An Unavoidable Theory of the State
By Pierre Lemieux
When the dust settles, Anthony de Jasay’s The State1 will probably be recognized as one of the great books of the 20th century. It may be the most serious and subversive challenge to state authority ever written. That this book is not banned must be proof that we are not living under real tyranny or at least under intelligent tyrants. Or perhaps the powers-that-be are confident that few people can understand the book, the more so as “snowflakes” become scared of intellectual challenges.
Anthony de Jasay is an economist born in Hungary, educated in Australia and England (Oxford), and living in France. He does not have a Ph.D. and is affiliated with no university, which makes him a rarity from the viewpoint of the very structured U.S. academic world. He pursued his academic interests after a career in finance, and has since written several important books and articles. He is one of today’s most original political thinkers.
He does not fit into any ready-made ideological category. He does not use the typical arguments of libertarian theorists, and is in fact often suspicious of them. He seems to eschew the concerns of classical liberals for legal forms and protections, except for spontaneously evolved conventions à la David Hume. He characterizes his philosophy as “capitalist,” by which he means based on a belief in private property, free markets, and freedom of contract. We might call him a conservative anarchist.
James Buchanan, the Nobel laureate economist and proponent of a constitutional-contractarian state, reviewed The State shortly after its publication. He acknowledged the challenge that de Jasay’s theory raised for his own contractarian vision. “Somehow,” Buchanan wrote, “those of us who retain a residual faith in some positive potential for organization [of the state] must meet the challenge posed by this book. We must, in some form or fashion, incorporate the descriptive features of the state, as depicted, into a coherent and nonromantic normative account of constructive reform.”2
What’s wrong with the state? The central argument of the book is that, in a society of non-identical individuals, preferences and interests will differ, so the state cannot simultaneously protect the interests of everybody equally; it must choose which interests to further, and which ones to ignore or crush. This fundamental idea seems so obvious, or at least so challenging, once clearly expressed it is surprising how it can have escaped so many analysts.
In practice, the state is who happens to run it, what de Jasay calls its tenants. One can view the tenants of the state as the inner circle of political and security rulers. The interests of these people are primarily what the state maximizes; but to stay in power, it must also promote the interests of those whose support it needs to stay in power.
The standard way to escape the dilemma—either the state has no justification or it only serves its own interests—lies in contractarian theory, from Thomas Hobbes to James Buchanan through John Locke, Jean-Jacques Rousseau, and John Rawls. In The State, de Jasay does not directly challenge Buchanan’s contractarianism (perhaps because it is the most defendable version?), but he proposes a quite devastating critique of today’s most popular “liberal” contractarian theorist, John Rawls. The general claim of contractarianism is that, through a unanimous social contract, individuals can force the state to serve their common interest in the provision of public goods such as national defense and perhaps a few others.
According to de Jasay, there is no dilemma to escape in the first place. The state is simply unnecessary. Nothing indicates that individuals in a state of nature (the standard name for original anarchy) would show any unanimous interest in creating the state. Voluntary cooperation can produce at least some level of public goods, and there is really no way to determine their “optimal” level. It is generally the state, not private interactions, that creates free riders. Moreover, individuals in the state of nature would have no way to know that they would prefer a state-governed society—anymore than today’s state-governed individuals can rationally consider the benefits of a state of nature that they don’t know and cannot experience.
And why would individuals trust the state to keep its word and respect their liberty and property once they have disarmed? History and theory (even the interstices of Marxist theory) suggest that the state is by nature an autonomous entity and not a simple instrument of its citizens.
In reality, the state buys the very consent upon which a social contract is supposed to rest, but it cannot be unanimous consent. Barring the existence of pure public goods and the confinement of the state in their production, a state intervention always hurts the interests of some subjects while promoting those of others. And “[w]hen the state cannot please everybody, it will choose whom it had better please,” as de Jasay puts it in immortal terms. So it will use its interventions to buy the consent of those whose support it needs to stay in power. The state is naturally an “adversary state.”
The democratic state does not solve the problem. It exacerbates it. State activities find a rationalization in utilitarianism and social justice. Assuming that utility is comparable among individuals and that Paul can gain more utility than is taken away from Peter, the state will be easily able to justify the redistributive effects of its interventions. When it steals from the rich to give to the non-rich, it will sell the result as an increase in social utility. Nothing in economics can prove this, but the non-rich are more numerous than the rich, so the state does choose whom it had better please.
The way the state balances costs and benefits among its subjects is totally arbitrary. Cost-benefit analysis is merely a way to rationalize what the state wants to do. It is a rare event, if it has ever happened, for the state to backtrack on a pet intervention after discovering from a cost-benefit analysis that its “social costs” exceed its “social benefits.” On the contrary, the state decides what to do and then undertakes a cost-benefit analysis that—hocus-pocus!—”proves” with some numbers that the benefits are indeed higher than the costs.
