The State

Anthony de Jasay, courtesy of the author
Jasay, Anthony de
(1925- )
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Indianapolis, IN: Liberty Fund, Inc.
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1. K. Marx, "The Jewish Question," Early Writings, 1975, pp. 220, 226, 222.

2. As one of the founders of this school puts it, welfare economics is about market failures, public choice theory is about government failures (James M. Buchanan, The Limits of Liberty, 1975, ch. 10). Note, however, the different tack adopted by certain public choice theorists, referred to in chapter 4, pp. 270-1, n. 38.

3. The term "political hedonist" was coined by the great Leo Strauss to denote Leviathan's willing subject.

4. Marx, "The Jewish Question," p. 219.

Chapter 1. The Capitalist State

5. Robert L. Carneiro, "A Theory of the Origin of the State," in J. D. Jennings and E. A. Hoebel (eds), Readings in Anthropology, 3rd edn, 1970.

6. A more succinct statement of the same point is found in Michael Taylor's excellent Anarchy and Cooperation, 1976, p. 130: "if preferences change as a result of the state itself, then it is not even clear what is meant by the desirability of the state." See also Brian Barry, The Liberal Theory of Justice, 1973, pp. 123-4, for the related argument that since socialization adapts people to their environment, a heterogenous or pluralistic society is unlikely to turn homogenous and vice versa, although "only one generation has to suffer to create orthodoxy (as the absence of Albigensiens in France and Jews in Spain illustrates)."

However, Barry's use of the socialization argument seems to me somewhat lopsided. Must we exclude the possibility that the environment can generate not only positive, but also negative preferences for itself? Enough examples from second-generation socialist countries and even from third-generation Soviet Russia, attest to a virulent allergy to totalitarian ways and a yearning for diversity on the part of some unknown but perhaps not negligible part of the population. In the pluralistic West, there is a parallel yearning for more cohesion of purpose, for moral attitudes, an allergy to admass, to what Daniel Bell calls the "porno-pop culture" and the "psychedelic bazaar."

This is perhaps saying no more than that all societies tend to secrete corrosive elements (though in only some societies do the rulers suppress them). Yet it is not trivial to generalize the "endogenous preference" argument by admitting that social states may generate both likes and dislikes. Otherwise, the endogenous generation of preferences would ceaselessly cement any status quo and historical change would become even more mysterious, incomprehensible and random than it is anyway.

7. In the luxuriant literature that has sprouted around John Rawls's Theory of Justice, 1972, no objection appears to have been raised against the "original position" on this ground. The participants in the original position are devoid of all knowledge of their particular persons. They do not know whether they are representative white Anglo-Saxon men or representative Red Indian women, tenured philosophers or welfare recipients. They do not even know the age they live in (though this seems hard to reconcile with their knowledge of "political affairs and the principles of economics"). They are induced to seek a "cooperative solution" to their existence (in game-theory terms), which can be summarily interpreted as agreement on a social contract for a just state.

Failing agreement, in leaving the original position they would exit into the state of nature. They seek to avoid this outcome, because they know enough about themselves and the state to prefer it to the state of nature. They know their "life-plans" whose fulfilment depends on command over tangible and intangible "primary goods." They also know that the state, through the "advantages of social cooperation," entails a greater availability of primary goods than the state of nature. In technical language, the participants thus know that they are playing a "positive-sum game" in bargaining for a social contract (which is just in the sense, and only in the sense, that everybody is willing to stick to its terms). This means that if the cooperative solution is reached, more primary goods can be distributed than if it is not.

The comparison of two bundles of primary goods, however, requires indexing, and the weights adopted for the index (for instance, the relative valuation of time off against real income), cannot help but reflect a logically prior preference for a type of society. In other words, people in the original position cannot say that the bundle of primary goods available in the state of nature (containing, for instance, much leisure) is smaller than that available under the state (containing, for instance, many tangible consumption goods) unless they already know that they prefer to live in civil society. Comparison of the state-of-nature bundle and the state bundle presupposes the very preference which it is employed and required to explain.

The state-of-nature bundle of primary goods contains more of the things which people living in the state of nature are used to and have learnt to appreciate. It is, for them, the bigger bundle. The converse is true of the bundle available under conditions of social cooperation. It is the bigger bundle for people who have learnt to like what it contains and not to mind its constraints. But can people in the original position really tell which bundle is bigger?

8. Pierre Clastres, La société contre l'état, 1974; English translation, Society against the State, 1977.

9. Ibid., ch. 11.

10. John Plamenatz, Man and Society, 1963, vol. II, pp. 280-1. See also his German Marxism and Russian Communism, 1954, ch. 2.

11. Cf. C. B. Macpherson, The Political Theory of Possessive Individualism, 1962, p. 49, for the view that without unconditional ownership, there can be no market for land. The same argument must hold for any other "means of production," including labour. (For Macpherson, no less than for Marx, the rot set in when the individual was acknowledged to own his labour and came to sell it rather than its products.) In Russia, service tenure of land meant that serfs ("souls") could not, prior to 1747, be sold off the land because they were needed to maintain the landlord's capacity to serve the state. The transferability of "souls" (hitherto regarded as managed by the landlord on behalf of the ultimate owner, the state) was a symptom of social progress, a sign that private property was taking root in Russia. The reader must bear in mind that the Russian nobility had no title to its lands prior to 1785 and that its service tenure was quite precarious. In view of the recent nature of private property as a social institution, the progress of capitalism in Russia in the short run-up to 1917 was most remarkable.

12. Gewerbefreiheit, the freedom to engage in a particular craft or commerce, was introduced in Austria-Hungary in 1859 and in the various German states in the early 1860s. Prior to it, a cobbler needed a state licence to cobble and even a mercer needed one to sell thread. The licence was granted, or not, at the state's discretion, ostensibly on grounds of proficiency and good standing, in fact as a means to regulate competition. At all events, because of the licence, the goodwill of the business could not be easily negotiated.

13. One must not confuse injustice and cheating. An unjust man will, if he can, hire you for wages you cannot be expected to work for. (What this may precisely mean is a large question. As I am not concerned with substantive questions of justice, happily I can pass it by.) A cheat will not pay you the wages he said he would. The capitalist state must, of course, go after the cheat.

