The State by Anthony de Jasay (23 page)

like "freedom is equal servitude" or "freedom is enough food." Such conceptual miscegenation, by coupling equality to freedom, gives it a piggyback ride. Carried on the back of liberty, it is smuggled in among our agreed political ends.

1. This is the drift of thinking of liberty (as Dewey would have us do) as "the power to do": as material sufficiency, food, money; as an empty box unless filled with "economic democracy"; as some fundamental condition not to be confused with the "bourgeois" or "classical" liberties of speech, assembly and election, all of which are totally beside the point to the "really" (economically) unfree. (It is surely possible to interpret history as "proving" the contrary. Why else did the English Chartists agitate for electoral reform rather than higher wages? By the same token, one can plausibly present the formation of workers' councils, the call for a multiparty system and free elections in Hungary in 1956, and of the wildfire spread of a nationwide autonomous trade union in Poland in 1980, as demands for the classical bourgeois freedoms by the "economically" unfree. In fact, the opposite interpretation looks grossly implausible. We cannot seriously be asked to believe that it was the happy accomplishment of "economic liberation" that has engendered the demand for bourgeois freedoms in these societies.)
   
 

2. It is to show up the deceptive ease with which equality rides piggyback on freedom past the most watchful eyes, that I choose a text by the usually so lucid Sir Karl Popper, who is as prominent a critic of totalitarianism as he is a distinguished logician:
   
 

Those who possess a surplus of food can force those who are starving into a "freely" accepted servitude.

A minority which is economically strong may in this way exploit the majority of those who are economically weak.

If we wish freedom to be safeguarded, then we must demand that the policy of unlimited economic freedom be replaced by the planned economic intervention of the state.*17

The use of the word "force" is, of course, poetic licence. What Popper is saying is that those with a surplus of food just sit back and do not volunteer to share it with those who are starving; to eat, the latter must come forward and offer to work for them. Since they cannot "really" choose to starve, their offer to work is an acceptance of servitude. It is "free" but not "really" free choice. Note also that it is the minority who do this to the majority, which makes their conduct somehow even more reprehensible than if it were the other way round. Our democratically conditioned consciences have thus one more reason to approve the "planned economic intervention of the state," though it is a little bewildering that in defence of the Open Society, we are proffered the Gosplan.

1. Poetic licence or not, the multiple confusion which finally gives us the Gosplan as a condition of freedom, needs sorting out. First, Popper asserts that there is an analogy between the strong bully enslaving the weaker man by the threat of force, and the rich exploiting the economic weakness of the poor.*18 But there is no such analogy. There is a plain distinction between taking away a man's freedom (by threatening to beat him up) and not sharing our "freedom" (= food) with a man who lacks it in the first place.
   
 

Second, there is confusion between the availability of choice (between servitude and starving) which is a matter of liberty,*19 and the equity, fairness, justice of a situation where some people have a lot of food and others none, which is a matter of equality. Third, confusion is spread by leaving unstated a number of assumptions which are needed to stop this situation from ending up as a normal neo-classical labour market equilibrium, where those owning a lot of food compete to hire those who own none and who compete to get hired, until hirers and hired are all earning their respective marginal (value) products.

1. The assumptions under which the outcome is starving or servitude are quite strong ones, though they may have some realism in particular kinds of societies. In such societies, the minority's offer of food in exchange for the majority's servitude is at least "Paretosuperior" to letting them starve while redistribution through "planned intervention of the state" would have generally unpredictable results, one likely possibility being that much of the food goes bad in government warehouses.
   
 

2. Finally, although freedom is not food, and liberty is not equality, equality may yet help justice, or be otherwise desirable, but this does not go without saying. Before anyone can state that the coexistence of a minority with a surplus of food and of a starving majority ought to be redressed, he has to show, either that greater equality in this respect would contribute to other ends in such a way that self-interest will make rational people opt for the equality in question, or that people's sense of justice, symmetry, order or reason demands it to the exclusion of contrary considerations. The endeavour to show this constitutes much of the ideological Begleitmusik of the development of the modern state.
   
3. To sum up and to restate some of the preceding argument: The democratic state is unable to content itself with providing benefits to its subjects that may make some better off and none worse off. In democracy, tenure of state power requires consent, revocably awarded to one of several competitors by an agreed procedure. Competition involves offers of alternative policies, each of which promises to make designated people in society better off. These policies can be produced only at the cost of making other people worse off. In an unequal society, they tend to be egalitarian (and in a society of equals they should tend to be inegalitarian), to attract a majority. The majority's "preference" for one of the policies on offer "reveals" that its proximate effects represent the greatest accrual of democratic values. People may opt for it whether or not their interests are served thereby. The dominant ideology, liberalism, coincides with the interest of the democratic state and predisposes people under its influence to like democratic values. It calls upon the state to do for ethical reasons what it would have to do anyway to maintain its tenure. It tells people that the policy agreed to by the majority contributes to ultimate ends they all share. It also promotes additional policies, showing that they are conducive to the same ends and recommending that people opt for them when they are offered. In doing so, it both promotes and responds to the growth of the state.
   
 

 

Author: Jasay, Anthony de Title: The State
Anthony de Jasay

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3.
Democratic ValuesThrough Equality to Utility

The rule "to maximize society's utility, equalize incomes" gains validity once incomes have been equal for long enough.

1. No man has more than one stomach, but this is a thin basis for holding that the more equally all goods are shared, the better.
   
