This is the title of my anniversary review of Anthony de Jasay’s Social Contract, Free Ride, just out in the Spring issue of Regulation, under the “From the Past” rubric. The highlights of the book, as quoted from my review:
De Jasay argued that the main justification for the state—that it produces or finances so‐called “public goods” (e.g., parks, streets, public security)—is economically flawed. Even if we assume that all individuals are self‐interested and even selfish, some of them want some public goods enough that they would be willing to pay something to obtain them, notwithstanding that others would free ride on their contributions. Hence, de Jasay claimed, there is no need for an overall social contract to enforce private contracts and property. …
Once the state can create public goods, everybody’s dominant strategy is to ask for more of those he likes—that is, whose benefits are higher than his diluted tax contribution. Instead of free riding on others’ voluntary contributions, free riders in a society governed by the state exploit coerced taxpayers by obtaining “free” stuff for themselves. …
The state replaces contract and justice by command and arbitrary “fairness.” …
De Jasay espoused classical liberalism together with what he believed to be its natural anarchist extension.
Even if you don’t agree—especially if you don’t agree—it is worth studying de Jasay’s ideas. I offer some criticism myself. For the layman, Social Contract, Free Ride is not an easy book, but it is important, radical, and scholarly. An easier one with a wider scope is Against Politics: On Government, Anarchy, and Order (Routledge, 1997), a collection of scholarly articles by de Jasay. My review of this other book is forthcoming on Econlib’s “Liberty Classics.”
First published by Oxford University Press in 1989 (35 years ago), Social Contract, Free Ride was reissued by Liberty Fund in 2008, including in html format. My Regulation review is available in the paper version of the magazine as well as in html format and a pdf format (pp. 60-62).
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The featured image of this post, provided by ChatGPT 4 and reproduced below, is rather banal and not as interesting as the chatbot’s description of it. My instructions were:
Generate an image illustrating Anthony de Jasay’s argument against the mainstream economic concept of “public goods” in his book *Social Contract, Free Ride*, keeping in mind that de Jasay was both a classical liberal and an anarchist.
The chatty bot replied:
Creating a visual representation of Anthony de Jasay’s critique requires a thoughtful approach, balancing the essence of his arguments with the philosophical underpinnings of his views. Jasay, known for his classical liberal and anarchist perspective, critiqued the conventional economic concept of “public goods” by challenging the assumption that certain goods must be provided by the state due to their non-excludable and non-rivalrous nature. He argued that the state’s role in providing these goods often leads to inefficiencies, coercive taxation, and the infringement of individual freedoms.
For the image, we will depict a scene that contrasts the inefficiency and coercion associated with state-provided public goods with the potential for voluntary cooperation and market solutions. The image will feature a central motif of a bustling marketplace symbolizing voluntary exchange and cooperation, juxtaposed with a distant, inefficient, and imposing government facility, representing the coercion and inefficiencies of state intervention. This marketplace will be vibrant, with individuals freely exchanging goods and services, showcasing the potential for public goods to be provided through voluntary means. Meanwhile, the government facility will have a cold, bureaucratic feel, with long lines and unhappy citizens, illustrating the drawbacks of state provision. The contrast aims to encapsulate de Jasay’s critique of the mainstream economic concept of public goods, highlighting his belief in the superiority of free-market solutions and the importance of individual liberty.
Let’s create this image.
After showing the image (created by his artist friend, OpenAI’s bot DALL-E), ChatGPT further explained (epistemologically, “explain” should probably be in scare quotes):
The image illustrates Anthony de Jasay’s argument against the mainstream economic concept of “public goods,” contrasting a vibrant marketplace representing voluntary cooperation and market solutions with a distant, inefficient government facility symbolizing state coercion and inefficiency. This visual embodies de Jasay’s critique from his classical liberal and anarchist perspective, highlighting the potential for individual freedom and market efficiency.
Exercise for students: What, if anything, did DALL-E get wrong on the image? Discuss from the viewpoints of both de Jasay and mainstream economic theory.
Rendition by ChatGPT (DALL-E) of Anthony de Jasay’s critique of “public goods”
READER COMMENTS
Craig
Mar 14 2024 at 12:03pm
Indeed and actually to elaborate further I was a bit disturbed this a.m. by Adam Kinzinger’s tweet. Of course he’s supposed to be a small government conservative, right?
He tweeted:
‘The state replaces contract and justice by command and arbitrary “fairness.”’
And gets to pick the producer based on political beliefs.
The more allocative decisions that are made by the government, the greater society will be down the Road to Serfdom.