14. The answer consistent with the capitalist ideology whose contours I am trying to sketch, might run like this: "Yes, a man should be left free to sell himself into slavery; there is no more competent judge than he of his reason for doing so." The state has nonetheless the duty to withhold legal protection from the institution of slavery, contributing to its removal as an option available under contractual freedom. Contracts under which slave-traders sell captured Africans to slave-owners obviously violate the Africans' rights. If plantation-bred third-generation slaves, for reasons which will always remain debatable but which are their reasons, do not seek freedom, we have to think again. Note that the British government first prohibited the slave trade without prohibiting slavery. The state must simply ensure that if he wants to walk off the plantation, he should not be prevented from doing so, i.e., it should not help enforce a contract under which the planter owns the slave. This is patently not an abolitionist position. It is doubtful whether it would have been an acceptable compromise to Calhoun and Daniel Webster.

15. This assumes that the arrangement requires unanimity. If it does not, and the arrangement continues to produce its benefits after the withdrawal of the person who failed to get his way in bargaining, the well-known free-rider problem arises and might destabilize the arrangement. If the non-cooperator benefits as well as the cooperators, an incentive is created for the latter to defect. As each successive cooperator becomes a free rider, ever fewer cooperators carry ever-more free riders and the incentive to defect keeps increasing. Various devices, some practicable in some situations and others in others, can be conceived to hinder this outcome and give the arrangement some stability. (Cf. pp. 237-39.)

16. The reader will have spotted that while one type of state would have an interest in proceeding as above, other types of state might want to do the precise opposite, to make their subjects appeal to them as frequently as possible; this may well coincide with the interest and the perhaps-unconscious wish of the legal profession. Laws breed lawyers who, in turn, breed laws.

17. K. Marx, "The Eighteenth Brumaire of Louis Bonaparte," in K. Marx and F. Engels, Selected Works in One Volume, 1968, p. 169.

18. Locke, seeking to oppose Hobbes and to present a more palatable doctrine, saw that if people's natural right was to remain inviolate (i.e. if the state was not to trespass upon property which, in turn, was coextensive with liberty), sovereignty could not be absolute. It had to be limited to the upholding of natural right (Second Treatise, 1689, section 135). Subjection of the executive to a strong legislature was to safeguard this limit.

Two objections arise. First, the sovereignty of the legislature being absolute, we are back in the Hobbesian situation: the legislature is the monarch; why should it not violate natural rights? Quis custodiat ipsos custodes? Second, why should the executive choose to stay subjected to the legislature?

Locke was really arguing from the circumstances of a historical fluke: property-owners have managed to dethrone James II and put William III in his place, therefore the legislature has the upper hand over the executive. He was manifestly unaware that by giving the majority the right of rebellion, he did not provide them with the means for rebelling successfully in less exceptionally propitious historical circumstances than those of the Glorious Revolution (1688). It is fairly probable that had he been writing in the age of armoured vehicles, automatic weapons and proper telecommunications, he would have avoided the concept of a right to rebel altogether. Even within the technical civilization of his own day, he failed to allow for a state which is neither inept at keeping power nor insensible to its subjects' property.

19. I submit that "prisoners' "; is preferable to the more usual "prisoner's," for the dilemma is always that of two or more persons and its essence is the fatality of mutual betrayal. It cannot ever be a game of solitaire.

20. Hobbes's dilemma is more natural and less rigorous than the one set up under the conventions of formal game theory and it should, much of the time, have a cooperative solution. In a formal game, the player must make his move all the way, he is not allowed pauses, feints or tentative half-moves whose second half depends on the equally tentative reactions, tâtonnements of the other player. In the state of nature a player, before even making a half-move, may make speeches, brandish his weapon, cajole, etc. Depending on the other player's reaction or rather on his reading of it, he may walk away (if the other stands his ground), or strike a blow (either because the other looks about to strike first, or because he is looking the other way), or perhaps hear and consider an offer of Danegeld.

21. In his remarkable Anarchy and Cooperation, Taylor rightly raises an eyebrow at Hobbes not applying to a state of nature composed of states, the analysis he applies to a state of nature composed of persons. This reproach looks particularly grave from an empiricist's point of view: for a state of nature composed of states is available in the real world, while a state of nature composed of persons is a theoretical construct, or at least it was that for Hobbes and his readers who had no inkling of what modern anthropologists were going to find in remote corners of the world.

22. J-J. Rousseau, Discours sur l'origine de l'inégalité parmi les hommes, 1755.

23. I am borrowing this formulation from Raymond Boudon and François Bourricaud, Dictionnaire critique de la sociologie, 1982, p. 477. In attributing the crucial role in the creation of the problem to myopia, I have been preceded by Kenneth M. Waltz, Man, the State and War, 1965, esp. p. 168. Myopia can make the deer worth less than the hare because it is further away; the second hunter's awareness of the first hunter's myopia can induce the former to run off after a hare even though it is the latter who is too shortsighted to see the deer!

24. To be led, by a scrutiny of the core structure of mutually advantageous cooperation, to the conclusion that Rousseau's social contract has an insufficient basis in rational self-interest, is certainly unexpected. The theory of the social contract has always served as the rational foundation for the state, making mystical-historical foundations both of the pre-Reformation and the romantic-Hegelian type redundant. Part II of Ernst Cassirer's The Myth of the State (1946) is entitled "The Struggle against Myth in the History of Political Theory," and deals with the Stoic heritage in political philosophy, culminating in contractarian theory. In it, he writes: "if we reduce the legal and social order to free individual acts, to a voluntary contractual submission of the governed, all mystery is gone. There is nothing less mysterious than a contract."

However, a contract which it is impossible to derive from the perceived interest of the contracting parties is mysterious, and presumably mystical in its genesis.

25. "If, in a group of people, some people act so as to harm my interest, I may readily submit to coercion if this is the pre-condition of subjecting them to coercion" (W. J. Baumol, Welfare Economics and the Theory of the State, 2nd edn, 1965, p. 182). This statement is presented as enabling the state's generally recognized functions to be logically derived from what its subjects want. It is not explained why the fact that some people act to harm my interest is sufficient to persuade me to submit to coercion (in order to submit them to it, too), regardless of the sort of harm they are doing to my interest, its gravity, eventual possibilities of a non-coercive defence, and regardless also of the gravity of the coercion I am submitting to, and all its consequences. Yet it is not hard to interpret history in a way which should make me prefer the harm people do to my interest, to the harm people organized into a state and capable of coercing me, can do to my interest.

