minority. and this included Augustin Thierry, Charles Comte, Danoil Destute de Tracy, Benjamin Constant and Jean-Baptiste Say, who is also quite a famous economist. There's at least one of his books on the shelf side here. And so that was a, you know, that's a totally different idea about the state. It doesn't have to be Marxian. You don't have to reject this type of analysis as Marxist. Marxist. And in the American tradition, the one political writer, political philosopher who carried forward this tradition was John C. Calhoun. And I mentioned early in the week his book, A Disquisition on Government, which is in this book of readings of his called Union and Liberty that the Liberty Fund publishes, his Disquisition on Government. And he presented sort of a modern version of the French Industrial School argument.

20:27Where he said, I'll read you a little bit of it, since I didn't mention Calhoun in any detail, he said the community under democracy will inevitably be divided into two great parties, a major and a minor party, between which there will be incessant struggles on the one side to retain and on the other to obtain the majority, and thereby the control of the government and the advantage it confers. And continuing on, the necessary result is to divide the community in the two great classes, so classes but not Marxian classes, one consisting of those who in reality pay the taxes and of course bear exclusively the burden of supporting the government, and the other of those who are the recipients of their proceeds or of taxpayers and tax consumers, and so that's the Calhoun tradition, he's just modernizing the French industrialist school of libertarian class analysis, and so And Buchanan and Teller simply, I don't think they even address that at all.

21:33In fact, they say, we are going to assume this is all irrelevant, so they just ignore it. But I don't think they ought to at all. And so with this notion of conceptual unanimity that ignores the reality of governments, it really is a blank check for interventionism. And if you could read the articles in the Journal of Constitutional Economics, a lot of the authors are free market economists, fellow travelers, a lot of people who are really zealots over interventionism. And yet the underpinning theory behind constitutional economics, a lot of it, is to provide rationales for interventionism, especially Buchanan himself. I'll give you one example. I don't know if this was a response to my work, but it might be.

22:23It was an article by Jim Buchanan and Dwight Lee, who was another old friend of mine, published in 1992 in, I think they published it in Economic Inquiry, and I had published an article in 88 in Economic Inquiry on antitrust, and it might have been a response to me and my anti-antitrust stuff, but they said, you know, they never addressed my actual historical and empirical research on antitrust, This was a protectionist scam from the beginning, as I told you the other day. But what they did was they concocted one of these conceptual unanimity theories. And they said, imagine a coalition of cartels, and each cartel wants to restrict output and conspire to raise prices.

23:14However, even if you're a cartel member, you don't want to pay monopoly prices for the things you buy. So at some stage, when the social contract might have been formed, you, the would-be cartel member, the would-be monopolist, would conceptually agree to laws banning cartels, banning price-fixing cartels, that is, you would conceptually agree to antitrust laws, conceptually, maybe, possibly, could be. That's pretty much what they say. And then, of course, they do make recommendations for stronger antitrust laws at the end, but then, you know, when Dwight presented this at a conference, I brought up the fact that there are reams and reams of evidence that contradict this, he fell back to, this is a normative theory, this is not about reality, it's not about positive economics, it's a normative theory, but I don't buy it, it's too slippery, I just don't buy that. Here's what they say, actually, that the coalition of cartels can be thought of as are implicitly supporting antitrust legislation by accepting it and accommodating to it.

24:28So there's that idea again that since businesses don't revolt against antitrust and blow up the Federal Trade Commission building, they must accept it. It is in this sense that we argue that it is useful to conceive of our coalition of cartels and of its support for antitrust legislation and enforcement. So they don't claim that there ever was such a coalition or that any business people ever did support antitrust regulation, but they say we could conceive of some sort of remote situation where they would have, and they use it to make a case for antitrust regulation. They really do. They also have Buchanan and Tullott have used the same construct to make the case for the The welfare state, and they say that conceptually even non-recipients of welfare could conceivably support the welfare state if they look at welfare as a form of income insurance.

25:30What if you go broke tomorrow? You might be wealthy today and lose everything tomorrow. Thank goodness the welfare state is there. That's basically their argument, so therefore you should support the welfare state because That's my thinking. I'm glad they have those public housing projects in downtown Baltimore, just in case, just in case, because I might want to live there someday. Things go badly for me. But they use this conceptual business again. And I might as well quote Jaeger precisely. The very word conceptual as used by contractarian theorists indicates that a, quote, conceptual agreement is not an actual one, that a conceptually true proposition is not actually true.

26:19It is no mere joke to say that conceptually is an adverb stuck into contractarian sentences to immunize them from challenge on the grounds of their not being true. So like I said, it's a substitute for the word no, no consent. Another thing that we look at is, you know, it's called constitutional economics and it's all these theories of conceptually what would people agree on at the formation of a constitution where the rules of the game are set, not specific legislation like the dairy bill or something, but the rules of the game, how we vote, how we elect presidents and all these things. But I couldn't help just thinking of the actual Constitution, I have to try to introduce some reality here, the United States Constitution, you know, women did not have the right to vote at the time, those were the good old days, but nor did non-property owners, just I'm just kidding. Women can only sourpuss faces. I'm in favor of no one voting, not just women not voting.