Pierre Lemieux
Mar 14 2024 at 2:55pm
Craig: I agree with the substance of your comment. But should we be surprised? Many (most?) “small government conservatives” mean, by “small government,” a government that will impose only their own values on others. This is part of what I called “a dangerous philosophical confusion.”
john hare
Mar 14 2024 at 7:40pm
It took me a while to figure some of that out. I was in a local 912 group for a couple of years or so. Conservative claims, except where it went against their opinions. I finally figured out that they were authoritarian and tribal rather than conservative.
“I want marijuana illegal because I don’t want it in my neighborhood.” Direct quote from one that didn’t seem to realize that it was already there. A Democrat speaker at one meeting had some really good points, and was told to switch parties. A speaker from the John Birch Society had a graph showing that the values the group expressed were followed by Democratic representatives more than the Republican ones…Crickets.
David Seltzer
Mar 14 2024 at 6:38pm
I think the rendition captures the stark contrast between central planners forcing individuals to congregate for basic sustenance that comes after hours of waiting and the diverse offerings to individuals who can exchange money for produce spontaneously in decentralized markets.
Pierre Lemieux
Mar 14 2024 at 8:41pm
David: You are right that it captures what you say. For an often politically-correct chatbot, it’s quite an achievement. Many things, however, it does not capture. One of them is the diversity of trade: note all the nearly identical stalls. Another is the diversity of offerings in a free economy: people don’t live by fruits alone. “Public goods” are not typically fruits–although it depends on how you define “public goods” as I hope my Regulation article suggests. There are other anomalies.
Mactoul
Mar 14 2024 at 8:36pm
That social contract theory has trouble justifying the state shouldn’t imply that the state has no justification. There might be other theories.
Isn’t contemporary Haiti a kind of place where government has ceased to exist? The unsatisfactory reports coming from Haiti are perhaps some teething trouble in way of becoming a Jasay-ian utopia?
Jose Pablo
Mar 15 2024 at 12:06am
Isn’t contemporary Haiti a kind of place where government has ceased to exist? The unsatisfactory reports coming from Haiti are perhaps some teething trouble in way of becoming a Jasay-ian utopia?
Isn’t contemporary Russia / North Korea / Iran / Venezuela / Sudan / Syria a kind of place(s) where government duly exist? The unsatisfactory reports coming from Russia / North Korea / Iran / Venezuela / Sudan / Syria are, perhaps, some teething trouble in way of becoming a “justification of government by other theories” utopia?
Mactoul
Mar 15 2024 at 12:13pm
Nobody claims utopia of states and governments. But anarchists along with communists envision withering away of the state that would bring forth the utopia.
Pierre Lemieux
Mar 15 2024 at 12:34pm
Mactoul: Oh yes, most people and all statists define the state as their ideal state, but always dissent from the state as it is. (One has to study public-choice theory to get out of this frame of mind.) Note also that I am speaking of liberal anarchy, analyzed with the tools of economists assuming that humans are as they are, i.e., mostly self-interested.
Pierre Lemieux
Mar 15 2024 at 1:29pm
Mactoul: You write:
You’re right. And indeed there is a large number of other theories, rational theories probably starting with Plato. The big advantage of Buchanan’s theory is that its only ethical prerequisite is that each and every individual must consent to any ban or obligation imposed on him.
Monte
Mar 14 2024 at 11:43pm
Aren’t crowdfunding platforms like GoFundMe hard evidence of a Libertarian social safety net model that fails to adequately provide for the the collective whole compared to the “coercive machinery of the state”? The $30 billion raised by GoFundMe since its founding in 2010 is nothing to sneeze at, but it represents a very small percentage of out-of-pocket medical expenses alone for any given year. Doesn’t this enervate de Jasay’s argument that “public goods could be voluntarily financed [completely] by self-interested individuals in a stateless society?”
robc
Mar 15 2024 at 8:43am
GoFundMe is only a small part of charitable giving.
And dont forget things like MediShare, while not charity, but would count as something like a mutual aid society.
Monte
Mar 15 2024 at 11:54am
I understand, but total U.S. charitable giving in 2022 only came to ~$500 billion compared to the ~$1.2 trillion spent by the federal government on all welfare programs, a shortfall of ~$700 billion, and that’s my point. Philanthropy may be a complement, but not a cure, for what welfare advocates argue is the main justification for the state.
robc
Mar 15 2024 at 12:35pm
But if we cut taxes by 1.2T, how much more would go thru charity?
And how much more efficient is charitable spending compared to welfare? How much of that 1.2T does good instead of hurting?
And, just to be fair, same question for the 500B.
Monte
Mar 15 2024 at 1:15pm
We can assume more, but far less, I’m sure, than a dollar-for-dollar transfer.
By some accounts, more efficient. The larger question is how much more effective? I’m no expert, but just a cursory review of the literature I’ve found indicates there’s no decisive evidence for government support to crowd out private charitable contributions. In other words, in a complete absence of taxes, charity would still fall drastically short of total welfare needs.