26. Leo Strauss, Natural Right and History, 1953, p. 169.

27. Ibid., p. 169, note 5.

28. Taylor, Anarchy and Cooperation ch. 3; David M. Kreps, Paul Milgrom, John Roberts and Robert Wilson, "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma," Journal of Economic Theory, 27, 1982; J. Smale, "The Prisoner's Dilemma and Dynamical Systems Associated to Non-Cooperative Games," Econometrica, 48, 1980. For a broader review of the problem, cf. Anatol Rapoport, "Prisoners' Dilemma—Recollections and Observations," in Anatol Rapoport (ed.), Game Theory as a Theory of Conflict Resolution, 1974, pp. 17-34. The important point seems to be that the players must not be stupid and totally without foresight. Fairly alert, worldly-wise players will generally cooperate in iterated prisoners' dilemmas. Cf. also Russell Hardin, Collective Action, 1982, p. 146.

29. Prisoners' dilemma and free riding are not just different words describing the same structure of interaction. The former imposes on each rational prisoner one dominant strategy, i.e. to confess before the other can betray him. This alone secures the least bad of two alternative worst-case outcomes (maximin). The free-rider problem imposes no dominant strategy, maximin or other. It is not inherently inconsistent with a cooperative solution. Where would the free rider ride free if there were no cooperative transport service?

To make it into a prisoners' dilemma, its structure must be tightened up. Let there be two passengers and a bus service where your fare buys you a lifetime pass. If one passenger rides free, the other is the sucker and must pay double fare. Each likes free riding best, riding the bus at single fare second best, walking third best and riding the bus at the double fare least. If both try to ride free, the bus service ceases. As they choose one course of action for a lifetime, and independently of one another, they will both choose to walk, i.e. with this structure, the free-rider problem will work as a (non-iterated) prisoners' dilemma and will be inherently inconsistent with the mutually preferred cooperative solution, i.e. a bus that runs.

The special "tight" feature, it will be remarked, is that free riding by one makes the fare unacceptably high for the other, leading to cessation of the service. In the "loose," general form of the free-rider problem, there are many passengers and another free rider may not greatly increase the fare payable by the others, so that it may be rational for them to carry on paying. There is no perceptible penalty attaching to the role of the sucker.

30. The allusions are to A. K. Sen's "Isolation, Assurance and the Social Rate of Discount," Quarterly Journal of Economics, 81, 1967.

31. Robert Paul Wolff, Barrington Moore Jr and Herbert Marcuse, A Critique of Pure Tolerance, 1965.

32. For Hegel, man is free; he is subjected to the state; he is really free when he is subjected to the state. The alternative way of completing the triad, of course, is that when he is subjected to the state, he is unfree; but few Hegelians would content themselves with such a simplistic version.

33. A relatively readable exponent of this Ableitung is Elmar Altvater. Several other contributors to the Berlin journal Probleme des Klassenkampfes employ a rather steamy prose through which, however, much the same contractarian motif of capital's general interest (general will?) can be discerned. They are criticized (cf. Joachim Hirsch, Staatsapparat und Reproduktion des Kapitals, 1974) for failing to show why and how capital's "general will" comes in fact to be realized in the historical process. This failure, if it is one, assimilates them even more closely to Rousseau. The criticism basically reflects the mystical character of contractarianism.

34. François Furet, Penser la révolution français, 1978. Both quotations are from p. 41.

35. This is a comfortable diagnosis which foreshadows, in its Deus ex machina character, the more recent one ascribing the doings of the Soviet state for a quarter-century to the Cult of the Personality.

36. J. H. Hexter, On Historians, 1979, pp. 218-26.

37. Apart from agricultural colonization in the south, Russian peasants also played a pioneer role, as principals, in industrial capitalism. Interestingly, many bonded serfs became successful entrepreneurs from the last third of the eighteenth century onwards, while remaining serfs. Cf. Richard Pipes, Russia under the Old Regime, 1974, pp. 213-15. If there is a pre-capitalist hindrance to playing the role of capitalist entrepreneur, being a serf must surely be it.

38. F. Engels, "The Origin of the Family, Private Property and the State," in Marx and Engels, Selected Works, my italics.

39. In "The Class Struggles in France," Political Writings, 1973, p. 71, Marx points unerringly at the risk the bourgeoisie runs under elective democracy with a broad franchise. The latter "gives political power to the classes whose social slavery it is intended to perpetuate... [and] it deprives the bourgeoisie... of the political guarantees of [its social] power" (my italics). Once more, the young Marx recognizes reality, only to leave his brilliant insight unexploited in favour of his later, unsubtle identification of ruling class and state.

40. V. I. Lenin, "The State and Revolution," Selected Works, 1968, p. 271.

41. In modern Marxist literature this has at least two alternative meanings. One corresponds to the "structuralist" view (notably represented by N. Poulantzas). Vulgarized, this view would hold that the state can no more fail to serve the ruling class than rails can refuse to carry the train. The state is embedded in the "mode of production" and cannot help but play its structurally assigned role. The other view would have the state choose to serve the ruling class for some prudential reason, e.g. because it is good for the state that capitalism should be prosperous.

Presumably the state could, if its interest demanded it, also choose not to serve the ruling class; this case, however, is not, or not explicitly, envisaged. Such neo-Marxist writers as Colletti, Laclau or Miliband, who have got past the mechanistic identification of state and ruling class (rejoining in this Marx, the young journalist), do not for all that allow for antagonism between the two, despite the rich array of possible reasons why the state, in pursuit of its interest should choose to turn against the ruling class (which, in Marxist theory, only "rules" because it "possesses" property, whereas the possession of arms is reserved for the state).

42. J. Foster, Class Struggle and the Industrial Revolution, 1974, pp. 47-8.

43. Cf. Murray N. Rothbard, Power and Market, 1970 and David Friedman, The Machinery of Freedom, 1973.

44. The political hedonist could be defined as a person who signs the social contract because he holds this particular expectation. It is not unreasonable to argue that in no version of contractarian theory is the social contract signed by anybody for any other reason than the expectation of a favourable pleasure-pain balance, properly interpreted. If so, the fact of agreeing to the social contract is alone sufficient to define the political hedonist.

45. This is known in the trade as Arrow's Impossibility Theorem, after its first rigorous statement by K. J. Arrow in Social Choice and Individual Values, 1951.