 

2. It is part of our intellectual heritage that whatever else it may do which we hold for or against it, equalization of incomes will maximize their utility. The intuitive support which helps this proposition over the more obvious obstacles is that an extra dollar must mean more to the poor man than to the rich. On reflection, all that intuition really strongly supports is that a given absolute sum increases the poor man's utility relatively more (say, ten-fold) than that of the rich (say, by a tenth). Nothing in these "cardinal" comparisons of the poor man's initial utility with its increase, and the rich man's initial utility with its increase, enables us to compare the two utilities, or the two increases, between them
   

either "ordinally" (in terms of bigger or smaller) or "cardinally" (by how much bigger).

1. One view of this problem (with which, as chapter 2 has shown, I can't help but concur) is that we cannot do this because conceptually it just cannot be done, because interpersonal comparisons are intrinsically misdirected enterprises. If they are undertaken, all they can possibly be known to express is the preferences of whoever is making the comparison, and that is the end of the matter. Pursuing it beyond this point can take us into the analysis of these preferences. We will then be dealing with questions of ideology, sympathy, compassion, party politics, raison d'état and so forth. These or other elements can perhaps explain why the comparison fell out the way it did. They will not shed any further light on the utilities purported to have been compared.
   
 

2. However, the contrary view seems also to be tenable. It must be, if only because it is held by some of the most incisive minds who have addressed this problem. Thus, Little feels able to make "rough-and-ready," and Sen "partial," interpersonal comparisons of utility. The positive case, as distinct from the normative one, for giving some of the rich man's money to the poor man is that the same money, differently distributed, has more utility. Unless it is granted, for argument's sake, that such comparisons make sense, there is no factual case to prove, only moral judgements to be set one against the other and, as Bentham ruefully put it, "all practical reasoning is at an end."
   
 

3. Yet the intellectual tradition of discovering in equality an enabling cause of greater utility, is a positive one. Central to it is a
   

conviction that we are dealing with matters of fact and not of sympathy. Some such conviction, albeit unconsciously and implicitly, conditions an important strand of the liberal argument about the distribution of the national income and optimum taxation.*20 It seems to me worthwhile to meet it on that ground, as if utilities could be compared and added up to social utility, and as if it was social science which told us that one distribution of income was superior to another.

1. Let me recapitulate-"retrieve from the political subconscious" would be a truer description-the reasoning behind this conviction. It goes back at least to Edgeworth and Pigou (the former taking a more general, and also more cautious, view) and provides a robust example of the capacity of a dated theory to inspire practical contemporary thought with undiminished vigour.
   
 

2. At bottom the theory rests on a basic convention of economics which gives rise to fruitful theories in various branches of it, labelled the Law of Variable Proportions. The convention consists in assuming that if different combinations of two goods or factors yield the same utility (in consumption) or output (in production), the increments of utility or output obtained from combining increasing quantities of the one with a constant quantity of the other, are a decreasing function of the variable, i.e. each increase in its quantity will yield a smaller increment of utility or output than the preceding one. In theories of consumers' behaviour, this is also described as the "principle of diminishing marginal utility," "the convexity of indifference curves" or "the falling marginal rate of substitution" of the fixed for the variable good.
   
 

Now if a person is given more and more tea while his other goods do not increase, the utility, satisfaction or happiness he derives from successive doses of tea diminishes. The intuitive support for presuming this resides in the fixity of his bundle of other goods. ("Presumption" is employed advisedly. A hypothesis framed in terms of utility or satisfaction must be a presumption, as it cannot be disproved by experiment or observation unless the context is one of uncertain alternatives, see below.) The same presumption stands for any single good when all the other goods stay fixed. However, it cannot be aggregated. What is presumably true of any single good is not even presumably true of the sum of goods, i.e. income. As income increases, all goods potentially or actually increase. What, then, is the relevance of "knowing" that the marginal utility of each good falls if the quantity of the others remains fixed? The diminishing marginal utility of tea conditions the mind to acceptance of the diminishing marginal utility of income, but the temptation to argue from one to the other is a trap.

1. A presumption can be established for the falling marginal utility of income by defining income as all goods except one (which stays fixed when income rises), e.g. leisure. It is possible to suppose that the more income we have, the less leisure we would give up to earn additional income. However, if the falling marginal utility of income is a consequence of excluding one good from income, then it cannot be applied to a concept of income which excludes no good. If any good can be exchanged at some price against any other including leisure, which is by and large the case in market economies, income is potentially any and all goods, and none can be supposed fixed to give rise to falling marginal utility for the sum of the rest.
   
 

It is well established that the realm of certainties-where we are sure to get a pound of tea if only we ask for it and pay the shopkeeper the price-does not lend itself to observation of the marginal utility of income. Meaningful observation of the rate of change of utility as income changes, however, is conceptually possible in the face of risky choices. The pioneer study of lotteries and insurance, as evidence relevant to the shape of the utility function, strongly suggested that the marginal utility of income may be falling in certain income brackets and rising in others, consistent with a hypothesis that changes of income which leave a man in his class have, in a sense, a lesser value than changes giving access to a quite different kind of life: "[a man] may jump at an actuarially fair gamble that offers him a small chance of lifting him out of the class of unskilled workers and into the 'middle' or 'upper' class, even though it is far more likely than the preceding gamble to make him one of the least prosperous unskilled workers."*21 We must note (and mentally carry forward to the next two sections of this chapter) that this is the precise obverse of the type of valuation of income which is supposed to induce rational people to adopt a "maximin" defence of their interest in Rawls's Theory of Justice.*22