Again, de Jasay summarizes this finding in unforgettable terms (emphasis in original):
The long and short of it is that objective and procedurally defined interpersonal comparisons of utility… are merely a roundabout route all the way back to the irreducible arbitrariness to be exercised by authority… [T]he two statements “the state found that increasing group P’s utility and decreasing that of group R would result in a net increase of utility,” and “the state chose to favor group P over group R” are descriptions of the same reality.
These considerations would naturally lead us to the last chapter of The State, which relieves the suspense as to the ultimate fate of this institution in which democratic people have put all their hope. But before we go there, let’s flash back to the first chapter of the book, which draws a model of a fictional state that, contrary to the adversary state, would not take sides and would not have to buy the consent of its supporters. This minimal state, de Jasay calls the “capitalist state.”
The capitalist state would protect property and freedom of contract. It would realize the idea that “property ‘is,’ and is not a matter of ‘ought‘” (emphasis in original), or in other words that “finders are keepers.” Property does not need to be justified or redistributed—although any theft or perhaps nuisance would need to be corrected under satisfactory proof. The capitalist state would not be interested in governing, in the sense of intervening into its subjects’ affairs (even if its tenants may be interested in honors and other innocuous perks). It might be monarchical as, de Jasay suggests, Alexander Hamilton would have liked. It would not pursue the good of society, a meaningless concept. Its essential function would be to make sure that it is not taken over by another state intent on governing. Its essential function is to protect individuals against tyranny, foreign or domestic.
Whether a state of nature is stable in the sense of its capacity to resist outside invasion is an issue that The State leaves unresolved. Assuming a stable state of nature, it remains to be seen if the resulting order would be more capitalist in the modern sense than tribal in the way of primitive societies. This may be the chink in de Jasay’s armor. But if the capitalist state, which is close to the 19th-century ideal of classical liberalism, were possible, contrary to de Jasay’s doubts, it would provide a nice escape both from the risks of the state of nature and the grave danger of state we are now stuck with. At any rate, the book clearly identifies the theoretical alternatives.
According to de Jasay, the adversary state, especially the democratic state, is bound to grow non-stop. If there is an equilibrium point where it stops growing, history has yet to reveal it. Because of electoral competition, the state continuously needs to buy consent, lest the opposition, which bids up the price of support with its own promises, becomes the new tenant of the state. (It is not clear in my mind how the opposition can be both outside the state and part of it, how “[t]he actual tenant is the state” while the state continues even after a revolutionary tenant takes over.)
As the state grows to help those who were previously harmed, and as it helps and hinders the same individual in multiple ways, churning blurs who is a net gainer and who a net loser, the citizens become more and more dissatisfied, and demand both more state and less government: “Governing them helps make the governed ungovernable.”
Case in point: “As I write,” notes de Jasay, “the jury is still out on the Reagan administration and Mrs. Thatcher’s government. Both seem at the same time to be rolling and not rolling back the state” (emphasis in original).
The state “seeks to maximize its discretionary power,” but it must use up more and more of it just to satisfy its electoral clientele. Democratic competition between would-be tenants pushes the state towards an equilibrium of zero discretionary power (analogous to the firm reduced to normal profits by competition on the market). The state is reduced to an unhappy drudge for unsatisfied citizens demanding ever more. But note that only discretionary power is reduced to zero; total state power continues to grow.
No constitution can control this. To constrain the state, only private force could be successful: “Self-imposed limits on sovereign power can disarm mistrust, but provide no guarantee of liberty and property beyond those afforded by the balance between state and private force.” If individuals cannot keep their private institutions and their guns, the state will meet no resistance for it “has got all the guns.” An effective electoral resistance is impossible because the practical purpose of elections is to buy consent, which fuels the exercise of state power. Redistribution calls for more redistribution.
The last chapter of the book describes the most likely outcome: the fusion of economic and political power, that is, state capitalism. Being continuously asked to give and not to take away, to intervene and not to harm, using up all its discretionary power just to remain in power, the state will end up nationalizing the whole economy and abolishing electoral competition. The latter will be required by the former, for otherwise voters would vote themselves little work and high wages. In the brave new world of state capitalism, the former citizens will have become property of the state like slaves belonged to their masters on the plantations of yesteryear. The state will have become the plantation state.
Anthony de Jasay’s The State is a deep and tightly written book, with a gust of devastating humor here and there. One can read the book many times and understand something new every time. This powerful book is a must-read.
*Pierre Lemieux is an economist in the Department of Management Sciences at the Université du Québec en Outaouais. He is the author of A Primer on Free Trade: Answering Common Objections, published at the Mercatus Center. A follow-up book is forthcoming.
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