46. Jon Elster, "Sour Grapes," in Amartya Sen and Bernard Williams (eds), Utilitarianism and Beyond, 1982, has a penetrating discussion of what he calls adaptive and counter-adaptive preferences, and which bear some relation to what I call, in the present work, "addiction" and "allergy." He insists on adaptation and learning being distinct, notably in that the former is reversible (p. 226).

It seems to me difficult to affirm that the formation of political preferences is reversible. It may or may not be, and the historical evidence can be read either way. My intuitive inclination would be to regard it as irreversible, both in its adaptive and counter-adaptive manifestations. The question is of obvious importance if one form of government can, so to speak, "spoil the people forever" for another form of government.

Chapter 2. The Adversary State

47. Max Weber, Essays in Sociology, 1946, p. 78.

48. An application of this particular principle to the special case of the legitimacy of the use of force between states is Machiavelli's doctrine that war is legitimate when it is necessary, the state itself being the only possible judge of necessity. For illuminating remarks on the enforcement by states of the monopoly of war-making in the fifteenth and sixteenth centuries, cf. Michael Howard, War in European History, 1976, pp. 23-4.

49. It may be reasonable to suppose that there is some probabilistic feedback from an independent judiciary yesterday to good government and hence the toleration of an independent judiciary today, a virtuous cycle running counter to the vicious circle, if there is one, of state power changing society and the changed society providing the state with yet more power over itself. Clearly, however, the virtuous cycle has little stability; if it is interrupted by bad government for whatever reason, the independence of the judiciary is soon taken care of.

50. Gilbert Ryle's famous term for referring to the whole when we mean the part, as in "The Russian occupation forces raped your sister."

51. The Oxford History of England, vol. V, Mary McKisack, The Fourteenth Century, 1959, p. 413.

52. Donald V. Kurtz, "The Legitimation of Early Inchoate States," in Henri J. M. Claessen and Peter Skalnik (eds), The Study of the State, 1981.

53. Benjamin Ginsberg, The Consequences of Consent, 1982, p. 24, his italics.

54. Ibid., p. 26, my italics, cf. also pp. 215-6.

55. Chadwick did not think that he and his fellow civil servant pioneers were empire-building, promoting their own pet policies, fulfilling their own (selfless) ends or working for the (selfish) interests of a self-serving bureaucracy. No doubt sincerely, he felt that they were neutrally administering the law and thus, but only thus, serving the public. He did not see that they were largely making the law. In fact, he considered attacking a civil servant to be like hitting a woman—the analogy presumably residing in their common defencelessness!

56. Sir Ivor Jennings, Party Politics, 1962, vol. III, p. 412.

57. The estimates are those of G. K. Fry in his The Growth of Government, 1979, p. 2.

58. Ibid., p. 107.

59. Leszek Kolakowski, the philosopher and eminent student of Marx's thought, holds that civil society cannot have structure without private ownership of the means of production (Encounter, Jan. 1981). If so, the democratic drive (noted by Tocqueville) to break down structure, bypass intermediaries and appeal to one-man-one-vote, and the socialist drive to abolish private ownership of capital, are more closely related than is apparent.

60. Michael Oakeshott, "Political Education," in Peter Laslett (ed.), Philosophy, Politics and Society, 1956, p. 2.

61. For example, it could be stipulated that no arrangement must be tinkered with unless doing so produced a greater gain in utility than the loss, if any, entailed in the act of tinkering, where utility would include the value that one may attach to the mere non-disturbance of an existing arrangement in addition to its utility in the customary, narrower sense.

62. Frank Hahn, "On Some Difficulties of the Utilitarian Economist," in Amartya Sen and Bernard Williams (eds), Utilitarianism and Beyond, 1982, pp. 195-8, has a particularly lucid exposition of this question. Cf. also P. J. Hammond, "Utilitarianism, Uncertainty and Information," in the same volume.

63. It is only fair to remind the reader that Sir Karl Popper, in his Poverty of Historicism, 2nd edn, 1960, approves of piecemeal (at least as opposed to large-scale) "social engineering" on the grounds that the piecemeal approach allows being "always on the look-out for the unavoidable unwanted consequences" (p. 67). Being on the look-out is certainly the proper attitude. It is effective when the consequences are easy to identify and quick to appear; it is not when they are not.

64. William J. Baumol, Welfare Economics and the Theory of the State, 2nd edn, 1965, p. 29.

65. A. V. Dicey, Lectures on the Relation between Law and Public Opinion in England during the Nineteenth Century, 1905.

66. Elie Halévy, The Growth of Philosophical Radicalism, p. 495, quoted by Lord Robbins, Politics and Economics, 1963, p. 15; my italics.

67. A rigorous exposition of the types of interpersonal comparisons required for various types of "social welfare functions" is provided by K. C. Basu, Revealed Preference of Governments, 1980, ch. 6.

I have borrowed the title of this perfectly dispassionate book to head the present section because its unintentional black humour conveys so well what I take to be the irreducible core of the utilitarian solution. The only preference which is ever "revealed" in the maximization of social welfare is that of the maximizer, of the holder of sovereign power over society.

68. A non-unanimous (e.g. majority) agreement to perform interpersonal utility comparisons in certain ways, would confer the same logical status upon the utility-maximizing quality of the public action selected on the basis of such comparison, as upon those directly selected, without benefit of any interpersonal comparisons, by any sort of non-unanimous agreement (vote, acclamation or random choice).

69. In the Liberal Legislation and Freedom of Contract, 1889, Green takes off from ground next door to the Manchester School, and lands on the Hegelian cloud. Property arises out of the conquest of nature by unequal individuals, hence it is rightly unequal. It is owed to society because without the latter's guarantee it could not be possessed. All rights derive from the common good. There can be no property rights, nor any other rights, against the common good, against society. The general will recognizes the common good.

The individual's ownership of property, then, must be contingent on the general will approving of his tenure, a result which is as much Jacobin as it is Hegelian. Green did not make this conclusion explicit. His successors increasingly do.

70. "Owning" plainly excludes "possessing de facto but unlawfully," and "usurping."

71. I find "personal endowments" better to use than the "natural assets" employed among others by Rawls, because it begs no unintended question of how a person has come by his endowments, "naturally" or not—whether he was born with them, worked for them or just picked them up as he went. In my scheme, personal endowments differ from capital only in that they are not transferable; "finders are keepers" rules out questions about their deservedness and "provenance."