27:33Nor did property owners or slaves. It was adopted with a majority vote of only nine out of 13 states. As soon as nine states held ratification conventions, the Constitution was the law of the land. And of course, North Carolina stayed out for a whole year. About three-fourths of the adult males didn't even vote in the elections to send delegates to the constitutional conventions, and so there was a very tiny percentage of the entire population, about one-sixth of the adult males who participated in the elections to send delegates to the state ratifying conventions, and so you couldn't really legitimately say that there was anything near relative unanimity, even for the U.S. Constitution.

28:20There again to try to bring some reality next to this and so that's a myth that there was anything near Unanimity even if even if all the states did ratify it, you know, which they eventually did Okay, and I think that's that's the message I wanted to say for today. That's that's all I wanted to say for this afternoon I know you're all worn out. I've worn you out all this long-winded speechifying, but I'll take questions and answers.

29:15and also you said like yeah so that limits liberty I mean right well he's just He's pulling that directly out of Hobbes, because Hobbes says that you have to do whatever the sovereign says to be granted in all of his power, even if it violates the supercontract, which says, because Hobbes' supercontract says everyone has to have property rights and it can't be violated, and then he later says, oh, it's up to the state. Buchanan has always been a big fan of Hobbes. He's always quoting Hobbes, at least he used to when I was around him.

30:24Yeah, one of the conclusions I came to also in this paper was that if you're really interested in scholarship on the voluntary society, well then go the route of like Bruce Benson's book on the privatization of the law, things like that, or private roads, like our Rhodes scholar Walter Block was involved in. That's what a voluntary society is. If you want to study the voluntary society, don't spin imaginary tales about the state of all things is voluntary. And I wouldn't argue that all the contractarians are like that, like you said, but I only mentioned sort of the Buchanan wing of this whole area here. Any other comments, questions? The afternoons have been kind of slow around here this week.

31:16One of the things, the point you're making here about, you know, that their concepts are sort of excellent, I apply that to a whole host of things, you know, the market analysis and the news, the producing legislation, that there are only two situations of local government, they use that sort of fit, all across the board, basically, to find a couple of choices. But there's always, you know, I think the homeowners association, or if we vote for government, they're really not the same thing. You might get corruption in a homeowners association, but yet... Well, yeah, they're very close to the homeowners, aren't they? The homeowners association unlike most governments.

32:08And, you know, if you had real unanimity, you don't need government at all. Well, that's just called the voluntary society, where we all agree to do something, and so this decades-long quest for unanimity, it's out there. It's called the private sector. It's called clubs, community organizations, charities, a corporation. What is a corporation? But a bundle of contracts among sometimes hundreds of thousands of people who volunteer to pursue the same agenda. So I thought it was just a terrible amount of waste of brain power in this whole area. Like you said, they can imagine almost anything. I don't think Buchanan's support for inheritance taxes, I don't think that was one of these conceptual unanimity papers of his, but he's also on record, in addition to being a strong supporter of antitrust regulation, He's always disliked inheritance. He's always been in favor of inheritance taxes and I think somewhere along the line he wrote how conceptually even the wealthiest people would be in favor of inheritance taxes, conceptually, for some reason.

33:21So you can use to advocate your pet thing. Maybe he likes intervention in those areas but not in other areas. It's kind of very slick. I'm too, I'm not smart enough to do this kind of work.

34:31That is very strange, because this last semester I showed my class an interview with Friedrich Hayek by James Buchanan, Buchanan interviewing Hayek, and I think Buchanan was familiar with the whole socialist calculation argument and why the biggest computer in the world and the smartest geniuses programming still couldn't plan an economy, but I suspect the explanation for that was that My old friend Jim Bennett always did say that the first $5 bill he ever earned is probably still in his wallet, about Jim, do you have your hand up?

35:20I'll just make a comment first. It is very strange that we've always had that fear when we have a lobby, we've never had contractuality, a media company, we've never had a specific team. ______ Yeah, we're even much more remote than a political realm to have this work. Well, you got to ask them, I don't understand it either.

36:05Or Rod, Rod is the philosopher in the room, maybe after this.

36:18Oh sure, yeah, commerce would come to a halt if you believe that if I break all the rules, the other party still has to assume I didn't break the rules and the rules are all legitimate and that wouldn't work.

36:35______ ______ Well, that's probably the best we can do. The voluntary government, yeah. Sign this or we'll chop your head off. Yeah, well, being Italian I would say that's a fine precedent to establish. My people have been doing it for generations. That's the way we get things done. Any other questions or comments? I guess we shouldn't have told you there was a beer and pizza party at the end, because everyone wants to just get out of here. Well then, thank you very much for sitting still and listening. I enjoyed it.

37:23I just wanted to reiterate one thing about the upcoming seminars with Professor Salerno, Professor Long, and Professor Cantor. These are people that I've all seen before and they are really the very best lecturers I've ever seen along with Tom DiLorenzo. Thank you.