Jose Pablo
Mar 16 2024 at 12:48pm
And, just to be fair, same question for the 500B.
Well, the only relevant question would be the efficiency of private donations “relatively” to the state sponsored welfare (the “absolute” efficiency will be impossible to measure).
Taking Monte figures for granted, you only need private donations to be 2.4 times more efficient than state sponsored welfare, for them to be doing the same “good”.
Judging from others endeavors (NASA compared to SpaceX, getting a new credit card vs renewing my driver license, etc… ), I guess that the real “relative efficiency ratio” is, very likely, much higher (my guess: north of 10).
In this we can follw Friedman, when you spend somebody else’s money on somebody else (and that’s the very definition of state sponsored welfare), you are not concerned about how much you spend, and you are not concerned about what you get.
So, you, would, very likely, need less than 120 b of additional private donations (a 24% increase) to match (and very likely exceed) the efficiency of state sponsored welfare. The hypothesis that 10% of the money saved in taxes would be dedicated to donations doesn’t seem too optimistic to me.
Afterall what is relevant is not the amount of resources devoted to solving (or in this case to not solving) a problem, but the results you get with the resources employed. A fact that is alien to most (all?) of our politicians. Which, at the end of the day, are dedicated, all day long, to spending somebody else’s money on themselves (on keeping their state sponsored employments).
Monte
Mar 17 2024 at 10:35am
Setting aside the question of relative efficiency, lets not forget that the vision of a philanthropic society separate from the state has been tried before:
This gradually gave way to the ever-expanding paternalistic government that we lament today. Pragmatically speaking, we can probably expect that private charity will continue to remain, at most, a complement to, rather than a substitute for, the welfare state.
Jose Pablo
Mar 17 2024 at 10:37pm
they fell far short of mitigating these evils.
The welfare state has also fallen far short of mitigating these evils. And that at a time of much bigger wealth!
The potential of “philanthropists and voluntary societies” nowadays is significantly higher than it was back in 1830-1860. Both regarding the amount of wealth at philanthropists’ disposal and regarding their ability to properly target their contributions (following “efficient”, as opposed to “political”, goals).
Time to give it another try. Not as a complement but as a substitute.
Monte
Mar 18 2024 at 12:13am
I would support that. There’s been much discussion lately about the federal government privatizing, and even subsidizing, many of the welfare agencies it currently oversees. As you pointed out, private charities tend to be more efficient at managing their resources than the federal government (I’m not certain that’s the case with state and local governments.). In either case, politicians will be reluctant to divest themselves of that responsibility until compelled to do so by their constituents.
The American people will ultimately have to be convinced of, and accept a greater responsibility for, providing for their own social safety net.
Jon Murphy
Mar 15 2024 at 1:37pm
You raise an interesting question. I wonder if there could be a crowding out effect. That is, people would donate more to GoFundMe (and other private charities) if the social safety net did not exist. Is government chasing out charity?
Monte
Mar 15 2024 at 3:59pm
From what I’ve been able to ascertain, there appears to be a partial crowding out effect, but not enough to support the notion that charitable donations alone are a suitable alternative for the social safety net.
Jim Glass
Mar 15 2024 at 3:19am
Where does he get this idea from? I never heard it in my life before coming to this blog.
There are other broadly respected takes on the subject, such as that the function of the state is to control violence. From the very beginning, when humans spontaneously organize states to escape Vengeance is Ours pre-state conditions of extraordinary violence via endless cycles of personal retribution (no justice system? do it yourself!) right up through modern times. Shall I link to all that data yet again? Nah (but here is Pinker’s Ted Talk on the subject).
The definitive econ text on this is, as Arnold Kling wrote in an Econlib Article, Nobelist Douglas North et al.’s “2009 master work, Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History“. Arnold explains the starting point is: “In order to have a stable order, a society must deal with the potential for organized violence.” For emphasis, he repeats that in a sidebar. No “stable order”, big problems all around! As he details…
Not a word about “public goods”. (Unless one wants to count eliminating the mass violence described by Diamond and Pinker as “public security”, which really doesn’t go along so well with “e.g., parks, streets”.) The liberal democratic capitalist states that have arisen in just the last 200 years are the alternative “open order” states — which equally operate to control violence, in a better way. Read the whole thing.
And where does *this* come from? For something to be “replaced” by something else it must exist in the first place. I can give examples down my arm of states that started as ‘tyrannies’ (ruled by kings, warlords, whoever) which eventually developed systems of contract and justice via iterative negotiations among parties striving for power. The historical processes being well documented in detail in V&SO. Where was the stateless society with top-level “contract and justice”?