72. Cf. Brian Barry, The Liberal Theory of Justice, 1973, p. 159, for the suggestion that there are enough people who enjoy, or would enjoy, doing professional and managerial jobs to enable the pay of these jobs to be brought down to that of teachers and social workers.

73. It is tempting to ascribe the early liberal respect for property to the Lockean tradition in Anglo-American political thought, with its close identification of property and (political) liberty. In a different culture, a different explanation would have to be found: why did the Abbé de Sieyès, a liberal in the Dewey mould who did not care a fig about Locke, think that everything should be equal except property?

74. It is a gross fallacy to suppose that the rule "it is public opinion, or the majority of voters, who shall determine whether somebody is a Jew" is morally or rationally of a superior order to the apocryphal Hitler rule. Note, however, that "the majority of voters shall determine whether a contract is free, and whether distributive shares are just" is widely accepted by the general public.

75. I am indebted to I. M. D. Little for the suggestion that "endless iteration" is not the unavoidable fate of this social process. Convergence towards a state of rest is logically just as possible. Nor is there an a priori presumption that endless iteration is more likely to be the case. However, the historical experience of actual societies supports the hypothesis of endless iteration and does not support that of convergence towards an equilibrium where no new state commands, prohibitions and aids are forthcoming.

76. The reader may think that between the above lines there lurks a dim shadow of some "social trade-off between justice and liberty" which, side by side with the other trade-offs between pairs of society's plural ends, is at the base of "pluralist" political theory. No such shadow is intended. As I fail to see how a society can be thought of as "choosing," I would object to a social trade-off intruding its woolly head here.

77. F. A. Hayek, The Constitution of Liberty, 1960, p. 444, my italics. The quotation repays study. First, we learn that what may have been true then is not true now that we control the state. Second, we are encouraged to embrace unintended effects, to make them into intended ones, positively to will second, third and nth rounds of state expansion and deliberately to push along the process of iteration engendered by the self-feeding feature of these effects. Used as we are to the contemporary state being overwhelmed by demands for "extending its functions" and "enlarging its operations" to help deserving interests, it may well strike us as funny that Joe Chamberlain saw a need for whetting people's appetites for the state's benefactions.

78. The corollary could, for example, take this form: "The stronger the blows it can deliver to smash the class enemy, the better the state of the dictatorship of the proletariat can fulfil its historic function." Needless to say, the liberal ideology is quite unready to accept a corollary of this sort.

79. Benjamin R. Barber, "Robert Nozick and Philosophical Reductionism," in M. Freeman and D. Robertson (eds), The Frontiers of Political Theory, 1980, p. 41.

Chapter 3. Democratic Values

1. I am alluding to S. M. Lipset's frequently quoted cri de coeur (Political Man, 1960, p. 403), that democracy is not a means to the good life, it is the good life.

2. Notably by the state drafting potential muggers into the army and leading them to pillage rich foreign towns in the manner of Bonaparte in 1796. The conflict arises later, in the follow-up: Bonaparte soon came to require, as he put it, "an annual revenue of 100,000 men" ("une rente de 100,000 hommes").

3. Cooperative solutions are best understood as outcomes of positive-sum games with no losers. A game, however, may have losers as well as gainers and yet be considered to have a positive sum. In helping some by harming others, the state is supposed to be producing a positive, zero or negative sum. Such suppositions in strict logic imply that utilities are interpersonally comparable.

It may be said, for instance, that robbing Peter to pay Paul is a positive-sum game. If we say this, we affirm that the marginal utility of money to Paul is higher. Instead of saying this, it is perhaps less exacting to assert that it was only just or fair to favour Paul; that he deserved it more; or that he was poorer. The last argument may be an appeal either to justice or to utility, and thus has, like fudge, the strength of shapelessness.

4. Is the liberal intellectual better off in the state of nature, or under state capitalism? If he just cannot tell, and if he is the sort who must nudge society, which way should he nudge it?

5. A simple, undifferentiated community in this context means not only that all its members are equal (before God, before the law, in talents, influence, wealth or other important dimensions in which equality is customarily measured), but that they are all about equally concerned by any of the issues which come up to be democratically decided on behalf of the community. A community of equals in the customary loose sense may have members of different occupations, sex and age groups. They will not be equally concerned by issues which impact occupations or sex or age groups differentially; most issues do.

6. It is an interesting fact that German and French company law make important provision for "blocking minorities" (Sperrminorität, minorité de blocage), while British company law and American corporation law do not.

7. Cf. Thomas C. Schelling, The Strategy of Conflict, 2nd edn, 1980, p. 19. For Schelling, the secret ballot protects the voter. This is undoubtedly true. However, it is also true that it transforms him into a bad risk. Corrupting, bribing him becomes a sheer gamble.

8. Majority rule, with votes cast entirely according to interest, would inevitably produce some redistribution, hence some inequality in a society of equals. In a society of unequals, there would likewise always be a majority for redistribution. As Sen has remarked, a majority could be organized for redistribution even at the expense of the poor. "Pick the worst off person and take away half his share, throw away half of that, and then divide the remainder among the rest. We have just made a majority improvement." (Amartya Sen, Choice, Welfare and Measurement, 1982, p. 163.) Competition, however, ensures that the majority has more attractive, richer redistributive alternatives to vote for, i.e. that redistribution will not normally be at the expense of the poor. Given the choice, egalitarian redistribution would be preferred to the inegalitarian, because the potential pay-off is always greater in rich-to-poor than in poor-to-rich redistribution.

9. Wiser heads would perhaps judge me foolhardy for advancing a definition of liberalism, considering that "it is an intellectual compromise so extensive that it includes most of the guiding beliefs of modern Western opinion." (Kenneth R. Minogue, The Liberal Mind, 1963, p. viii, my italics.)

10. Liberals do not espouse these goals today because they expect the majority of people to espouse them tomorrow. Rather they expect the majority to do so because these goals are valuable. Either reason would be sufficient for boarding the bandwagon before it started rolling. The second reason, however, tells liberals that the bandwagon is morally worthy of being boarded.

11. R. H. Tawney, Equality, 1931, p. 241, italics in text.

12. Contrast the diagnosis of Tocqueville: "on semblait aimer la liberté, il se trouve qu'on ne faisait que haïr le maître." (C. A. H. C. de Tocqueville, L'ancien régime et la révolution, Gallimard, 1967, p. 266. English translation, The Ancien Regime and the French Revolution, 1966.)

13. Tawney, Equality, p. 242, my italics.

14. In his classic Origins of Totalitarian Democracy (1960), J. L. Talmon, having postulated that there is now a liberal and a totalitarian democracy but that at one time these two were one, is at a loss to locate the schism. He looks for it mainly in and around the French Revolution without claiming that he has found it. Perhaps it is impossible to find the schism; perhaps there never was one.

Talmon seems implicitly to lean to this view in characterizing democracy as a fundamentally unstable political creed, a potential monster which must be firmly embedded in capitalism to be safe. He does not address the question of how this can be accomplished. As the reader who got this far will have gathered, it is part of my thesis that no such thing is possible. Democracy does not lend itself to be "embedded in capitalism." It tends to devour it.

15. Lord Acton, Essays on Freedom and Power, 1956, p. 36.

16. There must be an "out" for the man who likes it in boot camp; some prisoners, too, like the relief from responsibility and are said to prefer inside to out. To accommodate this, we can always have recourse to the dialectic understanding of freedom. The man under military discipline attains real freedom. Civil society governed by the state is a prerequisite of genuine freedom as opposed to the virtual freedom offered by the state of nature. Many people actually do use such arguments.

17. Karl R. Popper, The Open Society and its Enemies, 1962, vol. II, pp. 124-5, my italics.

18. Ibid., p. 124.

19. For a different and much more complete formulation of this point, cf. Robert Nozick, Anarchy, State and Utopia, 1974, pp. 263-4.

20. Other liberal arguments about redistribution are not positive but normative; they deal with values, not facts; their recommendations are supported by appeals to social justice rather than social utility.

21. M. Friedman and L. J. Savage, "The Utility Analysis of Choices Involving Risk," in American Economic Association, Readings in Price Theory, 1953, p. 88. First published in Journal of Political Economy, 56, 1948.

22. J. Rawls, Theory of Justice, 1972, p. 156. The second and third "features" invoked by Rawls to explain why his people do what they do mean, respectively, that a rise in his "index of primary goods" (which is stated to be co-variant with his income tout court) would not make the Rawls man significantly better off, and a fall would make him intolerably worse off.

23. "Not even the chooser himself knows his preference until he is confronted with an actual choice, and his understanding of his own preferences is to be doubted unless he is in a real choice situation." (Charles E. Lindblom, Politics and Markets, 1977, p. 103.) If this stand looks a little too severe with regard to the simplest, tea-rather-than-coffee preference relation, it is no more than properly cautious when applied to whole modes of life.

24. I say "other" futures markets to stress that financial markets are ipso facto markets in futures, e.g. in future interest and dividends.

25. Thus Robert Wolff in Understanding Rawls, 1977, p. 173: "A full belly of beer and pizza requires very little money, but a cultivated, tasteful, elegant lifestyle, rationally managed in order to 'schedule activities so that various desires can be fulfilled without interference' costs a bundle."

26. F. Y. Edgeworth, The Pure Theory of Taxation, 1897, reprinted in Edgeworth, Papers Relating to Political Economy, 1925, p. 114, my italics.

27. Rawls's principles serve to help design "practices" or "institutions" which "determine (the) division of advantages" and underwrite "an agreement on the proper distributive shares" (A Theory of Justice, p. 4). (Page references in parentheses are all to this work.) He considers institutions on a high level of abstraction and generality, but it is clear, either from the context (esp. pp. 278-83) or from analysis of his arguments that the one institution that has "bite" and that can "underwrite" anything at all, is the state.

28. There is no ground for supposing, at this stage, that all will. The position does not make for unanimity.

29. I believe it is fair to interpret Rawls as meaning that the social contract is a unanimous (omnilateral) agreement on principles for a state which will, by overriding ordinary (bilateral) contracts whenever the principles so require, ensure a just distribution. The state of nature is a network of ordinary contracts giving rise to a "natural distribution" with no "institutions" (no state) for making it conform to a conception of justice. Aspects other than the distributive aspect of justice do not seem to enter into the distinction between "social contract" and "state of nature" in an important and explicit manner. A society equipped with a state concerned with the preservation of life and property only, would from the Rawlsian point of view still be a society in the state of nature. As he would be the first to admit, Rawls's social contract descends from Rousseau and not from Hobbes.

30. Richard Miller, "Rawls and Marxism," in Norman Daniels (ed.), Reading Rawls, 1974, p. 215, argues that willing cooperation can be maintained "for centuries" by ideological institutions and the coercive apparatus of the state (paid for out of the workers' taxes!) without any social contract about principles of distributive justice.

Interpreted in a Marxist framework, Rawls's better-endowed would agree on better-than-the-market terms for workers when they feared that the centuries referred to by Miller were drawing to their historically inevitable close, and reformist remedies were the order of the day. Although they would, I believe, be hastening their demise, and be suffering from "false consciousness" in choosing the means to their end, the argument is at least genuinely based on self-interest. Rawls's argument altogether fails to establish a basis in self-interest.

31. Nozick, Anarchy, State and Utopia, pp. 192-5.

32. In fairness to Rawls, he provides an account (para. 9) of what moral philosophy is about, which (if correct) would make his stand right end up. His parallel with the theory of syntax is revealing. The way people speak is the source of knowledge about language. People's moral judgements are the source of substantive knowledge about justice. If it is democratic to like equality, this tells us something about justice—though nothing as crude is implied as that the principles of justice derive from opinion polls.

33. "Strong" preference at that; to justify the inequality, even the least advantaged must be better off than they would be under equality, and other groups, strata or classes (or whatever representative men represent) must be better off than the least advantaged, for otherwise there would be no inequalities to justify. (I take it that people always "prefer" to be "better off" and prefer only that.) The two formulations "inequalities must be to the advantage of every representative man" and "of the least advantaged representative man" respectively, become equivalent vis-à-vis equality as the alternative, but not vis-à-vis the general case of all possible distributions.

This is easily seen by comparing how three representative men, A, B and C fare under three possible distributions, o, p and q; total income to be distributed increases with inequality, which is the case the "difference principle" was invented for:

A 2 5 7
B 2 4 5
C 2
  6 12 15

Everybody is better off in both p and q than in o (equality), but only A and B are better off in the more unequal q than in the less unequal p; the additional inequality of q is of no benefit to the least advantaged C, and he is merely indifferent between them (being neither envious nor altruistic). Hence q will be ruled out as violating at least one of the principles of justice, though it would yield three more primary goods at nobody's expense.