Okay, and back at ya! I’ve seen De Jasay cited many times here and have followed the links. But I’ve never seen V&SO mentioned here by anyone, ever (except me). It’s 20 years more modern, by a Nobel winner and his team (their “master work”) and is *exactly* about what Libertarians obsess about. So zero interest here? A Google search of this web site found only one other reference, Kling’s initial Econlog review, in which he makes a long list of points. Starting with…
That was in 2009. OK, reading that I can imagine why nobody else here would want to bring up the subject in the 15 years since. But, hey, brave readers of this comment can be the first in a decade to read Arnold’s posts and maybe get a different idea about the nature of the state. Really brave readers might even read the book! Enjoy.
Pierre Lemieux
Mar 15 2024 at 12:20pm
Jim: These are all good questions, and they have been asked, in a rational way, ever since students of politics and society started reflecting on their subject. (Others asked them in a less rational way, like Sophocles in Antigone. 1 Samuel 8 is another example.) I jump over Plato and his philosopher-kings as well as over Aristotle. The intuition is that political (that is, coercive) authorities are necessary to produce indispensable goods or services that individuals or private groups cannot produce by themselves—what we today call “public goods.” But it was not until economists picked up the topic that these issues could be precisely formulated, ultimately in terms of “public goods.”
So what are these mysterious public goods” I jump over David Hume and Adam Smith to focus on Paul Samuelson (a Nobel Prize laureate), who gave a precise definition of public goods–the famous one, in terms of non-rivalry and non-excludability–in two seminal 1950s American Economic Review. The problem with this definition, as confirmed by welfare economists and many social-choice theorists, is the following: it implies that the basic values underlying the necessary public intervention are essentially arbitrary (from the mind of Plato’s philosopher-king).
Nobel economist James Buchanan then asked whether it is possible to imagine a state based on the unanimous consent of all individuals, the only non-arbitrary political value. Buchanan proposed a different definition of a public good: whatever, at the “constitutional stage,” is unanimously agreed should be produced collectively. There is no avoiding reading his The Limits of Liberty if one wants to study this issue. (His seminal 1962 book with Gordon Tullock, The Calculus of Consent is more technical and probably only accessible to economists; my “Liberty Classics” review gives the gist of their thesis.) You may be surprised, Jim, how much you agree with Buchanan.
Although Buchanan’s theory of the social contract is remarkable (he did not get a Nobel prize for nothing), it is not without problems. We had to wait, I think, until Anthony de Jasay’s 1985 book The State (see my “Liberty Classics” review) to find a serious challenge to a social contract to produce public goods and the very idea that the state is even necessary (besides being detrimental). Buchanan recognized that de Jasay’s challenge was serious. For a critique of de Jasay, in which you might be surprised to recognize pieces of your arguments, see my Regulation review of his Social Justice and the Indian Rope Trick.
I have only scratched the surface.
Mactoul
Mar 16 2024 at 4:10am
What is the purpose of the social contract theory and other similar projects that seek to justify or derive some political order from certain axioms — such as equal dignity of individuals and no coercion.
And what does success or failure of this project imply? Certainly it cannot imply that the political order is illegitimate if Jasay’s critique of Buchanan holds. For the political order doesn’t derive its legitimacy from academic theorizing. Rather the reverse should be true– theories are useful if they describe or help us understand something real and existing.
There is no necessity that we accept the axioms of Buchanan such as need for unanimous consent.
Pierre Lemieux
Mar 16 2024 at 11:48am
Mactoul: You are right, we could start with the assumption of the divine right of kings or of the majority or of Joe. But note that you have to carefully distinguish between positive and normative theories. For example, I might observe that, and try to explain why, most people believe in the divine right of 50%+1; but I might argue, normatively, that this theory is undefendable.
Jim Glass
Mar 16 2024 at 10:13pm
I know that a sometimes-claimed benefit of government is that it can provide public goods, the whole lighthouse thing. I’ve never heard that claimed to be “the main justification of the state.” But maybe it’s just me. My memory is failing, I grant.
Still, as I look at the news from Haiti after the departure of the very last elected politician (as I noted a little while ago), I read…
I don’t read: “With the collapse of the state, economists say Haiti now faces a shortage of public goods.”
It still looks to me like the “main justification” of the state is the suppression of mass violence thing.
Pierre Lemieux
Mar 17 2024 at 3:04pm
Jim: OK, I now understand what you meant. The question is, Why can’t security (internal and external) be supplied by private firms, just like hula-hoops, electricity, or car insurance (as Gustave de Molinari argued in a 1849 article)? The standard economic response (the response given by mainstream economic theory since Samuelson three-quarters of a century ago) is that security is a paradigmatic case of public good.
robc
Mar 15 2024 at 8:40am
theparklands.org
Unfortunately it was set up with some (but a minority) government funds, but it operates entirely privately.
Although the city’s input was fine. One of the 4 park sections was previously a city park that was donated to get it off the city’s maintenance budget.
Comments are closed.