This perverse result of the difference principle has been spotted early on by A. K. Sen, Collective Choice and Social Welfare, 1970, p. 138n. Rawls, ever conveniently, can rule it out by his strange assumption of "close-knitness," under which the improvement in the situation of A and B when placed in q rather than p, entails an improvement in the situation of C also (and vice versa). In other words, "close-knitness" asserts that p and q cannot both be possible, so we do not have to worry about which would be preferred and which is just.

Should close-knitness fail, Rawls has recourse to a more complex "lexicographic" difference principle (p. 83), under which inequalities are permitted if they maximize the situation of the next-least-advantaged (in this example, of B) once that of the least advantaged (C) cannot be further improved.

Close-knitness is very hard to make sense of in a scheme where the difference principle requires that some people be made worse off so the least advantaged can be made better off (e.g. by redistribution of income). Taxing A makes C both better off (he gets a transfer payment) and worse off (as close-knitness requires).

34. If this were so, it ought surely to be taken by nations opposed to Moscow as a potent foreign policy reason for not increasing aid, in order to hang all these teeming millions around Moscow's neck.

35. I.M. D. Little, "Distributive Justice and the New International Order," in P. Oppenheimer (ed.), Issues in International Economics, 1981.

36. Among such unintended effects, a fairly obvious one is the growth of the "black economy" and of voluntary unemployment. These, in turn, set off a self-reinforcing tendency to place an ever-weightier burden on the ever-shrinking "legal" and gainfully employed proportion of society which lets the "background institution" batten on it, instead of its battening on the "background institution."

However, other less conspicuous unintended effects may be more powerful in the long run. I am chiefly thinking of the ill-understood ways in which the characteristics of a society change as the behaviour of one generation slowly adapts to the kind of "background institution" implanted by the preceding generation. The lagged sequence is, in principle, capable of bringing about a steady (or why not a variably paced, or accelerating?) degeneration both of society and of the nature of the state. It may, of course, be impossible ever to agree on objective criteria for telling that such degeneration is going on, let alone for judging its pace and the no doubt very involved functional relations controlling it.

37. John Rawls, "Reply to Alexander and Musgrave," Quarterly Journal of Economics, 88, 1974.

38. Cf. the diagnosis of Benjamin Barber, "the instrumental status of primary goods is compromised" (Benjamin Barber, "Justifying Justice: Problems of Psychology, Measurement and Politics in Rawls," American Political Science Review, 69, June 1975, p. 664). His reason for finding this, though, is different from mine.

39. James Fishkin, "Justice and Rationality: Some Objections to the Central Argument in Rawls's Theory," American Political Science Review, 69, 1975, pp. 619-20.

40. Formally a believer faced with the alternatives of going to heaven or to hell (and who knows neither purgatory, nor degrees of heaven from first to seventh), would be exercising rational choice by opting to go to heaven. However, the surrounding assumptions render the choice problem trivial, or rather phoney.

41. This must obviously remain the case no matter how much Rawls's first principle (equal liberty, whatever that may mean) and the second part of his second principle (positions open to talents) restrict the set of feasible distributions by hindering the occurrence of very small and very large incomes (pp. 157-8)—a hindrance we may well admit for purposes of argument, without conceding that Rawls has established its likelihood.

42. For completeness, we may add that if maximin dominates equality, it must also dominate income-distributions intermediate between maximin and equality, i.e. all distributions more egalitarian than itself.

43. A frequently committed howler is to confuse the mathematical expectation of utility with the utility of the mathematical expectation. (The coincidence of the two would permit the statement that the marginal utility of income was constant.) A related howler is to double-count the utility function and the attitude to risk, as in "he does not maximize utility because he has an aversion to risk," as if risk-aversion were not just a more colloquial term for characterizing the form of his utility function. Cf. Rawls's version of the argument in favour of maximizing average utility: "if the parties are viewed as rational individuals who have no aversion to risk" (p. 165, my italics), "prepared to gamble on the most abstract probabilistic reasoning in all cases" (p. 166, my italics), but not otherwise, they will maximize the mathematical expectation of utility calculated with the help of Bayesian probability. But in behaving at all sensibly, they must be doing this anyway! If they are averse to risk, they will take one gamble and if they are not, they will take another. If "refusing to gamble" is purported to be rational, it must be capable of being described as the gamble where the sum of the utilities of the possible outcomes, multiplied by their probabilities (which are all zero except for one outcome whose probability is unity), is the highest. It is virtually impossible so to describe the refusal to accept the very small probability of losing a very small sum for the sake of the remaining very high probability of gaining a very large sum, i.e. the requirement is not an empty one.

Probability, as the context should have made clear, is the "subjective" kind of which it is meaningless to say that it is unknown. Only "objective," frequency-type probability tolerates being described as "known" or "unknown," and it tolerates it badly at that!

There is one other way in which people can be represented as "refusing to gamble": we can suppose that they just sit down and cry.

44. This is analogous to the "fixed-sum game" of dividing a cake among n players where the nth player does the dividing and the n-1 players do the choosing. The nth player is sure to be left with the smallest slice. He will try to make it as big as possible, i.e. divide the cake into equal slices. This is his dominant strategy. If the n-1 players are blindfolded, n has no dominant strategy.

45. With people knowing no more than that every lot has some non-zero probability of being drawn and all the lots together have a probability of 1 (i.e. one, and only one, of the lots is sure to be drawn), any further logical inference being "discounted" (which is how Rawls expects his parties to reason) it is hard to see what will make their choice determinate, let alone unanimous. The plausible hypothesis seems to be that they will behave like particles in quantum mechanics, and never (short of eternity) reach agreement on a social contract.

If they were allowed to grasp a less inchoate conception of probabilities, e.g. if they could apply the principle of insufficient reason and suppose that failing any indication to the contrary, they were as likely to draw one lot as another, they would have a better chance of reaching agreement on a distribution—which would presumably be more inegalitarian than the one ruled by the maximin "strategy."

46. Unlike poker or business where a previous loss tends to worsen present chances, certain other risky choices may not be adversely affected. For instance, a low lifetime stipend may not worsen the odds against marrying the right person or having good children.

The very question whether Swiss families are happier than Russian ones is fatuous, although the person who has agreed to draw lots for a place in Russian society does not get a second chance to draw lots for a place in Swiss society.

47. The prudent man's finding that risk-taking is difficult, especially if it is a risk of losing your stake, is not unlike Sam Goldwyn's celebrated profundity that forecasting is difficult, especially if it is about the future.

"Refusing to gamble" is itself a gamble, and "not making forecasts" is a particular forecast as long as it is unavoidable for today's future to become tomorrow's present. You do not avoid exposure to it by not adjusting to what it might or might not be like. Your adjustment may not be successful. Not adjusting is even less likely to be successful.

48. Anyone who has had his investments handled by a bank trust department is probably familiar with the phenomenon of "managing wisely but not well." Anyone who has observed the functioning of financial markets dominated by institutions rather than by principals, knows what it means that paid portfolio managers "do not want to be heroes" and "do not stick their necks out," buying when everybody else is buying and selling when everybody else is selling.

49. If parents thought that children were going to grow up less able, less provident and less resilient than themselves, they might consider that a welfare state would be genuinely better for them than an inegalitarian state. The parents might then want to install it straightaway, either because they could not trust their children to recognize their best interests, or because the choice of state had to be made right now for all posterity. However, Rawls does not use this line of paternalistic argument.

50. Also called "Aristotelean equality." If the extension is denied, the rule becomes "equal pay for equal work as well as for unequal work," which seems contrary to the intention of the proposer. If he did not want proportionality, he would have proposed "one man, one pay" regardless of the quantity or quality of the work.

51. K. Marx, "Critique of the Gotha Programme," 1875, in K. Marx and F. Engels, Selected Works in One Volume, Moscow, 1968, pp. 320-1, italics in text.

52. F. Engels, "Letter to A. Bebel," in Marx and Engels, Selected Works, p. 336, italics in text.

53. Isaiah Berlin, "Equality," Concepts and Categories, 1978, pp. 82-3.

54. Ibid.

55. Bernard Williams, "The Idea of Equality," in P. Laslett and W. G. Runciman (eds), Philosophy, Politics and Society, 1962.

56. For example, the division of a God-given cake among people who are absolutely equal to each other; they are equally God-fearing, have equal deserts, equal needs, equal capacities for enjoyment, etc., to mention only those "dimensions" of comparison which are usually thought to be relevant in the "division of the cake," though there are obviously many others.

57. Cf. Douglas Rae et al., Equalities, 1981. Rae and his co-authors, very sensibly, want us to ask, not "whether equality" but "which equality?" (p. 19). They develop a "grammar" for defining and classifying equalities, and to provide some light relief, by permutation find no less than 720 sorts of equality (p. 189, note 3). However, they adopt the position that one situation can often, if not always, be diagnosed as more equal than another, i.e. that at least a partial ordering of social situations is possible, according to how equal they are. My view is that ordering situations characterized by alternative equalities is inevitably done according to some other, often occult, criterion (e.g. justice or interest) and cannot be performed according to the criterion of equality itself.

58. Some of the same effect is achieved, in a totally unintended fashion, under one-man-one-vote by the phenomenon of electoral non-participation, providing it is correct to assume that those who abstain are less concerned in their legitimate interests by the result of the election than those who do vote. The unintended effect could be transformed into an intended one by making it difficult to vote. The Australian law punishing abstention by a fine should, of course, have the obverse effect.

"Concern" is an unsatisfactory explanation of why people bother to vote, but I am unaware of any more satisfactory rival ones; cf. the highly contrived "minimum regret" rule proposed by Ferejohn and Fiorina. For the basic statement that voting is irrational, see Anthony Downs, An Economic Theory of Democracy, 1957, p. 274.

Abstention is, however, only a rough-and-ready approximation to the rule of greater-concern-more-vote. In this respect, Professor Lipset's understandable mistrust of mass participation might find only very partial reassurance. For, although the extreme arbitrariness of one-man-one-vote is mitigated by the inclination to abstain of those who do not feel very concerned (and although their relative unconcern is a subjective feeling which need not coincide with the realities of their situation—perhaps they should be concerned) the fact that the unconcerned could vote if they felt like it, will still weigh in the political balance.

Suppose, for argument's sake, that it is the lumpenproletariat which habitually abstains. An electoral programme designed to attract the majority of the electorate minus the lumpenproletariat would always run the risk of being defeated by one designed to win over the majority of an electorate including the lumpenproletariat, in case the latter were so roused that it did bother to go to the polls, after all. Hence, all competing programmes might take greater account of it than would be indicated by the paucity of the votes it habitually casts, and indeed by its apparent unconcern.

59. This is Nozick's term for a distribution characterized by dependence on a single variable (as well as for a set of distributions which is made up of a small number of such subdistributions), cf. Nozick, Anarchy, State and Utopia, p. 156. If all income from employment depended on the variable "work," under the rule of proportional equality "equal pay for equal work, more pay for more work," and all other income on one other variable, the distribution of total income would be "patterned." If many contradictory rules are simultaneously at work and some incomes do not obey any obvious rule, the total distribution is "patternless"; at least this is my reading of Nozick's use of this very suggestive and serviceable term.

60. "Modern capitalism relies on the profit principle for its daily bread yet refuses to allow it to prevail. No such conflict, consequently no such wastes, would exist in socialist society.... For as a matter of common sense, it would be clearly absurd for the central board to pay out incomes first and, after having done so, to run after the recipients in order to recover part of them" (Joseph A. Schumpeter, Capitalism, Socialism and Democracy, 5th edn, 1976, pp. 198-9).

61. F. A. Hayek, The Constitution of Liberty, 1960, p. 93.

62. Commutative justice has an agreed procedure, issuing in judgements of courts of law, for deciding which "demands of justice" should be granted. The demands of social justice, however, are not adjudicated in this way. Nobody's judgement in social justice entails a moral obligation for somebody else to have it executed.

63. Hal R. Varian, "Equity, Envy and Efficiency," Journal of Economic Theory, 9, September 1974. For a development of this approach by a widening of the criterion of non-envy cf. E. A. Pazner and D. Schmeidler, "Egalitarian Equivalent Allocations: A New Concept of Economic Equity," Quarterly Journal of Economics, 92, November 1978.

64. Nozick, Anarchy, State and Utopia, pp. 239-46.

65. Ibid., p. 245.

66. These were Alfred Marshall's highly suggestive terms for distinguishing between what our current jargon calls "comparative statics" and "dynamics."

End of Notes.

Notes: Chapters 1-3 Notes: Chapters 4-5

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